Legislature passes bill to pacify oil region

Nigeria’s federal legislature has passed a presidential bill which abolishes the dichotomy between onshore and offshore oil revenues, thus increasing the revenue which states in the restive Niger Delta region stand to obtain from petroleum-mining activities. The bill entitles states in the Niger Delta to 13 percent of all oil revenue, whether from onshore or offshore production. Forwarded by President Olusegun Obasanjo early in September, it was passed by the House of Representatives on Wednesday. The Senate followed suit on Thursday. When signed into law by Obasanjo, it will end a dispute between his administration and states in the Niger Delta that followed a Supreme Court ruling in April awarding control of offshore oil revenues to the federal government. Under the 1999 constitution that brought Obasanjo to power, at least 13 percent of total oil revenue was to go to the impoverished oil region. But Obasanjo, on taking office, limited the allocation to 7.5 percent on the grounds that offshore oil belonged to the federal government. Following objections by the affected state governments, the federal government last year filed a complaint at the Supreme Court and won a favourable ruling. But the legal victory created serious political problems for Obasanjo. The ruling was viewed adversely in the oil region where the finances of most state governments were hurt. Worst hit were states like Akwa Ibom and Ondo, that lost most of their share of oil revenue since production in their areas was mainly offshore. In an apparent reaction to the Supreme Court ruling, communities staged a series of protests in the Niger Delta, disrupting the operations of oil transnationals. With Obasanjo seeking re-election next year, his electoral fortunes in the Niger Delta, where he scored a massive victory in 1999, were threatened as resentment against his government grew. With the new bill Obasanjo has obtained a clever political solution, and started the repair of his political standing in the region - which produces almost all of the oil on which Nigeria's economy depends heavily.