“… all stakeholders in the Nigerian energy value chain, have a moral burden of providing minimum social and infrastructure development in the Niger Delta region, at least 20 years before the 2060 zero carbon emission deadline accepted by Nigeria in the Paris climate change agreement…”

By Ikechi Ibeji

The recently inaugurated Dangote refinery and petrochemicals complex is a commendable project which has brought massive physical and economic development to a large swathe of what would have been rural Lagos State. It has also created thousands of jobs directly and will in due course create hundreds of thousands of other jobs indirectly, from the many associated businesses like hotels, supermarkets, housing estates, hospitals, schools, and banks that will spring up within and around the industrial complex.

Add to the above, critical infrastructure such as the Lekki Deep Seaport, and a new Lekki Airport, to service the bustling commercial city of Lagos, and we can begin to imagine the foresight of those who envisioned the Lekki Free Zone and convinced the Dangote Group to site their behemoth industrial facility there.

I noted earlier that if the Dangote Group had prioritized nearness to feedstock in determining the location of the fertilizer plant and petroleum refinery - and built the industrial complex along the virgin coastline of the Niger Delta, (especially the areas between Bayelsa and Delta States, facing the Atlantic Ocean), they would have saved the cost of 1,110 kilometres of subsea pipelines built for carrying natural gas and crude oil from the Niger Delta to Lekki.

There must have been important value propositions for citing the plant in Lekki, rather than the Niger Delta. For instance, apart from the proposed Ibaka Seaport being promoted by the Akwa Ibom State government, and the already congested Onne port and Oil and Gas Free Trade Zone, there may not be any serious new port development in that axis that would have serviced the Dangote project.

The foregoing however is not to say that other promoters cannot launch multiple similar (even smaller) projects in the Niger Delta region, to process natural gas and crude oil, including floating LNG plants. A compelling argument for revisiting crude oil and natural gas-driven industrialisation of the Niger Delta is that Nigeria should get her hydrocarbon reserves out of the ground and converted to other products as quickly as possible, given the global race towards net zero carbon emissions by 2050 and 2060, according to the Paris Climate Change commitments of most of the signatories, including Nigeria.

The push to attain the targets set for carbon emissions has effectively started the process of sidelining petroleum as the primary source of energy for the world’s leading industrialised economies. In turn, proprietary technology for drilling, field development, and reservoir management, as well as long-term capital, will increasingly become unavailable for third-world countries like Nigeria, with the result that large chunks of their petroleum reserves may end up permanently trapped in the ground.

As the international markets for fossil fuels begin to shrink, in-situ processing of produced oil and gas is the way to go – like what the Federal Government is doing with the Kolmani field discovery in Bauchi State. The US$ 3 billion integrated project, incorporating upstream and downstream activities, arising from the discovery of a huge oil and gas reservoir in the Gongola Basin will include a 120,000-bpd petroleum refinery; a gas processing facility with a capacity for 500 million cubic feet per day, as well as a 300 MW power plant. 

Back to the Niger Delta. The Federal Government, the state governments, the IOCs, other oil producers, and all other stakeholders in the Nigerian energy value chain, have a moral burden to ensure minimum social and infrastructure development in the Niger Delta region before revenues from hydrocarbons decline substantially due to the climate change agreement.  It is not acceptable that more than six decades after the first commercial oil shipment from Oloibiri, the whole region is in ruins – with the land, waterways, and vegetation devasted by crude oil and gas pollution and other forms of damage to the environment, throughout the region.

Since the Sir Henry Willinks Commission submitted its report in 1958, after one full year of deliberations and receiving memoranda, there is very little to show the intention of the Federal government to implement the unique development implementation strategy or model the commission proposed for the rugged terrain of the Nier Delta.

On the contrary, the IOCs and all the governments at the national and sub-national levels, have worked at cross purposes with half-baked arrangements geared to meeting their immediate target of producing and selling oil for immediate cash.

The weak institutional arrangements grudgingly put in place, like the Niger Delta Development Commission and the state government agencies set up to manage development projects in oil-producing communities, have become bazaars for politicians, illustrating to the fullest, the rentier disposition of the Nigerian political class. Consequently, those commissions have failed to deliver.

Even the “Global MoUs” implemented between the oil-producing companies and their host communities, which have achieved more success than the government intervention agencies, have not been adequately funded.

A recent addition to the effort of the government is the Oil Communities Equity Fund provided for in the Petroleum Industry Act.

From the foregoing, the situation has indeed become urgent. There should be a massive cleanup of the waterways, the land, and fauna, not just in Ogoniland as is being done currently, but throughout the region, before the major investors in oil prospecting begin to find the business unattractive and start leaving the area. Indeed, industrialisation is win-win for all parties because the capital created and the accompanying infrastructure will help indirectly in the cleanup. In addition, government will get additional revenue from more taxes and the hundreds of thousands of new jobs will eliminate poverty.

With coordinated efforts and well-thought-out incentive packages, there could be anything between five hundred and one thousand medium-sized projects that could take off in the next two years. If the Dangote project could be delivered in about 10 years, it means that by 2035 - at least 20 years before carbon net zero targets for many countries, the Niger Delta would have become fully industrialised. The twenty years window will be enough time for the acceleration of industrial growth and associated wealth as well as the entrenchment and deepening of the economic benefits for Nigeria and the people.

There are several take-off points, which may be low-hanging fruits for the Federal government, the state governments, and the private sector, to collaborate in setting up gas-based industrial facilities throughout the Niger Delta and Anambra Basins, where there are already established huge commercial crude oil and natural gas reserves.

One such industrial complex to be developed in the Niger Delta is the Ogidigben Gas Industrial Park, envisioned by the Jonathan government, which has been largely abandoned. Although former Minister of State for Petroleum Resources, Timipre Silva reconstituted the Steering Committee in October last year, there is no clarity in the direction of the project.

Interestingly, if completed, the Ogidigben project has the scope to be bigger than the Dangote Industrial facilities in Lekki. The project was designed as a cluster of chemical plants and an aluminium smelter.  Sitting atop huge oil and gas reservoirs in the Western Niger Delta, including Chevron’s iconic Okan, (Nigeria’s first offshore field to export crude oil), the Ogidigben project was envisaged to have the biggest fertilizer plant in the world, which would have shot Nigeria into the number one position in urea production before now. Other proposed products from the industrial park are petroleum products, polypropylene, and ethanol among others.

Truth be told, two key driving factors for the success of the Dangote project in Lekki are the entrepreneurial resilience of the promoter and the proactive support provided by the Lagos State government through the development of the infrastructure for the Lekki Free Trade Zone, including the seaport.

For the Ogidigben project to fly, the incoming Delta State government has to own the project by developing aspects of the Free Trade Zone and the deep seaport. This investment by the state government, along with other pragmatic ease-of-doing-business initiatives will then encourage the international investors to commit to the point of no return, which will in turn, force the hand of the Federal Government to fast-track aspects of decision-making by Abuja required for the project to succeed.

Another important project, in the same Warri area as the Ogidigben Industrial Park, is the Warri Industrial Business Park for oilfield operators. This project was conceived in 2008 by the Delta State government, in partnership with the Jurong Port Authority, owners of Singapore’s Jurong Port and Free Trade Zone – one of the busiest and most efficiently run seaports in the world.

Another latent project is the proposed Niger Delta Energy Corridor, similar to another such corridor linking Houston with Louisiana, in the United States. The Niger Delta Energy Corridor has been promoted by a special purpose vehicle known as TechDev Limited and will have a multi-model super highway with road and rail running from Ahoada to Onne, and up to the Ibaka seaport in Akwa Ibom state. The Ahoada end will have an outlet to the sea through a dredged Sombrero River, while the other end will have access to the sea on two fronts at Onne and Ibaka deep seaports.

A key infrastructure for the corridor’s success is the proposed Lagos – Calabar highway and railway project. The TechDev proposal includes a brand-new city – BRACED City, to be located at the tip of Bayelsa State, near its border with Delta State, where Nigeria has its best natural harbour. The new city which will be an industrial and tourism hub, may also expand in the other direction to the shoreline of Rivers State.

The name “BRACED” is coined from the first letters of all the states in the South-South region – Bayelsa, Rivers, Akwa Ibom, Cross River, Edo, and Delta. Already, the state governors in this region have launched the BRACED organisation and they have indeed held a few meetings to discuss the development of the South-South region. But this needs further development.

The Niger Delta Energy Corridor may start with gathering small deposits of crude oil and gas in abandoned non-commercial pools and creating multiple mini plants processing gas and crude oil into power, petroleum products, plastics, and fertilizers. The next level will be the actual design and execution of big-ticket projects like the Warri Industrial Park and plants similar to the Dangote facilities in Lekki.

There are also prospects for smaller projects in Imo and Abia states, which are fringe oil-producing states. While the two states are included among the Niger Delta Development Commission coverage areas, South-South politicians like to exclude the two states as part of what they see as “the core Niger Delta”.

The recently flagged-off dredging of Orashi River, which will open a channel connecting Oguta Lake to the sea, creates another sea-borne energy industrial corridor with the oil and gas fields on both sides of the river, which can be connected to the sea, with several industrial complexes set up along the river banks. The area hosts the integrated oilfield and refinery project of Waltersmith Petrolman, one of Nigeria’s marginal field operators, which is an excellent illustration of what is possible.

As for Abia state, there are already two power plants at Ugwunagbo near Aba and close to the Abia oil fields in the Asa area of Ukwa West Local Government area. The Ugwunagbo area also has some gas reserves and a well-developed gas distribution pipeline network built by Shell in the 1970s to supply the Aba hitherto thriving manufacturing hub in the area. With huge limestone deposits, the area is also open to the establishment of cement manufacturing plants. If these big potentials are tied to the proposed Enyimba Economic City and other initiatives, the new Abia State government already has its plate full in implementing its strategy of using Aba as the launchpad for Abia Economic Development.