IMPLICATION OF LAGOS BECOMING AN OIL PRODUCING STATE

COMMENTARY ON IMPLICATION OF LAGOS BECOMING AN OIL PRODUCING STATE

Known in local parlance as Eko city, Lagos carries on its shoulder a huge respect not only as Nigeria’s economic hub and a former capital of the country, but also one of the fastest emerging mega cities in the World.

Now, with the discovery of crude oil in the state, Lagos  is again on the verge of joining the league of oil producing states, which many feel will mean too much money for the state that is reputed as being buoyant enough that it can survive without allocation from the federal government.

However, for a state that has a perennial battle with filth and considering how crude oil production has left the Niger Delta region in South South Nigeria as among most polluted places on earth, the discovery of oil in Lagos is nothing of cheer to all residents.

A cross section of Lagos residents expresses mixed feelings over Lagos joining the list of oil producing states.

The Lagos crude oil deposit is said to be at Aje, an offshore field located in Oil Mining Lease 113 in the western part of Nigeria, in the Dahomey Basin.

The field is situated in water depths ranging from 100 to 1,000 meters about 24 km from the coast.

The implication of this is that, based on the country’s arrangement, the returns to the nation is low since royalty payment to host nations by oil companies decreases with depth of oil drilling.

The argument on this is that the environmental pollution to the people is said to reduce offshore unlike if the oil drilling is carried out on land.

But, analysts say considering community agitation leading to the blowing up of oil and gas pipelines and illegal crude oil refining, which are common in oil producing areas; Lagos will not totally be free from pollution due to oil production.

Oil and Gas consultants said the proper engagement of host communities, through sustainable incentives, beyond the consulting of only their traditional rulers and other prominent people there, should be adopted , to avoid restiveness that may escalate environmental pollution.

The Petroleum Industry Bill, PIB, if signed into law is also seen as a potent vessel to manage environmental pollution,not only in Lagos , but also everywhere that oil is mined in the country.

The PIB establishes what is called “the Petroleum Host Community Fund” at 10% of the net profit of the oil companies, as well as the imposition of the Nigerian Hydrocarbon Tax, two major funds that would be used to manage environmental pollution and of course develop the oil producing communities.

To the Director of Communications, NEITI, Dr. Orji Ogbonnaya-Orji ,ensuring that oil companies pay the right taxes and levies and that  government manages the proceeds well, which NEITI is committed to, would leave the country enough revenue to put its house in order, including sustaining the environment.

Analyst also caution that in exploiting oil in Lagos, government should avoid the mistake it made in the Niger Delta region, when oil revenue which should be invested for future use, was spent.

The country’s Officer,  Natural Resource Governance Institute, Dr. Dauda Garuba said when the oil revenue is invested and used to develop other sectors of the economy,the future of the nation including its environment would be preserved.

Lastly,respondents said government should at all times closely monitor activities of oil companies and ensure that policies related to the environment are not violated.