Nigeria
Nigerian federal govt wins control of oil resources

afrol News, 6 April - The Nigerian Supreme Court yesterday decided on a far-reaching resource conflict between the federal government and the Nigerian oil-producing coastal states. The areas outside the low-water mark of the coastal states are federal property, meaning that the states do not have the right to a share of the revenue of oil production there.

The federal government February last year dragged 36 Nigerian states to court, seeking a determination of the seaward limits of littoral states to enable it determine the revenue accruing to them from the federation account. The court, "in a landmark judgement," as the Lagos-based 'P.M. News' called it, "ruled that it is only the Federal Government that has control over the mineral resources of the federation."

The most important consequence the ruling and the court's definition of federal territory is its implication to the revenue sharing model. While the revenues from natural resources produced in one state are shared between that state and federal government, especially the definition of the seaward limits of littoral states has practical importance.

Following years of conflict - sometimes even armed conflict - the federal government two years ago allotted a share of the oil revenues to the nine oil producing states, compensating for the environmental and social inconveniences. In April 2000, President Obasanjo signed into law a new revenue sharing formula with these states by which the latter receive 13 percent of oil revenues versus the previously allotted 3 percent. 

Angered by years of perceived neglect by the Nigerian government and multinational oil companies, communities in Nigeria's oil-rich Niger Delta have periodically erupted in protest. Nigeria gets about 90 percent of its petroleum from the Niger Delta area. In spite of the enormous resources it generates for the national coffers, the Niger Delta is perhaps the least-developed area of the country. The Delta therefore lacks good roads, electricity, potable water and good schools. The environment has further been seriously damaged by oil production, hurting local food production. The revenue sharing model of year 2000 has brought far more resources to these poor southern states.

In February 2001 however, the Obasanjo government asked Nigeria's Supreme Court to intervene in its argument with the 36 regional state governments over control of the country's offshore oil and gas resources. While the Delta resources have been used for decades and are diminishing, the great investments in Nigeria's future oil drilling are believed to be offshore.

While yesterday's Supreme Court ruling has established the federal ownership over these offshore resources, observers still fear this might "infuriate" (BBC) southern states and further contribute to the regional divisions threatening to break up the Nigerian federation.

'P.M. News', based in Lagos, outside the oil-producing zone, however welcomed the courts' decision, which effectively had "put paid to the agitation for resource control by the southern states."

Sources: Based on Nigerian govt., press reports and afrol archives

 

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