CRUDE OIL DISCOVERY IN LAGOS…MATTERS ARISING

CRUDE OIL DISCOVERY  IN LAGOS…MATTERS ARISING

With the flag-off by the Vice President, Professor Yemi Osinbajo of the cleanup of Ogoni due to decades of damage done to their environment as a result of oil spill, inhabitants of oil producing areas have a glimmer of hope of getting their lands back. The Niger Delta is reported to be the most devastated region on the planet. The people have lost their predominantly fishing and farming livelihood; they have no drinking water and are afflicted by various health challenges.

Earlier in May, Lagos State Governor, Akinwunmi Ambode, declared that Lagos had officially joined the League of Oil Producing States in Nigeria following the discovery of crude oil by Yinka Folawiyo Petroleum Company Limited in Badagry. The discovery had cost the company $400 million and 25 years of hard work. Lagos, with this finding, would be entitled to the 13 percent derivation that is due to oil producing states, based on section 162 Sub-Section 2 of the Nigeria Constitution. This breakthrough is expected to generate more than N30 billion worth of internal revenue every month for the state. The oil well has the capacity to produce at least 12,000 barrels per day, with a possibility to increase to 25,000 to 50,000 barrels per day in the nearest future. This would supplement Lekki Refinery which is expected to produce about 500,000 metric tons of Liquefied Petroleum Gas per annum when it starts production in 2018.

Lagos is home to Nigeria’s most critical commercial activities with fully developed banking, telecoms, manufacturing, maritime, insurance and other strategic sectors. The country’s biggest air and sea ports are situated in the coastal city, as well as the head offices of the biggest companies. These, complimented by a rapidly growing population and consumer market, have propelled the growth of its economy. Lagos alone has a larger economy than many African countries. It contributes about $80.61 billion (35.6 percent) of Nigeria’s GDP. Lagos is also the highest contributor to the Non-Oil GDP (with $129.4 billion, representing about 62.3 percent).

These mouthwatering figures may however be tempered by the pictures of the fragile ecosystem oil exploration had turned the Niger Delta and its people into. Would the picturesque, serene and tourist destination, Badagry, require another cleanup issue by the United Nations’ Environmental Programme? It may be argued that Lagos is a developed state and would better manage the environment from abuse but one should consider that rural and remote areas even in Lagos state are decades behind their urban peers. They rank low on all human development indices making one wonder whether they are in a highbrow state. They still lack the state of the art hospitals or schools that past and present administrators have commissioned in the city centres. So what happens to the previously unknown Aje when there is an oil spill and its quiet residents lose their subsistent aquatic occupations?

Next step for the Lagos government is to dialogue with the leaders of this and neighbouring communities on the urgent delivery of basic infrastructure in the form of model primary and secondary schools, primary healthcare facilities, developing the tourist and recreation spots, and provision of clean water supply. Apart from being proactive and responsible, it makes the inhabitants part of the value chain and not one of exploitation. This move will reduce agitations, if any, in the future. There could also be an arrangement where some fraction of the shares of the oil well goes to the community.

Despite Lagos’ economic glory, the rate of youth unemployment is on the high side. Governors after governors are yet to find a permanent solution to the area boys/agbero menace in the state. These semiliterate and unemployable youths are ready tools of violence tomorrow and could be the next militants bombing the very oil well that is bringing smiles today asking for their share of the wealth extracted from their soil.

Well mapped out road and transportation network leading to Lagos West senatorial district, where this crude oil was discovered, should be developed. This is important so that those who manage the state can deliberately encourage industries and businesses to move to that part of town. Besides the indirect and direct employment in the short and long term that this provides, the iconic architectural and concrete presence of multinationals dotted around the ancient settlement gives the Badagry area a modern commerce story and not that of its slave trade past.

Discovery of oil in this age of alternatives to fossil fuel should not call for popping champagne. Although, humanity may not completely do without petroleum products, but with advancement of battery powered vehicles, this would greatly reduce the price of crude in the international market. So as Lagos celebrates this economic feat, earnest plans should be done for a post-crude oil economy. Tourism for one would thrive well in Badagry.

Knowing that it is now a major player in the petroleum industry, the government of Lagos state should use its political alignment with the centre to press on the federal executive to present again the Petroleum Industry Bill. This bill has suffered many controversial setbacks in previous legislative sessions. Though watered down from its original version, the bill as it is now is a win-win for all in the oil business and host communities in a deregulated oil industry. So the government of Lagos can then compel its senators and representatives in the National Assembly to do the necessary on the passage of the bill. This is should be done so that the state gets the best from this oil discovery in Aje.

Finally, proceeds from crude oil should not distract Lagos from its enviable internally generated revenue system. Lagos has perfected the art of generating revenue internally independent of monthly allocations from Abuja. Any attempt to make the discovery of this large natural gas reserve in the state as its main source of revenue and sustenance, would spell doom and lead to a decline in its industrial base as taught us by history. Lagos should put at it at the back of their minds that its greatest resource is not beneath the soil but in its people.