https://www.scrollreport.com/2022/11/now-that-the-north-has-found-oil/
With billions of dollars in the hands of the Nigerian government, we went on a spending spree, increasing civil servants’ salaries and benefits and backdating them (“Udoji Award”) and paying for laundry for undergraduates. The tsunami of dollars kept the naira at par with the dollar. That meant it was cheaper to import a bottle of water than to make it at home.
We took to import binging and neglected the productive bases of the economy, only to start whinging decades later that the naira was losing value. We went on a spree of creating subsidies, thinking petrodollars would rain eternally. We became a den of rent-seekers feeding fat on oil. We still consider it our golden era.
What oil wealth did to us was to make the government awash with petrodollars while Nigeria and Nigerians were not better off commensurately. Government became the biggest centre of patronage. To be in government was an invitation to become rich with minimal work.
Government started creating more ministries, departments and agencies where access to cash is unlimited and the levers of accountability are terribly low. Getting government appointments became more profitable than running businesses. Government contracts could give as much as 500 percent returns. That is what oil windfalls can do to a society without visionary and accountable leadership.
We built infrastructure, to be sure, so I am not suggesting the entire windfall was wasted on subsidies and whiskies. But nearly 50 years later, we still have thousands of kilometres of unpaved roads and thousands of communities without access to potable water and electricity, which should have been part of our priorities.
If we are honest, petrodollar is easy money and the temptation to spend it anyhow is always there — except there is a strong public accountability system. Though Arab countries have absolute monarchs, they are visionary and place priority on infrastructural development. Norway had a well-established public accountability structure before the oil boom.
Despite all trouble oil has brought upon us, our reserves are about to get bigger with the flag-off of drilling in the Kolmani River field by President Muhammadu Buhari on Tuesday. In 2005, the New Nigeria Development Company (NNDC) owned by the 19 northern states had won OPLs for Blocks 809 and 810 in the bid round organised by President Olusegun Obasanjo.
The previous year, Obasanjo had, as part of addressing issues in the Niger Delta, preferentially awarded marginal fields to Akwa Ibom (Universal Oil & Gas), Bayelsa (Bayelsa Oil & Gas), Delta (Midwestern Oil & Gas), and Ondo (Owena Oil & Gas). Imo and Rivers partnered Walter Smith and Sahara Energy respectively.
The Kolmani field in the Upper Benue Trough of the Gongola Basin is said to hold reserves of about one billion barrels. The bigger picture, however, is that if you can find oil around the Kolmani River, then there are more prospects for more discoveries in the Benue Trough. There are also prospects for further discoveries in the frontier basins of Anambra, Bida, Chad, Dahomey and Sokoto.
There are projections by the Nigerian National Petroleum Company Ltd (NNPC) that there may be up to 19 billion barrels in the bellies of those basins. For context, Nigeria currently has about 37 billion barrels in proven reserves, mostly in the Niger Delta. Nigeria can only get bigger as an oil producer.
How did Nigerians react to the Kolmani news? Up north, it was celebration galore. I can understand. At least, when production finally begins, northerners will no longer be described by southerners as “parasites on our oil”. No matter how a northerner tries to wave this tag away, it hurts deeply. Nobody likes to be called a parasite.
Kolmani excited the federal government as well. More oil means more revenue and more money to share. The trending sentiment across the developed world is the need to reduce the consumption of fossil fuels, such as petrol, in order to save the planet. There are projections that demand for oil will fall as electronic vehicles and alternative, sustainable energy sources gain ground.
But demand for crude oil has refused to drop. The global population just hit eight billion, with more people living in low-income and poor countries. They tend to lag behind in alternative energy. There is, therefore, going to be a market for oil for much longer. Nigeria can hope to harvest more petrodollars.
While the mood up north and in the Presidential Villa was bright, I could sense some moodiness down south, at least judging by comments on social media. When you have made a career of disparaging the northerners and slighting them with campaigns for “resource control” and “restructuring” which is basically because of the oil, it is inevitable that your mood would be soured when your favourite punchbag is about to be “free”.
It is like a husband whose wife depends on for everything, including the money to buy toothpaste. The day she begins to gain some degree of financial independence, the husband’s weapon of negotiation and control will begin to lose potency.
Some southerners are in pains. All sorts of theories are trending on social media. One fellow said no oil was found in Kolmani, that it is just a gimmick to start giving “the north” 13 percent derivation from the resources of the Niger Delta. Another said secret pipelines have been laid from the Niger Delta to the north and the oil production attributed to Kolmani is actually stolen from the south.
The detail that has been lost in the conspiracy theories, though, is that it will still take years for oil production to start in Kolmani, so the issue of derivation payment does not arise yet. Nonetheless, I very much understand that these theories are driven by “sifia” pains of losing bragging rights.
What is my take on the Kolmani drilling? I have my worries and fears. I recall the words of Alfonzo: “Ten years from now, twenty years from now, you will see: oil will bring us ruin.” If we are going to experience a different outcome, we must begin to plan and act differently.
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