Oil and gas: Developing a model for stakeholders’ engagement

“MY visit here is a means of interaction, collaboration and partnership that we need one another”. This statement captures the level of seriousness and intense commitment of the Akwa Ibom State government led by Governor Emmanuel Udom to entrench a great relationship with International Oil Companies (IOCs) as well as their local counterparts. The crux of the sacrifices made by the state government to see this great relation materialise is the peace, security and economic development of Akwa Ibom state; prosperity of the host community and continuous operation of IOCs, which eventually would make all the parties happy.

From ExxonMobil, on a visit to its facilities at Qua Iboe terminal, Ibeno Local Government Area of the state, where Governor Udom made the foregoing statement, to other oil companies operating in the state, the government has provided an atmosphere of peace and security for them to operate. On the other hand, the IOCs are expected to reciprocate by being responsible in their actions and obligations to their host communities and the state government.

 

Security as the progenitor of development

Security is chief to the development of any society, especially in this part of the world where there is a burgeoning rate of unemployment, which experts have described as a ticking time bomb. Governor Udom totally understands this, that’s why he has, through his administration’s industrialisation drive, taken many youths off the street by providing them with sustainable jobs even in the face of the devastating effects of COVID-19, because the government has provided the basic infrastructure needed by investors.

Security infrastructure is at the base of security dynamics and any serious state government would invest heavily in it. This, the state government understands and has taken seriously. A recent report says security is at the heart of the high operation cost incurred annually by IOCs. For instance, the top five oil companies in the country spend a whopping $683 million annually to protect their staff and assets in the country.

So, when the Udom-led government decided to invest heavily in security of life and property which would eventually benefit the IOCs, the companies understood the boost it would give their operation in the state.

On several occasions, the government has donated patrol vehicles to the Akwa Ibom State Police Command to enable their personnel carry out effective monitoring of the state and keep criminal elements at bay, the latest being the donation of 30 new utility vehicles to the Police on December 24, 2020. The vehicles are the first batch of 100 patrol trucks earmarked for presentation to the security agencies.

The state has also installed top of the range close circuit cameras at entry points to the state and strategic locations within the state. This has in no small measures helped the government and security agencies in the state to have a round-the-clock surveillance on who enters the state. The surveillance has manifested greatly in the drastic reduction of the crime rate in the state.

Only recently, the General Officer Commanding (GOC) 6 Division of the Nigerian Army, Major General Jamil Sarham, described Akwa Ibom as the most peaceful state as well as the state with the lowest crime rate in the country. He attributed it to the investment the governor had made in security infrastructure and the peaceful co-existence of the people of Akwa Ibom.

Well, it was not this good before the governor was sworn-in as the fourth civilian governor of the state on May 29, 2015. It is on record that cult clashes and killings were so much that the state was seen as not being safe not just for Nigerians but foreigners, including staff of IOCs and investors, before Governor Udom came in. This, no doubt, affected the activities of the oil firms and service companies in the state and the morale of investors who the current government has now attracted.

A 2009 report by the Nigerian Police revealed that Akwa Ibom State recorded 177 murders, most of which were classified as politically motivated. In the same year, there were 62 attempted murders, one manslaughter, eight suicides, 21 attempted suicides, 320 assaults, 18 child stealing, 93 rape cases and indecent assaults, 29 kidnappings, and many others, the report said.

Governor Udom’s commitment to kicking out insecurity entirely from the state was again expressed in March 2020 when he signed into law the Cultism and Other Violent Behaviour (Prohibition) Order, 2020 for the state. Sixty five cult groups have been proscribed by this new law.

Restating his administration’s commitment to maintaining the state’s record in safety, security and investor-friendliness, the governor said the new law was expanded to cover components not covered in the previous law.

 

A new MoU with IOCs

Last year, the state government unveiled a new Memorandum of Understanding (MoU) template for multinational oil companies and service companies operating in the state. This move, the state commissioner for Environment and Petroleum Resources, Ekong Sampson, said, was geared towards engaging the host communities and their needs and to ensure the oil companies have a harmonious atmosphere to operate.

The state government found out that there was the need to look at gaps that had strained relationships between the oil companies and service firms on the one hand, and host communities on the other, in order to close such gaps. He emphasised that for good turnovers to be recorded, the oil companies and their services counterparts needed a peaceful environment through a harmonious working relationship with host communities and the state government in their operations.

The commissioner reiterated that peace remained a key concern to the Udom-led state government at all times.

“Regular engagement and bringing stakeholders to a roundtable are critical to building and sustaining a healthy relationship among players in the industry. As we live in a tense moment in the country, we need a standardised MoU which should address all issues of equity for all,” he stated.

This move expresses the deep understanding the state government has of the need to provide the right environment not just for the oil companies but other investors in the state to operate, which has since enhanced the operations of the companies and attracted more investors to the state.

This harmonious relationship is not limited to IOCs and service companies; firms exploring gas in the state have also benefited from the governor’s foresight. This has greatly enabled the state to key into the federal government’s gas drive. The Minister for State, Petroleum Resources, Timipre Sylva, had early in the year said the federal government declared 2020 Nigeria’s year of gas. The federal government said the drive would create more opportunities for all Nigerians and help reduce reliance on petrol.

What this means is that the state government’s provision of the right and conducive environment for investors and gas companies is driving the gas narrative, opening a new trajectory and helping Nigeria meet its gas target. Thus, governor Udom is not just developing Akwa Ibom State but contributing greatly to the development of Nigeria.

 

Providing a masterpiece for IOCs

While the call for multinational oil companies to relocate their headquarters to the Niger Delta has been on for a while now, at no time is it more pertinent than now. Akwa Ibom is a foremost oil producing state in Nigeria and has contributed to the development of the country. Also the multinational companies have made a lot of fortune and continue to do so from Akwa Ibom, while the state, where they are headquartered, reaps from them. It is only right that they relocate to Akwa Ibom where they get the bulk of their revenue.

Another reason they need to relocate to Akwa Ibom is the massive base infrastructure the state government has put in place: security, good road network and clear understanding of the host communities, among many others.

Interestingly, the Udom-led government has just completed a 21-storey edifice, christened Smart Complex, which it started about two years ago. The building, the tallest in South-South Nigeria, is regarded as the most ICT compliant intelligence structure in the region. Located in the central business district of Uyo, the state capital, the complex is able to host any world-class company in the Nigeria oil and gas industry.

With the tower as high as 108.8 meters, the 21-storey business complex occupies a construction area of 18,639.50 meters square on a massive site area of 48,200.00 meters square, making room for a 500-capacity car park: this is a masterpiece the IOCs and other corporate organisations cannot but wish to occupy.

Indeed, Governor Udom has not just created the right atmosphere for small businesses to prosper, attracted investors, with keen eyes on Foreign Direct Investment (FDI), supported security agencies to do their jobs maximally, provided adequate security for lives and property, surprised Akwa Ibom people with massive road networks but has created the base infrastructure for oil companies and service concerns to thrive, created a harmonious environment and fostered a great relationship with them. And the time to appreciate the sacrifices for the harmonious relationship is now.

All these are geared towards placing Akwa Ibom in its rightful place in Nigeria as the number one investment destination; a state of a hardworking governor and an eternally grateful and happy people.

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