News
THE GMoU MODEL: NPDC SUCCESS STORY

For any nation to grow and achieve its full socio-economic development, the need for peaceful co-existence and security cannot be overemphasized. As a matter of fact, no nation can attain a sustainable economic progress in the absence of security of lives and properties. This sentiment is even more cogent in Nigeria where decades of neglect of the oil producing region and its attendant environmental consequences have resulted in deep-seated acrimony and mutual distrust.

And every time there is a rift between the oil companies and the host communities, there is usually a huge loss of revenue both to the company and the Federal Government. This has become a major source of concern for the nation because crude oil remains the economic lifeblood of Nigeria, constituting eighty percent (80%) of the total revenue and ninety percent (90%) of her export earnings.

It was in view of this that the most beneficial Global Memorandum of Understanding (GMoU) model was adopted as part of the  resolutions reached at the end of the tripartite meeting between the Delta State Government, NPDC and representatives of the one hundred and twelve (112) communities  that make up  OML 30.

It would be recalled that the meeting was convened by His Excellency, The Deputy Governor of Delta State, Prof Amos .A. Utuama, (SAN) during the first quarter of 2013 due to the communities’ continued insistence on shutting down the OML 30 assets for well over fifty days. Thereafter, a GMoU Joint Committee was constituted between the Delta State Government, NPDC and OML 30 communities. To further ensure fairness and equity to all the parties, the Attorney General and Commissioner of Justice, Delta State, Mr. Charles Ajuyah (SAN), was mandated to mediate and reconcile all the parties.

At the inaugural meeting of the Joint Committee which was held on the 2nd of September, 2013 in Warri, Mr. Charles Ajuyah, (SAN) advised members to be transparent and sincere in order to reach the best beneficial resolution that would impact positively on both the NPDC and the host communities. 

Seventeen months later, the team came up with a single document - the OML 30 GMoU Agreement. The model is an agreement between the Delta State Government, NPDC and the twelve clusters that make up the 112 communities.  The 12 clusters were earlier grouped taking into cognizance the communities that host oil wells, flowstations, manifolds, pipelines and other oil and gas facilities.

The Committee also inaugurated a Community Development Board (CDB) which is one of the  decision making organs of the GMoU. It is a 43 member Board which is chaired by Hon. George Osikorobia. The CDB functions as the main supervisory and administrative body which interfaces with NPDC and also ensures the total implementation of projects. Each cluster CRC is made up of an executive arm and four members from each community.

The beauty of the model is that it gives the communities the opportunity to take their developmental needs into their own hands while NPDC on behalf of its joint venture partner will provide the necessary funds to guarantee the stage by stage implementation of the community development plans. This is indeed a departure from the former style where the entire process from the project selection to execution was controlled and domiciled in the hands of the company.

Furthermore, this new Corporate Social Responsibility approach is a robust all-inclusive plan that will create a platform for constructive engagement between the company and the entire stakeholders within its areas of operation.  It is a paradigm shift that places emphasis on transparency, accountability, community empowerment, capacity development, partnership as well as allows the communities to determine their own destiny.

Again, this new phenomenon in the oil and gas industry will promote the use of dialogue in resolving disputes. As the Chairman of the NPDC-GMoU and Manager External Relations Department, Mr. Ugo Atugbokoh puts it: “there are many intervention levels in the GMoU agreement. This is to ensure that disputes are resolved amicably through dialogue without disruption of our operations”. The GMoU will also create room for communities to earn more money by providing security for NPDC facilities. It is our hope that this gesture will curb pipeline vandalism, crude oil theft, oil spill and so many ills associated with damages of NPDC facilities.

In the last few years, NPDC’s influence in the Oil and Gas industry has grown remarkably. This is as a result of the divestment of Oil Mining Leases (OMLs) 26, 30, 34, 40 and 42 to the company. Speaking at a recent budget defense before the House of Representatives’ Joint Committee on Petroleum Resources (Upstream, Downstream and Gas Resources) the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke revealed that daily crude oil production capacity of the NPDC has increased from 130,000 barrels of oil per day (bopd) to 205,007 bopd.

She also said that the company has grown into a mid-size Exploration and Production (E&P) company, and a major gas supplier to Nigeria’s domestic market with over 600 million standard cubic feet of gas per day (MMSCFD) through its Oredo, Ughelli and Utorogu gas plants.

As the company continues to grow in leaps and bounds, it is daily confronted with the need to strategically cultivate its environment in a way that promotes development and encourages human capacity development. Therefore, the signing of the first GMoU between NPDC and OML 30 communities is a symbolic representation of the return of peace; yes a mutually beneficial relationship between NPDC and its host communities.

For instance, since the signing of the multi-lateral agreement, there has been significant improvement in relations between NPDC and its host communities and the company is satisfied that under this new environment, more progress will be achieved.

We salute the gallant and selfless efforts of the Delta State Government and the NPDC teams who despite the various challenges made sure that the agreement was extensively discussed and agreed upon by all stakeholders. We also salute His Excellency, The Deputy Governor of Delta State, Prof. Amos .A. Utuama (SAN) who acted as the bridge between NPDC and the communities. He saw to it that the communities also signed their own part of the agreement despite the initial challenges.

At the final signing ceremony which took place in Asaba, the capital of Delta State, Prof. Amos .A. Utuama (SAN) charged NPDC to ensure that the communities are carried along as partners in progress. He noted that this was important if the existing peace between both parties must be sustained.

“As a government, we are conscious that we can only achieve all that we set to achieve for our people in the promotion and wealth of our people when there is peace,” the Deputy Governor said.

He also advised NPDC to take note of certain terms that have been deliberately included in the document to benefit the host communities and ensure the peaceful co-existence between both parties, adding that those terms as spelt out in the GMoU should be honoured on time. He also admonished the communities to keep their part of the bargain; even as he noted that the Delta State Government which is also a stakeholder in the process will be at alert to ensure that the terms of the document are complied with.

Some of the major highlights of the GMoU include payment of an Annual Project fund; the communities will be made to identify and execute specific projects that meet their needs; a Peace Award of five percent of the project sum to clusters that record zero disruption of the company’s operations. It also stipulates penalties for stoppage of NPDC operations. It also defines the specific amounts to be paid for other forms of Public Relations to the communities.

The Managing Director of the NPDC, Mr. Anthony Muoneke was happy to see that several months of hardwork have finally yielded fruits. Mr. Muoneke, who led a team of NPDC Management staff to the ceremony, commended the Government and people of Delta State for their tireless efforts at ensuring peace and noted that the process was to compensate host communities, ensure peace and good working relationship with them and the whole State at large.

“This GMoU is going to be different because you are here and it is the intention of both parties to respect it. NPDC intends to keep its word, the host communities have indicated that they want to keep their words as you have seen the Delta State Government has put its weight on this GMoU so I am must assured that it will work,” Muoneke said.

By successfully signing and implementing the GMoU for the OML 30 communities, NPDC has demonstrated that it is not resting on its oars at getting the company to its rightful place in the Oil and Gas Sector of Nigeria.

Post Rating

Comments

There are currently no comments, be the first to post one.

Post Comment

Name (required)

Email (required)

Website

CAPTCHA image
Enter the code shown above: