NLNG Act amendment: when ignorance becomes the order of the ‘House’

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In his determined commitment towards expanding the frontiers of public knowledge in the energy, oil and gas sectors of the national economy, seasoned journalist, Yemie Adeoye.


“Beware of false Knowledge; it is more dangerous than ignorance”- George Bernard Shaw, 1856-1950


IT is no longer news that the Nigerian lower parliament, popularly referred to as the Federal House of Representatives have passed a bill to amend the Nigerian Liquefied Natural Gas, NLNG, Act also known as the Fiscal Incentives, Guarantees and Assurances Act.


What is news however is the flagrant display of ignorance by this supposed august body of lawmakers and their decision to take this frightfully unpopular decision for the primary and sole purpose of increasing the finances and taxes accruable to the Niger Delta Development Commission, an Agency of government saddled with the responsibility of developing the oil rich Niger-Delta region both in infrastructure and human capital.


While this move by the House of representative may seem patriotic on the surface, a deeper and careful study of the development reveals otherwise.

The NDDC which the lawmakers pretentiously claim to be concerned about was established also by an Act of parliament just like the NLNG and is by no means in want or need as it already receives the following benefits.


The equivalent of 10 per cent of the total monthly statutory allocations due to member states of the Commission from the Federation Account; 50 per cent of the 13 percent of the revenue accruing to the Federation account under subsection (2) of section 162 of the Constitution of the Federal Republic of Nigeria 1999, deductible at source.


The NDDC also receives by virtue of the Act establishing it 0.5 per cent of the total annual budget of any oil producing company operating, on shore, in the Niger-Delta area; 50 per cent of monies due to member States of the Commission from the Ecological Fund; such monies as may from time to time, be granted or lent to or deposited with the Commission by the Federal or a State Government, any other body or institution whether local or foreign. Now several industry watchers have continued ask a fundamental question which the lawmakers apparently never considered. “With all these monies mentioned above accruing to the NDDC, how come the Niger Delta is still in such a sorry state and an eye sore when it comes to infrastructural and environmental development? Is it the controversial 3 percent tax deductions from the NLNG that is expected to transform the Niger Delta region? NLNG is jointly owned by NNPC, Shell, Eni, and Total and these companies already pay dues to the NDDC as required by law, how can the NLNG an offshoot of these companies be taxed for the same NDDC without resorting to double taxation which is morally unjust and ethically lopsided? All these are simple questions begging for answers.


However, The NLNG remains the best thing to happen to the Nigerian gas industry haven reduced gas flaring activities in Nigeria from 65% at inception to below 20% today, while growing the Nigerian LNG business to the envy of the world with the largest LNG fleet in the whole of Africa.


This latest move by the Federal House of Representatives to rewrite the law which was crafted by far more cerebral Nigerians at the time is very worrisome because of the danger it portends for Foreign Direct Investments into the country. Prospective investors are certainly observing this anomaly and the question on the lips of these ones is simply, how are we sure any agreement with us and our investment would be respected in view of this flagrant disregard for an agreed procedure backed up by law?

Without the shadow of a doubt, the Nigerian Liquefied Natural Gas, NLNG, is the best example of a successful public/private partnership in the Nigeria. The company has existed since its almost three decade lifespan without a single financial scandal of any sort, unlike other federal government agencies and parastatals.


The company is the only PPP in the country to sign on to the United Nations Global Compact (UNGC), the world’s largest voluntary corporate responsibility initiative with business and non-business participants from 160 countries across the globe just in an effort to remain financially transparent with professional and incorruptible workforce.

The NLNG has contributed and continue to contribute immensely to the Nigerian economy. It has since inception continued to pay applicable taxes, levies and charges to local, state and federal tiers of Government amounting to well over $5.5 billion.  This is aside about $15 billion already paid in dividends to the Federal Government through the NNPC. In addition, the company operates a robust corporate social responsibility programme, considered a model by the rest of the oil and gas industry.

The programme has cost about 200 million US dollars to date and extends to areas including business and human capacity development and infrastructure development in our primary areas of operation and across Nigeria. It is instructive that NLNG was operating a Nigeria scholarship scheme even before it exported its first cargo in 1999/2000.

More recently, the company has spent 12 million US dollars to donate engineering laboratories and equipment to 6 universities across Nigeria’s geo-political zones, to support science and technology teaching and research.

In addition, NLNG currently supplies 40% of the nation’s cooking gas (LPG) while also providing scholarships to Internally Displaced Persons (IDPs) in the North-East of the country. The NLNG has reduced gas flaring in Nigeria from 65% at inception to below 20% today. Now, the big question begging for an answer is who tampers with such an organisation, who really does that?

At the recently concluded offshore technology conference here in Houston, Texas, the minister of state for petroleum resources Dr. Emmanuel Ibe Kachikwu who has been wooing investors alongside the Governor of Bayelsa state, Seriake Dickson stated in support of the NLNG that it is a no brainer for anyone to conceptualise what the House of Reps has embarked upon with regards to the NLNG Act.


As far as the technocrat is concerned you don’t change a winning team. You don’t even tamper with its formation. NLNG has an Act of the national assembly backing up its establishment, and that must be respected if we don’t want to appear ridiculous in the eyes of the world.


As a Nigerian citizen, I’ve often wondered why members of the National Assembly, especially the House of Representatives are hardly ever respected by Nigerians.

Whenever they speak or act one gets a sense of lack of seriousness or a frightful disconnect from the people they represent or the realities of the present day.


According to Jerry Ugoeli, an independent research analyst here in Texas, “When they speak you are never motivated or encouraged. There is nothing on record that has been said by these folks that can be quoted either today or in the future. When they speak they neither incite nor excite.


When they engage in fisticuffs it is never for the sake of the masses. Their major concern has always been issues of personal interest. Sadly however, these folks are so empowered by the constitution that no major development can be achieved in the country without them but do they even realize this fact? And does it move them at all?” He queries.

It is high time the lawmakers rise up to their job in the most professional manner rather than placing politics and personal gains above common sense.

The least expected of this supposed august body is to get schooled on realities in the oil and gas industry both globally and locally, this they could achieve by engaging either consultants or core industry stakeholders professionals in a bipartisan manner in the interest of the truth, common sense and the country.

Yemie ADEOYE a journalist, industry analyst and host of the Energie Platform show writes from Houston Texas.


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