By Fredrick Okafor
From 1937 and 1938 when Shell D’Arcy Petroleum Development Company was granted an Oil Exploration License (OEL) covering a vast area of 357,000 square miles to 1956 when Shell BP struck oil in commercial quantities in Oloibiri in the former Eastern Region (now Bayelsa State), to 1958 when Nigeria’s first oil shipment headed to Europe, and down to the present day, oil and gas has played a defining role in the political and economic life of Nigeria. It has not only been the mainstay of the Nigerian economy, many are of the opinion that oil and gas deposits are the real gum still holding Nigeria together.
Oil has also been at the centre of the strategic interest of other nations in Nigeria. For instance, many believe that the Nigeria-Biafra civil war, including the sides taken and parts acted by both local and foreign interests/powers, was largely a war over Nigeria’s huge oil deposits in the deduct Eastern region, which was just developing at the time.
In view of these strategic political cum economic imports, to be designated an oil-producing state comes with a load of advantages, primarily, the 13 per cent payable to oil-producing states, courtesy of the derivation principle. Only recently, the Presidency disclosed that nine oil-producing states received N625.43bn in 13 per cent oil derivation, subsidy, and SURE-P refunds from the Federation Account in just two years, while the sum of N1.1 trillion was outstanding. On her part, Minister of Finance, Zainab Ahmed, recently revealed that the President Muhammadu Buhari’s administration had paid a total of N1.9 trillion in derivation funds to nine oil-producing states.
Until very recently, the traditional oil producing states were Akwa Ibom, Rivers, Delta, Bayelsa, Ondo, Edo, Imo and Abia states. They were later joined by Lagos, following the discovery of oil in commercial quantities in 2016.
Ordinarily, Enugu State should have naturally joined this league along with its generation of oil-producing states, namely, Kogi and Anambra, courtesy of OPL 915. While Oil Prospecting License (OPL) 916, which consists mostly of gas deposits is situated mostly in Anambra, OPL 915, which boasts of massive oil deposit is located mostly in Kogi and Enugu State, with a small portion of it located in Anambra State.
However, it is recalled that whereas it had since been discovered that Igga and Ojo communities in Uzo-Uwani LGA of Enugu State have huge oil deposits, likewise some Kogi communities, former President Goodluck Jonathan stirred the hornet’s nest way back in 2012 while commissioning the Orient Petroleum Resources Plc’s oil drilling activities at Aguleri-Ogu in Anambra State. He named only Anambra State as oil producing state, leaving out Enugu and Kogi in the same Anambra River Basin. Not only did the resulting crisis engulf the boundary communities of Anambra, Enugu and Kogi, it also temporarily halted Orient Petroleum’s oil exploitation activities.
Unfortunately, whereas the Revenue Mobilisation, Allocation and Fiscal Commission (FMAFC) finally admitted Anambra and Kogi States into the league of oil-producing states during its 139th plenary session on 27th July 2021 and officially communicated the same to former Governor Willy Obiano and Governor Yahaya Bello vide 24th August 2021 letters, the same was not extended to Enugu State. In fact, Governor Ifeanyi Ugwuanyi had to practically and severally plead with the Federal Government to accord Enugu what is rightly theirs.
One of those occasions was when the government received the Commissioners and top management team of the RMAFC, who were on a courtesy visit at the Government House, Enugu. Ugwuanyi, represented by his Deputy, Hon. Mrs. Cecilia Ezeilo, reminded the Commission that while “years of oil exploitation in the Enugu/Anambra/Kogi states joint border corridor have resulted in the successful exploitation of crude oil in the area, which includes a large part of Enugu State’s territory… Enugu is about the only state in Nigeria, which produces crude oil in commercial quantities without been formally accorded the status of an oil-producing state”.
Likewise, legislative interventions by National Assembly Members of Enugu State extraction through motion, etc., had equally met the brickwall.
However, in all these, Governor Ugwuanyi did not relent, neither did he allow the state, particularly the oil-producing areas to descend into anarchy as sometimes witnessed in some other oil-producing communities. He instead, continued to push his quiet and diplomatic shuttles and pressures to ensure that he bequeaths to the state, a legacy of oil-producing status.
It was therefore a great day for the people of Enugu when it was recently announced that the FG, acting through the RMAFC, had finally done the needful and justice to Enugu cause by listing the state as an oil-producing federating unit.
This is no doubt one of the biggest news coming the way of Enugu since its creation. Although, oil is gradually diminishing in global import, especially in the face of rising call for alternatives to fossil fuel such as renewable sources, the truth is that in the midst of energy poverty, oil and gas will play a huge role in serving the global energy needs for a long time to come.
Even domestically, Nigeria is far from meeting its energy needs. Although, the nation’s full installed grid capacity is put at 12,000 megawatts, weak and broken electricity infrastructures have perennially limited power delivery to between 3,000 to 4,000. Consequently, Nigerians and industries have heavily relied on off grid power where diesel provides more than 25,000 megawatts of power, off grid.
Meanwhile, like every other state in Nigeria, Enugu State is also highly endowed in mineral resources. Besides oil deposits, the state, according to a study by the Raw Materials Research and Development Council (RMRDC) Abuja, is also rich in lateritic clay, kaolinitic clay, ball clay, iron-ore, glass sand, gypsum, coal, silica sand, ceramic clay, among others.
It is therefore not surprising that the governorship candidate of the People’s Democratic Party (PDP) in Enugu State, Dr. Peter Mbah, who has proven to be strong on economy and who is also coming from the private sector, has a clear vision on how to work with the FG and the private sector to maximise these natural endowments if elected. He factored Enugu’s rich oil and mineral deposits in his manifesto and set an agenda for himself to work with the private sector to conduct an aerial spatial mapping to know the exact size and varieties of natural resources in the state, and bring investors to mine and to export the state’s mineral resources to boost the state’s GDP.
Fortuitously, the burden of getting Enugu listed as an oil producing state within one year in office as stated in his manifesto, has been lifted off his shoulders by recent admission of the state into this exclusive club through the strident efforts of the current state administration.
All taken, it has been a long, but a worthwhile walk to the official status of an oil-producing state for Enugu. Its admission into this league is not only a huge leap for the state, but also sets the stage for the next administration to build on. It is equally historic and will go down as yet another feather to the cap of the Governor Ugwuanyi’s administration.
•Okafor writes from Enugu