Bayelsa Oil Company and Matters Arising

Since the nullification of the election of Chief Timipre Sylva as Governor of Bayelsa state by Appeal Court sitting in Port Harcourt the River State capital, mud slinging and campaign of calumny of an unprecedented dimensions have become the order of the day and regular features in the state politics. This campaign of the misrepresentation of facts of what has happened and what is happening in the oil rich state, has, in the context of politics of blackmail become a threat to the state’s political stability which by extension means the political stability and the growth and survival of democracy in Nigeria – considering the volatile nature of the Niger Delta region. This writer has therefore decided to draw the attention of Nigerians to this campaign with a short background brief, to start bringing out the distortions of the truth about Bayelsa Oil Company Limited (BOCL) especially regarding the development of OML 46 (Atala Marginal Fields) which the campaign of slander seeks to disseminate.

This piece was necessitated by a grand and orchestrated negative media crusade making the rounds in the media on a memorandum written by the state Honourable Commissioner in charge of Finance and Budget, requesting the former governor to release the sum $ 50,000,000.00 (fifty million USD) for the development of the Atala Marginal Fields. The paid advertorial seeks among other things to draw the attention of the anti corruption agencies and indeed the general public to what the petitioner refer to as “how Timi Sylva ran his show as governor”. The diatribe further alleged among other things that the huge sum of $40,000,000.00 that was eventually approved by the former governor was diverted to a dormant account; that the Board of Directors of the state Company was not properly constituted; that due process and the rule of law were not adhered to as well as the plundering of the state funds among others. Before addressing these misinformed standpoints, it is necessary to look into the raison d’etre of BOCL.

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The company was incorporated in the year 2000 by the then administration of Chief DSP Alamieyeseigha with a corporate goal of establishing and nurturing world class oil and Gas Company and a focal mission of exploiting hydrocarbons safely and efficiently by deploying the best available technology with the view of generating superior returns thereby ensuring added value for all Bayelsans.

Following the result of the 2001/2002 marginal bidding exercise, the company was awarded the Atala Marginal Fields that was hitherto being held by joint venture operation between NNPC, SPDC, ELF Petroleum Nigeria Limited and Nigeria Agip Oil Company Limited (the OML 46 joint venture parties). Oil industry watchers felt elated by the remarkable foresight of Bayelsa to engage actively in the oil and gas sector of the economy following the fact that the Niger Delta basin is Africa’s largest and most prolific oil producing basin. Today, in the oil and gas map worldwide, the Niger Delta is one of the largest delta systems of tertiary age and significantly covers an expansive area greater than 75,000 km2.

Bayelsa alone is today believed to contribute a whooping 40% of all oil and gas produced in Nigeria. The Port City of Twon Brass, in Brass local government where large proportion of the oil export cargo and crude tonnage are being shipped daily with corresponding discoveries in other local government areas are good examples of the rich endowments of this state that has lately become a subject of political intrigues and machinations. Recently, the discovery of over 400 million barrels of oil and an estimated half a trillion cubic feet of gas by SPDC in Gbarain in Yenagoa local government has been described as one of the greatest of all finds by the multinational oil giant in the last three decades.

The anti Sylva stance is contrived and grossly dishonest because these are the same people, who seek to discredit the former governor despite his modest effort at bringing sanity and peace to the state within few months. Or how else can one reconcile the fact that the state’s attempt to ensuring the maximisation of all windows of opportunities as provided by joint ventures, PSCs or marginal oil fields in the oil and gas industry is being brought into disrepute. These opportunities were necessitated by Nigerian Department of Petroleum Resources (DPR) policy, having seen that the oil fields remained unproductive or underdeveloped for a period of over ten 10 years. As a beneficiary of these government gestures, BOCL has the sole responsibility for undertaking the exploration, prospecting, winning, and carrying away petroleum in respect of the Atala fields. Therefore, this company cannot be a dormant one. Building attractive portfolio of exploration, development and production by the company needs a thorough, experienced and committed effort which the former administration has shown.

The essential details above have been painstakingly captured to dispel affront on Bayelsans that a government owned company engaged in this magnitude of transaction hold a dormant account. What makes a company dormant when all its staffers and liabilities are being taken care of by the Ministry of Energy? These misconceived theories and assertions portend grave dangers for a state blazing the trail in public private partnership (PPP) initiatives conceived to uplift the economic standard and the revenue profile of the young state.

If the writer and his faceless sponsors consider the Board of Directors of the company to be Cameroonians thereby invalidating the genuineness of the company being owned by Bayelsa state, he should seek more clarification from CAC on such issues. Other areas where the petitioners felt strongly about were the issues of non budgetary provision and approval from the state house of assembly. It is commonsensical that when there is no cash flow to finance a project, the government does not need to appropriate such. The rational thinking says government can look inward as far as it does not affect the net cash outflow from the state. Therefore it is strictly government business to use what it has (securities like the Paris club funds) to get what it wants (the oceanic bank facility) as indicated in clear terms by the Honourable commissioner’s memo.

Securing funds to finance such noble business venture is very fundamental to the quest for an indigenous company to compete favourably with its foreign counterparts considering the huge business portfolio of its technical partners like Hardy Oil and Gas Plc. This would also avert revocation of the licence in question. In view of the volatility of the operational locations of Atala fields, the mangrove swamp in the Dodo River, a coastal area in Ezetu – Penington in Southern Ijaw and Azegbene in Ekeremor local governments, the local oil company would bring a different thinking to hot-tempered communities as they begin to see themselves as stakeholders.

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Essentially, BOCL has not done anything wrong neither has the former governor. Pursuant to the Petroleum Amendment Act (No. 23) of 1996 which awarded Atala Marginal Fields to BOCL on a 100% participatory interest, the former governor has acted within his constitutional powers when he approved the said sum in form of bank guarantee to develop what in his view, would bring enormous revenue to the state to meet its developmental challenges.

In my humble opinion, the misdirected campaign is an ill wind that blows no good; therefore this arrant garbage should be stopped forthwith to enable good spirited individuals to channel the enormous resources of the state to good use.

 

By Maxwell James

maxodaudu@yahoo.com

Kpansia-Epie

Yenagoa

0805 432 6040