Will the intervention of the Nigerian National Petroleum Corporation (NNPC) Managing Director, Mele Kolo Kyari, save the over 2, 500 men and women who earn their livelihood in the disputed Kidney Island in Rivers State? CHINAKA OKORO examines the issues
Christmas was bleak and 2021 was already looking bleak for the over 2,500 men and women who earn their living from working on or around Kidney Island, the logistics and operational base inside Shell Petroleum Development Company’s (SPDC’s) OML 11.
On December 23, 2020, the Rivers State government sealed off the island, making good its threat to enforce its rights of ownership over Kidney Island following its reported purchase of OML 11 as well as contiguous assets and facilities.
A bit of context here: The Ogoni and by extension the larger Ejama-Ebubu community which plays host to OML 11 filed a suit against SPDC over an oil spill and pollution believed to have occurred towards the end of the civil war. While SPDC has never denied that there was a spill it has not accepted responsibility.
The case was snarled in the courts for decades and eventually made its way up to the Supreme Court which summarily dismissed SPDC’s appeal of a 2010 Federal High Court of Nigeria judgment which awarded a claim of N34 billion against SPDC.
Following that 2017 Supreme Court judgement delivered by Justice B. Akaahs, which the community considered a legal victory, they sought the court’s leave to enforce the judgment by taking over SPDC’s assets in Nigeria and abroad.
SPDC wasted no time in filing another appeal at the Supreme Court in which it prayed the apex court to set aside its earlier judgement because according to the company, the Supreme Court did not fully consider the merits of their appeal before upholding the decision of the appeal court.
In a unanimous decision delivered by Justice Samuel Oseji, the Supreme Court averred that SPDC’s appeal was “frivolous and lacked merit” and thereafter dismissed the suit declaring that it could not revisit or set aside its earlier decision.
By this time the judgement claim against SPDC had ballooned. A Federal High Court which sat in Abuja on Monday, March 2, 2020, issued an order attaching the sum of N182billion in First Bank of Nigeria Limited’s statutory account with the Central Bank of Nigeria in favour of Ejama-Ebubu community in Rivers State.
Governor Nyesom Wike, empowered by this order, stated in September 2019 that the Rivers State government had bought over SPDC’s 45% equity in OML 11 to safeguard the interest of the Rivers people. The Rivers state government said it had put in “a bid of $150m supported by a bank guarantee and cash payment to the Deputy Sheriff in the sum of N1bn, the latter payable to the judgment creditors while the former is escrowed.”
SPDC had reacted to this development with an August 14, 2020 press release in which it expressed “disappointment” that the Rivers State High Court had affirmed the enforcement of the sale of SPDC’s assets in Kidney Island and specified interests in OML 11, to the Rivers State Government.
While SPDC was still pursuing further legal recourse, the Rivers state government sealed off the island on December 23, 2020, thus putting in jeopardy not just the jobs of over 2,500 direct and indirect employees, contract agreements between SPDC and indigenous contractors but the drilling programme and work plans of companies like Moni Pulo, Conoil, Oriental Energy, Amni and Century Energy Services who require access to Kidney Island to facilitate their operations.
Addressing reporters on Wednesday, December 23, 2020, Professor Zaccheus Adangor, SAN, the Attorney General and Commissioner for Justice of Rivers state, informed them that the government was enforcing “her interest in the acquisition of 45 per cent equity stake in Oil Mining Lease (OML) 11 and Kidney Island in Port Harcourt. Kidney Island, he noted, now belongs to the Rivers State Government pursuant to a certificate of purchase registered in the Lands Registry as No. 6 at page 6 in Vol. 46, Port Harcourt. The certificate of purchase was issued by the order of the High Court of Rivers State on July 23, 2019, and September 25, 2019, following the purchase of the facility.”
A report put the daily losses at $5m even as SPDC described the government’s action as “premature.”
But the affected parties received an early New Year’s present when the Rivers State government announced via a December 31, 2020 statement that Governor Nyesom Wike “had directed the unsealing of the Island following a meeting with Mallam Melo Kolo Kyari, the GMD of NNPC.”
Providing further insight, a newspaper reported that “Governor Nyesom Wike has reopened Kidney Island, the Shell Petroleum Development Company (SPDC) operational base sealed and taken over in Port Harcourt by the Rivers State Government since 23rd of December 2020. A statement by Kelvin Ebiri, Media Assistant to the Governor, noted that “Wike, after a meeting with Group Managing Director (GMD) of the Nigerian National Petroleum Corporation, NNPC, Mele Kolo Kyari in Port Harcourt Thursday, directed immediate reopening of Kidney Island for the operators (Shell). “Kyari commended Governor Wike and the Government of Rivers State for their cooperation, while further discussion to resolve the underlying issues continues.”
Mallam Mele Kolo Kyari’s intervention was a much-needed pouring of oil on trouble waters and should help the contending parties draw a new road map for the future of not just OML 11 but Kidney Island.
Thousands of jobs are at risk, and company income is in peril and there is the added fear of foreign companies giving Nigeria a wide berth following the negative backlash that could ensue.
With the NNPC involved and legal options all but exhausted the parties must now sit around the negotiating table and the first order of business must be how to keep Kidney Island as a going concern while the parties study the Joint Operating Agreement governing the OML 11 JV?
What rights will 45% equity confer on the Rivers state government and if it is affirmed the new owners, how does the new state of affairs impact on other JV partners and the assets?
These are critical considerations because Kidney Island goes beyond SPDC and the Rivers state government. There are other interested parties and Mallam Kyari’s intervention has opened another vista of opportunity for negotiations.
