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‘Nigeria must renegotiate contracts with multinationals on oil exploration’

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Prof Akindoyeni

Prof. Akin Akindoyeni is the Chairman of Council, Institute of Oil and Gas Research and Hydrocarbon Studies. Akindoyeni, who served as Director General, Institute of Policy & Strategic Studies as well as Vice Chancellor, Adekunle Ajasin University believes that there are many opportunities Nigeria is missing in the extractive industry. In this interview with BRIDGET ONOCHIE, KINGSLEY JEREMIAH and SODIQ OMOLAOYE, the Professor provided leeway on how the industry can be repositioned and the roles the institute he chairs is out to play in the sector

There are indications that most of the agreements Nigeria signed with multinationals exploring oil in this country do not really favour the country. Do you think we need renegotiate the agreements?
It depends on what the original contract says. If the original contract says there will be a review at one time or the other, then it will be very easy to do. But if the agreement says to them and their successors perpetuated, which is what they are likely to have put in those agreements and Nigeria signed, then there is problem. That is part of the research the institute will be doing to look at the original contracts with these oil companies and what it says they can and cannot do. If you look at what they are doing now, they will give some money to the local chieftain and the people will continue to suffer. The fishery area would get spoilt. And the young men would become militants. This is because even the educational facilities in those areas have been completely destroyed.  If we cannot renegotiate the contracts, I wont feel guilty advocating that the federal government seize their facilities. Just like what Obasanjo did to BP and made it AP. An if they say they want compensation, they should say the amount they want, then we can now offset that compensation with the damage that have been done to our environment.

Do you think they will come back for the review of the contracts?
Yes, if they want to. We have other companies who are interested. The only thing is that western countries would they are not buying our petroleum products. We can get our refineries working and say there is no need for you to buy.


Are you in support of the search for oil in the Chad Basin?
What has been discovered as traces of petroleum in the Nigeria part of the Chad Basin is just a spill over of the basin. This is how it works. When the Basin is full, it spills over. The traces that were found were spillovers from the edge. But you will discover that the budget of Nigeria from the time of Shehu Shagari till now contains exploration of oil in the Chad Basin. If they were oil in commercial quantity in that region, we would have found oil all these years. Let me tell you the political background. If you look at the derivation policy, it identifies even where the oil has not been exploited. Our institute as I said earlier is going to depend on raw data and the analysis of that data to be able to make proposals to government.

You are looking at “Nigeria’s Petroleum Industry Governance Law & Global Investment Opening In The Sector” as focus for your 2018 lecture series. What informed this topic?
In the first place, with the amount of oil deposit in country, there has been certain level of monopoly in the industry and the government of the federal republic of Nigeria supports it. So, in organising this lecture, we want to be able to expose the areas in which investment in oil and gas and hydrocarbon is possible. Also, the institute will have a conference on project development in oil and gas in Nigeria very soon.

What do want to achieve with your upcoming programme?
We have so many battlefronts and the weapons we are going to use depend on research. In the near future most of us would begin to gather authentic data on exploitation of oil and gas and hydrocarbon in Nigeria. To identify where it will pay the country and the host communities, to help people invest in either the upstream or downstream. But not the way it is being done now. Let me give you example. We want to make recommendation to government on real facts and the areas of investments and what the conditions of investments could be for Nigerians and foreigners. We want a win win situation. But to be able to make such recommendations, we need data. We have conflicting data on activities in oil and gas in Nigeria.  What the America CIA will publish would be different from what United Nations will publish and also different from what World Bank will publish. And people rely on these institutions for the data they use. Our institute says it is wrong and unfair. On our upcoming programme, we have academics that are doing real research in these areas and you will hear some of them speak. What they are going to be telling you will be based on data. You will be listening to them and you will start to see the depth of the problems of the oil and gas and hydrocarbon in Nigeria. From there, we will know what has to be done for investment that will benefit this country and people of this country. I believe those who work at the alter most also eat.

Part of the plans the institute has is to provide accurate data in the extractive industry. How exactly do you want to achieve considering that country has not been able fund data collection?
The problem of data gathering in Nigeria is the policy behind budgetary. The Federal government would tell you to return allocations not spent in a budgetary year back to the treasury. So an organisation like Department of Petroleum Resources (DPR) if they wanted X amount of money for data collection and they have not finish spending that at the end of the year, the money must go back to the treasury. And they may never get any more money on that project, so the research will be frustrated. Many and many projects in the country have been frustrated, either intellectual or physical.

The institute is privately sector owned. It is like an NGO but a research institute. We have people with interest in research within the institute. There are some who gave us donations. People who feel there is need to get the fact out. Not what the politicians tell us but what the realities are. These people have the right to be bitter about the way things are. Then they have the interest of getting the facts out.

What is your view on Ogoni clean up?
There was an agreement between the government and the oil companies to clean up any environment they mess up. But it is so unfortunate that nobody is monitoring them and making noise when it is not being done. We don’t have sufficient data to be able to accuse them anymore. When people who have offended are confronted with data of their wrongdoing, there is no option than to plead guilty and the whole world will know how Nigerian politicians and multinationals have conspired to damage Nigeria.

Do you see the host community bill as the right solution to the issues in oil producing region?
If it takes care of not only the host communities, but the oil companies and the federal republic of Nigeria and as well as the host states, it will give us some of what we want now. The attitude of cleaning up of what has been damaged in the environment is not taking us anywhere. Instead, they will go to the paramount ruler of the area, give him a new car, give a couple of scholarship to some of the children and that is the end. According to the vice president, the cleaning up is way behind schedule. And the people who are saying something about the clean up are not those who have authority to speak on the project but those who are not happy with the way the project is done. Yes, the host community bill will help but what I have discovered about Nigeria is that when you have a law that is being proposed and debated, there would be those who are against it. Mostly they are people who will find that they have nothing to gain from it. However, if they are being given some kind of public relations, they will agree but they will have conditions. Do you know that before the 13 per cent derivation revenue was agreed upon, there was heavy opposition from the northern states? During the national conference when someone proposed 20 per cent as derivation revenue, it was also heavily opposed. It was opposed by states that have no oil except Ekiti, Kwara, Benue, and Enugu. Virtually, all the northern states opposed it. But go to Texas. If oil is found on somebody’s land, there is a percentage that goes to that person or that family on what comes out of that oil, not in Nigeria.


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