afrol News - New oil bill favours Nigerian states

New oil bill favours Nigerian states

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Nigerian President Olusegun Obasanjo

The President had worked for federal rights over offshore oil operations

President Olusegun Obasanjo

afrol News, 31 October - In a recent enactment, the Nigerian Senate decides to abolish the previous dichotomy between onshore and offshore oil revenues. The bill alters an April Supreme Court decision to channel all offshore oil revenues to the federal government.

The law, approved by the Nigerian Senate last week, will be cited as the "Allocation of Revenue act 2002" and was deemed valid from 1st April 2002. This means Nigerian states expect compensation from the federal government for the last half year.

More specifically, the continental shelf and the Exclusive Economic Zone contiguous to a state of the federation "shall be deemed to be a part of that state for the purposes of computing the revenue accruing to the purposes from that State pursuant to the provisions of the constitution of the Federal Republic of Nigeria, 1999 or any other enactment," according to a statement from the Senate.

The Bill was well supported by both the Executive arm of the Government and 28 senators, including the leader of Senate, Mohammed T. Liman. Senator Adeweri Michael Pepple from Rivers State, also known as the chief whip of the Senate, stressed later that "the passage of the Bill marked the beginning of absolute calm in the Niger delta region." Rivers State, by chance, is a major oil producer. 

The "total selflessness" on behalf of the senators was also emphasised, the Senate thus showing itself as "a body committed to national interest." 

For the moment, this is the last chapter in the dispute over Nigerian oil revenues, which has made its imprint on Nigerian political life for some time now. 

Earlier this year the Nigerian Supreme Court ruled that areas outside the low-water mark of the coastal states are federal property, meaning that littoral states did not have the right to a share of the revenue of oil production there; a decision which, it is safe to say, created much frustration on behalf of the federal states. 

The states held they had, after all, endured their fair share of the negative side effects derived from the Nigerian quest for oil riches. Only in 2000, President Obasanjo had signed into law a new revenue sharing formula with littoral states by which the latter receive 13 percent of oil revenues, compensating their efforts, versus the previously allotted 3 percent. 

The question that naturally emanates from this present state of things is how the interstate border delineation (between littoral states) will be effected, as it apparently remains to take place.

By Knut Henrik Gjone

Sources: Based on Nigerian govt and afrol archives


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