Ali-Ogba :Oil Output and Revenues

 The oil producing towns and villages in Ogba –Egbema Local Government Area of Rivers state are mostly rural communities. In these communities, are located the oil operations of Shell, Nigerian Agip and Elf Nigeria Obagi fields. Ali-  Ogba communities accounted for 101 out of the 416 wells in Rivers state representing about 24.3 % of Rivers state wells or 8.4% of the total number of wells in the country. It is estimated that between 1971 and 1989, Elf discovered and perhaps drilled 116 oil wells in the are (Akanimo, 2004)

In terms of volume of oil produced, between 1971 and 1975, Ali-Ogba communities contributed 41.3 million barrels of oil to the country’s total production in the Nigerian Agip Oil company (NAOC) Idu and Obiafu fields, and Elf’s Obagi field contributed 94.5 million barrels. In total Ogba communities contributed 135.7 million barrels out of a total production of of 183.9 million barrels and 108.8 million barrels for NAOC and Elf respectively. This represented 46.4% of the the two companies total oil production.

From 1976 to 1979, NAOC Ali - Ogba fields produced 90.2 million barrels out of the company’s total output of 310.4 million barrels, while Elf’s Ogba production was 77.1 million barrels out of a total of 113.6 million barrels. Thus out of a total of 424 million barrels produced by NAOC and Elf, Ogba accounted for 167.3 million barrels representing 39.46% of the total oil output. Thus between 1971 and 1979, for example, Ogba community accounted for 42.95 % of NAOC and Elf oil production in Nigeria.                                    

Between 1971 and 1975, Elf’s Obagi field  located within the area occupied by the following communities: Obagi. Ogbogu, Oboburu, Idu, Erema and Akabuka contributed 108.8 mb or 90% of Elf’s total oil output. By the end of 1979, it accounted for 171.6 mb or 77.2% of Elf’ total production. Based on these figures, the Obagi field’s annual average oil output was 19.1 mb. Currently, Obagi field’s oil production capacity is about 670 mmbls of oil and 811 bcf of gas (Mbendi Information for Africa, 2001)

             In monetary terms, between 1971 and 1979, the Nigerian government realized N418.5 million per annum from oil from the area and NAOC and Elf realized N332.7 million and N160.0 million respectively.  Out of the Government’s N418.5 million annual oil revenue, Ogba and Egbema communities contributed 18.0%, which is equivalent to N75.33 million. Based on the fact that Ogba alone accounted for 75% of the oil output of Ogba and Egbema communities, Ogba communities alone contributed N56.87 million per annum to the Federal oil revenues during this period.

There are many benefits as well as costs for communities in an oil producing region. The impacts of the oil industry which could have beneficial as well as adverse effects on various Ali-Ogba  communities in which oil industry operations and activities occur, include:

(i)     generation of employment opportunities

(ii)    generation of incomes or revenues through land rents, royalties and taxes to land owners and government, and profits to investors

(iii)  skills development

(iv) provision of social and physical infrastructure

(v)   ecological disruptions and environmental pollution

(vi) disruption of socio-cultural systems, and

(vii) land use changes 

In spite of the contributions of Ali-Ogba to the governments’ revenue base in recent years, there have been little or no significant community development projects undertaken in many of the communities in partnership with the government or oil companies in comparison with other Nigerian communities. For example, in the provision of electricity, water supply, roads, education, health facilities and employment, Ali-Ogba communities have not fared as well as other communities in the state. Until very few years ago, no village or town had electricity apart from Omoku although natural gas associated with the oil exploration beneath its soil is flared away every day. It was not until the mid eighties that Akabuka, Ogbogu, Obagi and Erema were supplied with electricity and water at a cost of N2.0 million by Elf. Towards the later part of the nineties, more communities were, however, linked with the National Electric Power Authority (NEPA) grid line running from Omoku to Ahoada. The NEPA power supply has been very erratic and it is hoped that the problem would be minimized by the recent commissioning of the gas turbine power system by Elf. It is hoped that all Ali-Ogba communities would be linked to the gas turbine powered electric  system

 Apart from the trunk B Ahoada-Okwuzi road constructed in the sixties, the only paved roads available in Ali-Ogba until a few years ago were those constructed to serve oil company operations such as  Ogbogu – Obagi – Oboburu – Idu roads, Ede –ama road, Obite – Egita road and  the link road to Erema and Obukegi from Ahoada / Omoku road.  The most recent paved road is the Omoku – Ikiri – Egbeda – Elele roadA constructed about a year ago by Niger Delta Development Commission (NDDC)  

Water supply is one of the basic necessities of life. For the improvement of health, welfare and productivity of people, supply of good drinking water is essential. However, many of the Ali-Ogba communities do not have good sources of water supply. Before the Nigerian civil war, only Omoku had a good supply of water among the 12 locations with water schemes in Rivers state. The Rural Development Division of the Ministry of Rural Development and Social Welfare tried to install physically operated rural water supply schemes to communities with a population of 2000. Ali-Ogba communities got 22 out of the 197 planned in the state. But, in the area of piped borne rural water supply, only Ohalimini and Erema were considered for service, which did not materialize. Till to day, many communities depend on one or two mono pumps for their communal water supply. A few who can afford it sink bore holes in their compounds to ensure regular water supply. Yet, the area enjoys more than 8o inches of rainfall per annum. This rainwater was clean in the past. But, to day, it is unsafe for collection and use for domestic purposes because of atmospheric pollution due to the oil industry.

Apart from the paucity of social services, government has not done much to facilitate local economic development through its agricultural projects. For example, the Rivers state government planned to establish four agro-service centers in the then Ahoada Local Government Area (ALGA) during the Third National Development Plan period (1975-80). One of these was planned for Ogba to be located in Obrikom based on a walking radius of 15 km and land area. But, it did not happen.

Summary and Conclusion:

Ali-Ogba has undergone significant changes politically, socially, economically and environmentally during the past decades. These changes have resulted from forces internal and external to the area. However, Ali-Ogba communities are yet to utilize its image as an oil producing area and her contribution to the political and economic progress of Nigeria to achieve a significant level of economic development. This, in my view, is because it has failed to function as a united ethnic community with shared interests and destiny to enhance its political, social, economic and environmental development interests. Instead, the communities have seen themselves as competitors for a piece of the oil companies’ pie. They have failed to exhibit a distinct economic and political identity, unity and consciousness in comparison to other contemporary Nigerian communities. The absence of unity and consciousness in the political and economic spheres of Nigeria is a major handicap in the progress of Ali-Ogba not only in Rivers state but also in Nigeria

It is not to the interest and welfare of Ali-Ogba communities to experience only the negative consequences associated with the exploration of her natural resources without reaping the benefits.. For Ali-Ogba to take its rightful place in Nigeria and Rivers state, it must be conscious of its economic and strategic importance in the country. Its citizens must be less selfish, and the communities must eschew self –seeking behavior and forge a political and economic unity that transcends individual community interests. It must refocus its attention on the collective interest of Ali-Ogba as a people united by common historical, cultural, political, economic and environmental experiences. It must realize that Ali-Ogba can only compete effectively within the context of the Nigerian society if it is able to speak with one voice and assert its weight politically as a  community,  not as separate settlements or communities begging for hand out from government and oil companies. It is only by so doing that it can move away from being continually marginalized  in contemporary Nigeria society.

                  UMUOGBAUSA, INC             

                                                             “TALKING POINTS’

                                                                        on

BUILDING CAPACITY FOR SUSTAINABLE DEVELOPMENT

                         IN ALI-OGBA: A SWOT ANALYSIS

                                                      By

                        Professor Chukudi Vine Izeogu, Ph.D. 

                                     UMUOGBAUSA, INC SECOND ANNAUL CONVENTION

                                                     WINGATE INN, HOUSTON, TX

                                                             MAY 28 – 30, 2004 

Ali-Ogba, located in the central Orashi-Sombreiro plains of Rivers State, Nigeria, is one of the major producers of the oil that fuels Nigeria’s economic development in recent decades. In his book, Ali-Ogba, Ellah posits that “according to current oil company records, no local government in Nigeria produces as much crude oil and gas as the Ogba/Egbema/Ndoni (ONELGA) local government”1 

As a result of the oil industry, Ali-Ogba has undergone significant political, social, economic and environmental changes during the past several decades. However, despite its image as one of the main contributors to the wealth of Nigeria, there is a lot of poverty in many communities.

 At the same time that Ali-Ogba makes very significant contributions to the country’s economy, this oil producing area has  remained economically marginalized and left in the backwaters of the country’s socio-economic and political development. This poses dilemmas for Ali-Ogba people. For example, while the oil industry in Ali-Ogba creates jobs and wealth, these benefits are not equally accessible to many Ogba people compared to other Nigerians. In short, Ali-Ogba communities  (oil producing and non oil producing) are faced with problems of unemployment, under-employment and low wage jobs. This state of affairs in the oil producing communities of Rivers state prompted the Governor, Dr. Odili to speak out this past February urging oil firms to stop giving employment to non-natives at the expense of the indigenes of the areas of their operation. In the Governor’s own words:

“It is difficult to explain to a petroleum engineer from Rivers State who has been out of  the university for five years and out of work, that sees his contemporaries during the youth service years, fly in from other parts of the country where there is no oil, coming to man the PHRC for him. It is equally difficult to explain to him that the industry that is behind his house, is being dominated by people who are less qualified than him (the Rivers man)”2 

In addition to environmental degradation and a rapidly depleting natural resource base that contribute to poverty, the area is witnessing social disorganization caused by competing value systems. A related dilemma is that although some oil producing communities have benefited from oil company jobs and contracts, many of these economic benefits have not been widely spread. As a result, these communities are lacking in many indicators of local economic development.

Currently, there is a renewed interest of Government in local economic development especially in the oil producing communities. However, little attention has been focused on how the capacity of Ali-Ogba can be enhanced to achieve meaningful sustainable development. An analysis of the strengths, weaknesses, opportunities and threats (SWOT) of the area provides a clear understanding of the area’s assets, the factors that militate against its development, and the strategies for building the capacity of the area to achieve meaningful and sustainable development.

This purpose of this presentation is to highlight the assets and contribution of Ali-Ogba to Nigeria’s economic development, its continued marginalization in comparison to other communities in the country, and the threats and challenges it faces that must be addressed if it is to benefit from the economic resources produced from its land and achieve sustainable development. The objectives are to draw attention to:

-  the common heritage and destiny as well as resource potentials of Ali-Ogba,

-  the role of Ali-Ogba in fuelling the Nigerian economy,

-  the failure of the State to adequately invest in the development of the area,

-  the forces robbing the communities of their capacity to strive for meaningful development, and to

-  challenge Ali-Ogba communities to demonstrate awareness of its assets and threats, a high level of political consciousness and a sense of community unity,  forge the necessary alliances and engage all stake-holders in the area so as to  benefit from the oil resources produced from its land and achieve sustainable development.

1.         Ali-Ogba Communities’Assets and Strengths:

·      Common ancestral history, heritage and destiny (Ali-Ogba communities share common cultural and socio-political organization).

·      Rich natural resource base (there is available land, forest and water resources supportive of agriculture and fishing, and there is also available oil and gas, a strategic and high technology economic resource with international demand.

·      Social and Human resources (there is available a growing youthful and educated      population)

·      A network of all season transportation network (roads) and rivers.

·      A network of urban and periodic local markets that facilitate trade

        ______________________________

1  Ellah, F.J. (1995) Ali-Ogba: A History of Ogba People Enugu, Fourth Dimension Publishers, p4

 2. Daniel, Soni (2004) The Punch, Port Harcourt, Nigeria, Feb. 19, 2004 (Reporting on Dr. Odili’s comments             during the visit Dr. Sola Ayan-gbile, Managing Director of  PH Refining Company to his office

·      Proximity to employment centers (oil industry, public sector and educational institutions)

·    Increased number of educational institutions (primary, secon