The Honourable Commissioner, Ministry of Information,
Permanent Secretary and Directors
Gentlemen of the Press,
Ladies and Gentlemen
It is my honour and pleasure to welcome you to this press briefing.
As you may be aware, I have the privilege to be appointed Honourable Commissioner, Ministry of Oil and Gas by His Excellency, Senator (Dr) IfeanyiOkowa, the Executive Governor of Delta State on September 22nd, 2015. By coincidence, I also happened to have headed this same Ministry as a commissioner in the past administration of Dr Emmanuel Uduaghan from August 2011 till the end of the administration on May 29th, 2015. Suffice to say, therefore, that I have a full grasp of the work plans, budgetary provision and performance within the same period.
This year 2016 and indeed, since 2015, has been very challenging with the near collapse of the oil price which happens to be the main stay of the Nigerian economy and Delta State in particular. This situation has beenfurther compounded with the resurgence of militancy in the lower Niger Delta, particularly in the Swamps and creeks of Delta State which have depleted oil production in the State. The effect of these activities is that the production quota of Delta State has been negatively affected to the extent that:
i. revenue accruing to the State from Oil production has dropped to its lowest in over 10years. This also affects internally generated revenues in form of PAYE and other taxes that are derivable from the oil and gas investments
ii. Investors are moving out of the State in droves as a result of youths’ restiveness and their absence, coupled with a lack of job opportunities for the youths have further compounded security issues within our communities. Companies like Globestar Engineering in Igbudu area and Nigerian Westminster Dredging in Iyara area of Warri South LGA, Bredero-Price in Enerhen, Uvwie LGA have closed down their offices in Delta State between 2015 and 2016. This is just to mention a few.
iii. New investors are reluctant to bring their hard-earned resources to invest in an environment that holds so much animosity that does not guarantee a sustainable investment and which also threatens their return on investment.
The good news however, is that Delta State is still host to a number of Oil and Gas producing companies as well as other allied and ancillary business entities. Thus, the Ministry of Oil and Gas, with the support of His Excellency, the Governor and the good people of Delta Stateis poised to change this trend and:
i. raise the internally generated revenue of the State and move Delta State forward in the areas of “Strategic wealth Creation and provision of jobs for all Deltans”
ii. galvanise and encourage indigenous participation in the oil and gas businesses.
iii. increase the production capabilities of the oil companies in the state through positive engagement programs that can significantly reduce hostilities in the oil and gas producing communities.
What the Ministry has set out to do?
There’s an adage in our place that says “it’s in the house that you beautify yourself before going out” in other words, Charity, they say begins at home. And so, we decided to start first by putting our house in order. And towards this direction, On January 13th, 2016 we gathered Deltans together at PTI Conference Centre in a ‘One Day’ Stakeholders Conference where the following issues were discussed and perused.
i. Pipeline Vandalisation, Crude Oil Theft and its negative impact on the environment and economy of Delta State.
ii. Curbing Kidnapping, Community Unrests and illegal stoppage of Oil and Gas operations in Delta State through increased Security and peace building platforms.
The outcome of that conference was very insightful and the recommendations were far reaching. I am glad to inform you that the recommendations of the conference has formed part of our working plans.
We’ve also had to convene several other engagement sessions with different community and interest groups across the State with an aim to persuade our people to eschew violence and become more accommodating to the oil and gas companies in our domain. This we believe will help us drive a more inclusive work program that will engender peace and prosperity for all Deltans.
Pursuant to the present administration’s SMART Agenda and the mandate to maintain peace and ensure harmony among stakeholders in the oil and gas sector, the Ministry also holds mediation meetings in different parts of the State to resolve disputes between oil and gas companies and their host communities or intra/inter communal disputes over ownership and benefits of oil and gas resources. The primary objective of this effort is to create a peaceful atmosphere for sustained production and attract more investments to the oil and gas industry in the State.
In this regard, the Ministry has been able to resolve most of the lingering and nagging issues that were hampering smooth operations of oil and gas companies in the State vis-à-vis their host communities. Some of the issues resolved so far include:
• Midwestern Oil and Gas Company Limited versus their host community, Umusadeg-Ogbe.
• Pillar Oil Limited and its host communities – Umuseti, Beneku, Umu-Iwere, Igbuku and Umusadege-Ogbe communities
• Pan Ocean Oil Corporation and Owa-Aladima, e.t.c.
In our continuous effort to ensure that dividends of Oil exploration within our domain trickles down to the host communities, we are glad to inform you that the efforts have yielded some major results to wit:
i. Heritage oil limited, the new operator of the OML 30 that was previously operated by NPDC have agreed to locate their operational headquarters within the State. This is a major achievement considering the fact that proceeds from the acreage which traverses 111 communities across 10 LGA has always gone to Edo State where NPDC have their headquarters.
ii. We also have understanding with the Nigerian Content Development and Monitoring Board (NCDMB) to site an industrial cluster within Koko, the headquarters of Warri North Local Government Area. This effort, expectedly will trigger an accelerated development of that environment as local skills necessary in the oil and gas sector will be developed and Deltans will have a higher opportunity to deepen their engagement in the industry.
Our Plans for 2017
o In line with the recommendations of the several stakeholders engagement across the State, the Ministry plans to deepen the engagements at the community grassroot levels. We believe that the people who engage in pipeline vandalism and oil facilities hostilities are very few and they are mostly ignorant of the effects of their activities on the economy of the State and the environment where they reside and so, the Ministry will continue to dialogue with the host communities at the grassroots levels to ensure a more conducive atmosphere for the investors to thrive. The Ministry also intends to create enabling environment for investment in gas production and its value chain to stimulate industrialization and employment by constantly engaging the communities via town hall meeting, sensitization, seminar/summit, workshops etc to drive home the need for peace and help stabilize the communities to be receptive to investors – Meaningful peace building aimed at political and social harmony
o In line with the Delta State Government’s strategic plans and also in consonance with the recommendation of the report of the Delta State Economic and Investment Summit of 25th and 26th of August, 2016. The Ministry intends to build strategic gas infrastructure through a public–private partnership arrangement to harness the huge economic opportunities it holds for industrialization. Towards this goal, the State is already working with some companies like: (1) – South African based Virtual Gas Network/LNG Technologies
(2) Partnership to develop Gas-to-household fuels with OandO Plc and Masters Energy
(3) Gas reticulation plans with Masters Energy
(4) Methanol. Cassava flour and industrial starch project (METHCAS) with Transcontinental Energy Dev Co Ltd.
o Encourage community participation in oil and gas businesses and its value chain, the Ministry plans to create a platform through which host communities can be encouraged to establish Modular refineries and small gas investments. The Okpanam Coal to power project is also considered in this regard as it holds the potential for industrial development clusters within the communities of Delta State – Strategic wealth creation project aimed at provision of jobs for all Deltans / Meaningful peace building platforms.
It is a well known fact that the oil and gas business is still on the exclusive legislative list of the Federal Government and as such, what State Government can do with regards to the oil and gas business is limited. However, in line with the mandate of this Ministry, we would continue to drive policies and strategies that would:
i. encourage our people to be a part of the oil and gas business and its value chain by developing our capacity to engage in small ancillary businesses within the oil and gas chain. This will help to engender a higher sense of ownership at the community levels and guarantee Deltans a Strategic wealth creation aimed at provision of jobs for all Deltans.
ii. Explore the provisions of the Nigerian Content Act an ensure that oil and gas companies are held accountable to a strict compliance with the possibilities and promises it hold for oil and gas host communities and Deltans at large.
On this note, I wish to thank all and sundry for your attention at this press briefing. Gentlemen of the press, with your cooperation, we shall attain the goals we have set for theMinistry in 2017.
Thank you and God bless!