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Frankly Speaking: Politics of oil discovery and exploitation


By Tunde Abatan, [email protected] 08165660217

Since 1958 when Oil,Nigerias black gold was discovered in commercial quantity and exploitation commenced in Oloibiri, in todays Rivers state,Oil which have since become the nations revenue basket has become a tool of politics.

It is, because sharing of the revenue among the country’s diverse population took the centre stage as derivation and need which often governs proceeds from other minerals and agricultural exploitation before discovery of Oil was abandoned.

Also abandoned by all other components and regions that made up Nigeria was the preoccupation to source for and look for other sources of revenue that could be used not only for development but as a source of monthly resources for governments to pay workers salaries and embark on other development projects.

What is more, farmers in the Southern ànd Northern parts of the country which grew groundnut and produce pyramids of it , soon ensure the pyramids dissappear.

In the Western and Eastern parts of Nigeria,production of Cocoa which account for their net earnings in both local and foreign currencies especially in Western region was abandoned.

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everybody now que in Abuja,the nations capital to collect monthly hand out from the Unitary government inspired Federation Account Allocation Committee,FAAC.

As FAAC becomes more powerful so the various regions and states which hitherto contribute 50% of their export earnings from Groundnut,Cocoa and Palm Oil becomes powerless .
With the cash products including Coal now abandoned by default they made sharing of oil proceeds a priority.

What is more,since money from Oil revenue which made Nigeria the sixth largest producer in the world became a free monthly handout, this inadvertently made Nigeria a single product economy.

Besides,the politics of oil revenue sharing also made the country gradually lose its federal status as regions which hitherto contribute 50% of their earnings from natural endowment to the centre,now have to abandon all and make the centre emergency father Christmas.

It goes without saying that the foundation of the collapse of Nigerias economy was laid from the time regions became lazy in exploiting their own resources, the moment Niger Delta oil surfaced and made Nigeria super rich not only in Africa but in the world.

Indeed,a visionless former head of state,General Yakubu Gowon at the height of the nations oil.boom, gleefully declared in 1973 that Nigerias problem is not money but how to spend it.
He made the statement when the nation is suffering from serious infrastructural deficits.

However, the launching of oil exploration in the Bauchi and Gombe oil fields November 2022 by President Muhammadu Buharis signifies a turning point in Nigerias political economy as it began the gradual end of exclusivity of Oil production monopoly by Nigerias Niger Delta which natural reserve produces 90% of the nations revenue.

President Buharis launch is also significant giving the fact that,the Bauchi and Gombe basins Oil discovery after over fifty years of desperate search with billions sunk into the project , is seen by watchers of the nations political economy as beginning of steps by the Northern part of the country to call -off the bluff of the South South region over it’s claim of being the source of the nations economic survival.

The claim that, “the rest of the country won’t survive as a nation without our Oil is being gradually called off”.

What is more, the follow -up announcement of the discovery of same black gold in commercial quantity in another part of the North- Nasarrawa state to be precise,by Melee Kyari,Friday January 13 2023 is instructive coming at this period of transition.
It is also seen as another victory by the Northern power brokers who had silently prayed over the years for similar findings of the black gold in their region.

The announcement of the find is also a confirmation and practical demonstration that in spite of initial failures,NNPC has been working strenuously behind the scene to ‘find’ oil by all means in the North to reduce it’s dependent and ‘political bravado’ of Niger Delta oil warlords.

Indeed,Kyari, who is head of a Northern dominated Nigerias oil corporation,which was floated by outgoing President Buhari for obviously political reasons.
It is seen as a means of squaring up with the South and holding the key to Nigerias oil cum revenue power.

That Kyari spoke of urgent need to conclude the exploration after the findings also speaks volume.

Reason: global energy transition has led to a reduction in investment in fossil fuels.

In other words, Kyari is saying that ..let us make as much as possible from Oil before the gates of posterity of cheap oil closes.
Who will not be afraid,the focus on green energy as alternative to fossil fuel to power cars with electricity may soon make oil producers begin to drink their oil sooner than expected.
Europe and the United States are moving ahead in Electric powered cars than earlier anticipated.

In other words, it is not in doubt that Buharis domination of the NNPC board by his Northern kinsmen is made last year because of need to process information avalaible to it on oil find;explore it to the maximum before a Southerner takes over.

Indeed,an analyst puts it more succinctly when he said that announcement of commercial oil find in the North basin is political strategy to tell fellow Northern elites that they need not be afraid of power shift to the south,since they now have oil in their region to lay hands on if the inevitable happens.

The rush to discover,find and explore more oil wells in the North is also strategic since the tenure of Buhari is needed to spend as much as possible by NNPC to find as much oil as possible before he leaves office.

The latest rush to commence exploration by states in the North to complement Nigerias local production of 1.3million barrels, is also to enable as many Northern states as possible become beneficiaries of 13% derivation now being enjoyed by seven southern states.

There is no doubt that the beneficiaries has become rich though the fact remains to be seen whether such resources have been judiciously used to benefit the people.

Same question can also be asked that would many Northern states joining the league of 13%derivation beneficiaries,improve the living condition of nineteen Northern states which in spite of their sons having ruled Nigeria more than others,still remain poverty capital of the World by World bank index ?

Would the state of the Talakawas of the North improve with their joining of the league of 13 % oil derivation states.

Will the dollar rain not stop on the table of the leaders and political office holders as it is with South but with less poverty index?

The addition of more oil producing states in the North would probably reduce the oil disruption by agitative militants and thief’s who have prevented Nigeria from meeting it’s Organisation of Petroleum Exporting Countries,OPEC quota of 2.1million barrels per day?
The non realisation of this production quota by militancy and organised thievery has negatively contributed to yearly budget deficits and local and foreign borrowing with the attendant effect on aggravating pervasive poverty among the citizenry.

Since Oil politics has become the parting gift of President Buhari to allay fears of Northern elites, the fear among the region should be how well the federal govrrnment aided oil findings and benefits is managed to improve the life of citizens rather than pockets of the powerful and rich who has over the years appropriated lives of it’s poor for personal benefits.

Time will Tell of benefits of Buharis parting gift!

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