Insight into Kula’s OML 25: Another Ogoni explosive scenario coming?

Insight into Kula’s OML 25: Another Ogoni explosive scenario coming?

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Introduction

All the ingredients of violence and bloodshed are complete in oil-rich Kula, an island in Rivers State jutting into Atlantic Ocean just like Bonny, Soku (Rivers) and Ekeremor and Brass (Bayelsa). The divisions are sharp and the glimpse of rapprochement, being an agreement coming up on Monday, July 1, 2019, mid-wifed by the state government, may rather be the beginning of a fiercer round of trouble. This is because, the pro-Belemaoil chiefs and youths issued a statement Friday night rejecting the deal, saying they as the majority of Kula people and alleged rightful owners of the oil field were not part of the negotiations.

As was the case in Ogoni before killings started, the Kula people are effectively divided, such that each group led by a ‘king’ is opposed to the other in very deep ways beyond oil. The worse is that Kula has three kings now; King and Amananyabo, Bourdillon Ekine, Oko 28th, and King and Amanyanabo of Kula, Kroma Amabibi Eleki, the Sara 14th. There is also King and Amanyanabo of Opu-Kula, Hope Opusingi. Bourdilon Ekine and Kroma Eleki recently put down their differences and embraced each other after about two decades. They now formed what they term Kula Supreme Council of Chiefs. Now, Opusingi insists he is the rightful king. He has found attention with the Rivers State Government and Shell and Shell.

On the Kula oil field that yields over 44,000 bpd and 105m cfgpd, the Oil Mining License (OML 25), Ekine and other chiefs are on one side (anti-Shell) while Opusingi and a set of chiefs are anti-Belema and so want Shell back.

On political grounds, Opusingi said he is supporting PDP and Gov Nyesom Wike, saying it was the reason why Belemaoil’s CEO was against him. The local government leadership is also behind Opusingi. This automatically divides Kula into APC and PDP, especially as the man who was used by the APC, Awara Biokpomabo of African Action Congress (AAC), is from Kula and is the only candidate still in court with Wike. The PDP seem to see more than the hand of the APC but that of an oil company behind it.

Rivers State position

Gov Wike said it was not true that the state has no role to play in the crisis. He said he was not going to award oil license, and exclusive right of the FG, but that he was right to intervene in intra-community crisis and dispute with oil corporations. He was backed by the fact that many communities who have issues with the same multinationals usually bring it to the state government.

The outcome of his intervention was reeled out on Thursday, June 27, 2019.

Stakeholder communities of Oil Mining License (OML) 25 in Akuku-Toru Local Government Area of Rivers State and Shell Petroleum Development Company (SPDC) have agreed on the procedures  for the re-opening  of the oil facility.

As such, the stakeholders communities and Shell will on Monday, July 1, 2019 sign a Memorandum of Understanding (M.O.U.)  to be facilitated by the Rivers State Government on their respective responsibilities  in the final resolution of the conflict.

This was the outcome of the meeting on Thursday  between Stakeholder Communities of OML 25, SPDC, Service Commanders and   officials of the Rivers State Government on the directive of Governor Nyesom Ezenwo Wike.

Representative of the Rivers State Governor and Secretary to the Rivers State Government, Dr. Tammy Danagogo directed the Solicitor-General of the State to draft a memorandum of understanding on the premise of the resolutions reached at the meeting. He said that the memorandum of understanding would be signed on Monday, July 1, 2019.

Danagogo outlined the four key resolutions  reached during the crucial  meeting on the re-opening  of OML 25.

He said: “SPDC should pay the agreed funds into an account.  The Permanent Secretary, Community Affairs has been mandated to ensure that the funds are transferred to the communities.

“SPDC should be able to pay the available sum latest by Monday. Shell would pay N260million and N75million by Monday.

“The communities should within 7 days of signing the resolution, vacate the facility. Also within two weeks, Shell should pay the remaining part of N1.014billion (One Billion, fourteen million naira)”.

The Secretary to the Rivers State Government added that the meeting resolved that SPDC would therefore obtain approval from NAPIMS to pay the money that accrued between 2009 and 2013.

He added that within two weeks of signing  the resolution, Rivers State Government will set up a platform for Shell and Stakeholder Communities to renegotiate the Global Memorandum of Understanding (GMOU).

General Manager, External Relations of Shell Petroleum Development Company, Rivers-born Igo Weli, said the first set of funds to the stakeholder communities will be paid on Monday.

He stressed that the outcome of the financial reconciliations  will be paid within two weeks of signing the resolution.

Igo Weli added that SPDC in line with the resolution of the meeting, seeks the approval  of NAPIMs for payment of funds for 2009 and 2013.

Chairman of Akuku-Toru Local Government Area, Rowland Sekibo said that the meeting initiated by the Rivers State Governor has recorded a milestone with agreement on the funds to be paid by SPDC.

Member of the Rivers State House of Assembly Representing Akuku-Toru Constituency 1, Major Jack commended the Rivers State Government,  SPDC and Stakeholder Communities for building synergy which will end  in the signing of a Memorandum of Understanding on Monday.

Amanyanabo of Opu-Kula, King Hope Opusingi said that the people of the area are happy with the agreement reached at the meeting, especially the reconciliation  of the funds to be paid  by SPDC.

He said those occupying the flow station are being paid to do so. He said technically, the flow station has been opened as the occupants of the facility are doing so illegally.

Also speaking, the Amanyanabo of Kula, King Kroma Eleki, called for the development  of Kula upon  the reopening  of OML 25. He said the developmental challenges of the community should be resolved.

Counter statement by Kula chiefs and pro-Belemaoil groups

The groups describing themselves as host communities of OML 25 namely: Belema, Offoin-Ama, and Ngeje stated late Friday night:

Our attention has been drawn to a false and misleading statement by the Rivers State Government claiming that the Host Communities of OML25 have agreed to sign a Memorandum of Understanding with SPDC on July 1st 2019 with a view to re-open the Flow Station.

It is disheartening and highly preposterous that the Rivers State Government could peddle such falsehood to hoodwink the unsuspecting public and please its new ally, Shell.

It is most unfortunate that a state government that is supposed to concern itself with good governance would be this desperate to champion an illegal course to forcefully re-open an oil platform that was peacefully shutdown based on the legitimate grievances of the Host Communities.

It is now very obvious that the Rivers State Government supports injustice, marginalisation, enslavement and impoverishment of the Host Communities by the oil multinational company contrary to a recent declaration by His Excellency that Shell is responsible for the crisis in most oil producing communities in the state. The Governor had also stated that Shell with its divide and rule tactics is the major culprit of non-implementation of GMOU with Host Communities.

It is important we remind the Governor of his exact words when he received officials of the Netherlands High Commission to Nigeria at the Government House during a courtesy call on Friday 10th May, 2019, I quote ‘’Unfortunately Shell Dutch Company, they are part of the major culprit, what it does is to divide communities, to make sure that communities don’t work together, for them to have their way but it boomerangs at the end of the day. Shell does not want to obey or implement the Memorandum of Understanding they have with communities, Shell has that history of not implementing Memorandum of Understanding, even when they want to, they will go and find project that does not what anything, it’s unfortunate, so we seek your cooperation that Shell does what it is supposed to do”.

It is surprising that a governor who received commendation for standing by the truth as a result of his statement against Shell, would suddenly turn around to collude with the same company to oppose our common struggle for emancipation from the decades of injustice meted out on us by Shell.

Furthermore, we were alarmed by the decision of the Governor to intervene in the protracted dispute between us and Shell which is already being handled by the Presidency and NNPC. It is worrisome that Shell and Rivers State Government who both sent representatives to our meeting with the NNPC in Abuja on the 22nd of August 2017 to resolve the dispute, decided to meet with the wrong people at the Government House in Port-Harcourt to resolve a matter that is already being handled by the federal government.

Shell’s General Manager, External Relations, Igo Weli, cannot feign ignorance of the delegation of the Host Communities who were at the meeting with them.

Inviting strangers, political allies of the Governor as well as some renegades from Kula to a meeting to resolve the lingering dispute leaving out the Host Communities who led the shutdown of the oil facility is the height of bias and insincerity on the part of the Rivers State government.

As a lawyer, His Excellency, ought to know that the State cannot adjudicate on such matter as it is on the Exclusive list of the Nigerian Constitution and not a state affair.

Let it be also known that the Oko Royal House of Kula, the bonafide owners of Belema Community gave the acreage to Shell to build the oil facility.

In the light of the foregoing, we therefore dissociate ourselves from the outcome of the said meeting where the Host Communities purportedly agreed to sign an MOU on 1st of July 2019 with SPDC to re-open the oil facility.

It should be noted that the Host Communities of OML25 known as the Belema Flow Station comprising Belema, Offoin-Ama and Ngeje were not part of that meeting and will never be part of any such meeting called by the Rivers State Government on this matter because it does not fall within the purview of the state government. It is our view that the Rivers State Government can only play advisory role on this matter and not to mediate or adjudicate on it.

We therefore, call on the Federal Government, Amnesty International and the International Criminal Court to hold the Rivers State Government and SPDC responsible should any harm come on our women and children who are peacefully occupying the oil facility over legitimate grievances against Shell.

We also call on the Government and good people of the home country of Royal Dutch Shell to call Shell Nigeria to order by prevailing on the company to respect the right of the Host Communities of OML25 in the interest of peace.

We insist that we do not want SPDC any more in our land. We will continue to occupy the oil facility peacefully until our demands are met. Let the Rivers State Government and Shell come with their brute force, we are ready to die for this course. We remain resolute in our demands for the divestment of OML25 by SPDC taking into consideration the Host Community right-of-first-refusal.

(Signed on behalf of the Host Communities of Belema, Offoin-Ama and Ngeje Community: Chief-elect Mpakaboari Welsch, Chief-elect Oputuboye Walter, Prince (Barr) Opunabo Ekine, His Royal Highness, Sibia Aaron Sukubo, Offo XIII, Chief Ibiosia Nath-Sukubo, Chief Ibinabo Daniel Kiliya, and Chief (Barr) Wapakaboari A Gaga.)

Stage is set

With these two positions, and the kind of powers and petro-dollars behind them, the stage seems set for volatility. The Rivers State may be forced to order use of force to evacuate the women occupying the platform close to the ocean. The chiefs and youths may mobilize sea power and other powers to counter this. The result could only be sea wars, except the FG intervenes right now.

Shell

Shell officials were not ready to speak to the press other than their statement calling on all parties to come to the negotiation table. Shell said all efforts were being made to resolve all issues and resume operations, and disclosed huge sums waiting for the Kula community as soon as the MOU was signed.

Shell statement Friday morning said: “Working in close collaboration with the Kula community, SPDC has implemented a Global Memorandum of Understanding (GMoU) in the area that led to a wide variety of social investment projects including university scholarships awards.

“However, following disagreements in the community, the Rivers State Government initiated a mediation process which resulted in the creation of the Kula Project Implementation and Monitoring Committee (PIMC) as an interim platform for the delivery of social investment initiatives and programmes worth N263 million in the Soku-San Berth Project. These projects were outside the GMoU projects initiated by communities using funds provided by the SPDC JV.

“A GMoU was eventually signed in 2014 for the Kula Cluster but has not been implemented because of continuing intra-community disagreements. As at 2015, there were a total of 11 court cases involving different groups with SPDC as a co-defendant in all of them. Sadly, these legal suits and disputes have rendered it impossible to implement more planned development projects in the affected communities.

“Despite the challenging environment, the SPDC JV set aside more than N600 million for a five-year period beginning 2014 for development initiatives at Kula and the satellite communities of Belema, Offoin-ama and Boro.

“SPDC JV has also invested over N352 million in improvement of school infrastructure, sanitation and health outreach programmes, construction of walkway for the community and electricity supply in Kula Kingdom in the past 10 years.

“The host communities of OML 25, including Belema and Offoin-ama have continued to benefit from contract awards, employment of unskilled labour and our social investment programmes, including yearly award of regular and special scholarships to eligible candidates from the area.

“Notwithstanding that SPDC has divested its equity in OML 24, which covers most of the communities in Kula and Belema, the SPDC JV has continued to implement agreed Social Investment programmes such as scholarship and entrepreneurship schemes for the communities there. With the divestment of its interest in OML 24, SPDC relinquished operatorship of the facilities in that field.

Other sources

No Shell official was ready to speak any further on the matter after the statement. BD Sunday however gathered Shell is very angry over the turn of events in Kula and the role being played by some persons and organisation in stoking up fire in the industry.

Sources said it was not true that Shell said there was $300m spent on Kula, but said they pointed to various social investments projects being executed in the oil region without excluding any section of the oil communities.

Other sources pointed at the CEO of Belemaoil as a beneficiary of Shell’s community empowerment drive, saying the man grew in the industry with jobs he executed for Shell over the years. He acquired intelligence, skills and contacts to become an oil magnet today, owning an oil field and now into exploration.

Insiders it is not true also that Shell walked out on the NNPC or from the negotiators. They said the Shell arrowhead was being threatened by ex-militants that came to the meeting in the name of youths. They said some told him where he lived in Port Harcourt and so on. Sources said the atmosphere was no longer conducive for negotiations.

It was also gathered that the community has not been able to form a consensus to present their demand. It was gathered that even in Government House, this scenario was repeated.

On why GMoU has not been implemented in Kula, the sources said Kula stakeholders have been in court and many court orders fly about asking oil companies not to release the funds; thus over N1Bn now waiting to be utilised.

Despite that, it was gathered that N490m spent under the project GMOU (PGMOU) in Kula. The moment peace returns, money will flow in Kula.

Danger at sea

Many sources say the Kula sea front has been violent over the years. The reconciling kings also mentioned this as Bourdilon remarked on May 4, 2019, at the reunification meeting that the sea had been rough and that violence had been high. He hoped the reunification would bring all of that to a close. He however hinted of enemies out there eager to pounce but must be rebuffed now that the warriors are united.

It was gathered that violence was part of the reasons why no MOU worked in Kula in recent years. Some seven persons were killed at a point and skirmishes remained for long, added to litigations.

Pirates and kidnappers have added to the danger at sea on the Kula axis, such that no person easily travels that way without security escorts. The hope is that peace would resolve all of that.

A Shell source said: Nobody would feel free to put persons on such a route every time.

Kula grievances

Kula OML 25
Kula OML 25

The chiefs and elders that have been speaking with the press so far accused Shell of ‘not doing anything since OML 25 about 33 years ago. This seems to offend Shell who point at huge social investment schemes in the oil region and huge sums waiting for Kula people due to litigations.

The Kula people also accused Shell of divide and rule but Shell wonders if it is also oil companies that have made them to divide in many other matters far outside oil. Shell wonders if anything should warrant the community people to take over an oil platform belonging to an organisation. Sources said such examples would send dangerous signals around the world and that even other ethnic groups could apply same arm-twisting methods to collect oil fields to their own sons.

A Kula son revealed at a press briefing on Wednesday that the real anger is that Shell wanted to divest in OML 25 but chose another indigenous oil company (Creastar) instead of Belemaoil owned by a son of the area. This could be why they said it was better for OML 25 to remain permanently shut than see another oil company handle it.

They said while the matter was on, the FG (Ibe Kachukwu) that seemed to have a listening ear to Kula suddenly renewed Shell’s license for another 20 years at almost $1Bn, according to sources. This seemed to pull the rug off the confidence feet of the Kula people and they angrily now prefer to fight to finish.

It is not clear if Shell will one day divest in it but some fear Crestar may be brought in through the back door at a future time if the deal is allowed to stand. Shell has always insisted that nobody uses violence to acquire oil fields. This could be hints that Belemaoi should cool down and use other strategies to get to desired destination. Some think if Belemaoil helps in the peace process, they could be the beautiful pride in future to bid to acquire OML 25 from Shell.

Belema: Calculations that fired the natives

When Belemaoil successfully acquired OML 55, after several difficulties and loans that almost ruined the company at infancy, the indigenes who came into oil boardroom for the first time, were presented with oil facts and cash realities. This seemed to excite most of them. By 2017 when this was real, the managers calculated thus:

Oil calculations for 2017

Current price per barrel                             $55

Current official Dollar rate                        $1 = N305

OML 55 crude alone (excluding gas)        12,000 barrels per day (now 13,000)

One day income: 12,000 x $55                  $660,000 or N201m

One year income                                        N73.4Bn

Average spend to extract crude                  $25 per barrel (now $29)

Possible gross extra per day                      12000 x $30 = $360,000 or N109.8m

Possible gross profit per year                    N40Bn

Sharing: 60% to FG/NNPC                       N24Bn

Possible surplus to Belema/Seplat             N16Bn (for salaries, etc, before profit)

This figure seemed to improve as oil went to about $70 per barrel. The hunger to acquire more fields and open more opportunities became strident.

Conclusion:

The Kula kings and elders said they are ready to listen to the FG. The NNPC could look into the Rivers Government peace process and endorse it and get Kula to accept it. The FG can also make Belemaoil and Shell to reach rapprochement that could be a win-win situation, insiders suggested. Silence on the part of the FG and NNPC when fires are being ignited could present another Ogoni in their hands.

There are hints that the entire Ijaw nation could be dragged into the matter and this could spread to Bayelsa and Delta states.

The agreement may be signed on Monday, July 1, 2019, but its enforcement could be a difficult thing and a violent consequence. Many think more engagement should be made despite the signing.

 

Ignatius Chukwu



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