Why SNEPCO Supply Base Must Remain in Niger Delta

SNEPCo workers kick against planned relocation from Port Harcourt

The Niger Delta region for many years was a centre for violence, communal clashes and militancy. It took a negotiated and sustained intervention for the government to purchase relative peace in the region. Until the now taken-for-granted relative peace, the region was characterised by youth restiveness, militancy and constant inter- and intra- communal clashes. Serenity was scarce and cordial business-host community relationship was scarce. Oil revenue dwindled due to the constant attacks on oil installations. The impact of these events was felt by the multinationals, the nation and the international community at large. Since then, the government had come to realise the importance of concerted efforts at sustaining peace and stability in the region. It is widely acknowledged that youth restiveness is a major hindrance to peace and progress anywhere, and especially in the Niger Delta region. Youth restiveness is a direct consequence of high unemployment and non-engagement. This has been the lot of the highly endowed Niger-Delta region. The people are divinely blessed with unquantifiable natural resources, especially the major one for Nigeria, crude oil that has sustained the country for decades. Yet they are subjected to a paradoxical level of penury. In the midst of abundant natural resources are a people living in abject poverty – highly fuelled by the greed and corruption of the leaders both at the state and national levels. There are no jobs for the teeming youths; the few jobs available are claimed by a minute population through a survival of the fittest struggle.

However, few companies and facilities domiciled in the region have managed to employ the youths and sustain the peace. Some of such facilities are the Onne Port and the Onne Oil and Gas Free Trade Zone – the largest in the world. Onne Port is perhaps the only functional port in the eastern region. The other ports including Calabar, Warri and Port Harcourt are all in a near-comatose state. Onne Port has remained alive and proved that public private partnership is a veritable means to manage Nigeria’s port system. The Free Trade Zone, on the other hand, has become a destination of choice for multinationals operating in the Niger Delta region. And the patronage of these companies has improved the capacity to provide employment for the teeming youths of the region. In essence, it is an interwoven cycle that benefits all parties – the companies, communities and government. In the same vein, it is a relationship that can be highly consequential by one party’s disconnection or disaffection. Hence, the eyebrows the decision by Shell Nigeria Exploration and Production Company (SNEPCo) to relocate its supply base out of the zone has raised.

A statement by some concerned employees of SNEPCo was recently circulated in the media informing the public of an impending decision of the company to relocate from the Onne Oil and Gas Export Free Zone in Rivers State to a new base in Lagos. In a swift reaction, the spokesperson for SNEPCO, Bamidele Odugbesan, denied the alleged relocation.

“The base will continue to be utilised by the Shell Petroleum Development Company of Nigeria Limited (SPDC), operator of the SPDC Joint Venture for SPDC Joint Venture operations. SNEPCO’s operations are in the Bonga Field 120 kilometers off Nigerian coast in the Gulf of Guinea and our operations staff and contractors work offshore in Bonga,” he said. However, he also conceded that “SNEPCo, which has been making use of SPDC’s logistics supply base operated in Onne, is trying to develop its own alternative supply base in Lagos. SNEPCo is not planning to relocate any of its operations from anywhere to Lagos.” The feeble reaction from the company has been unsuccessful in dousing the brewing tension the news has elicited. The decision has already generated disaffection amongst the youths of the region towards the company. In a peaceful protest, youths under the umbrella of Onne Youth Council (OYC), expressed their grievances and total condemnation of the move, urging the company to rescind its alleged plan. The youths also revealed that the planned relocation could lead to the loss of more than 5,000 direct and indirect jobs. The Paramount Ruler of Onne Community, John Dennis Osaronu, has also joined in the call for SNEPCO to reconsider the decision to relocate its supply base to Lagos because of the consequences on the people, the community and the entire Niger Delta region.

There are many perspectives to examining the plan to relocate. It can be examined from a strictly economic perspective – impending job loss and impact on the Onne Free Trade Zone –  and it can also be viewed from the security perspective – implications for peace and stability in the region. Whichever perspective analysts choose, it is undeniable that executing the alleged plan has wide implications for the Onne Oil and Gas Free Trade Zone, the Onne Community, River State, Niger Delta region and the country at large. There is a truism that organizations are corporate citizens and should be treated so. It is therefore important for the company to consider other stakeholders outside its internal system in arriving at a decision such as this due to its wide-ranging impacts. Whilst the underpinning motive for the alleged decision may have some business advantages for the company either in the immediate or long term, its overall consequence on Onne Free Trade Zone and the entire region should attract equal consideration.

More so, as a foremost oil and gas company in Nigeria that has operated in Onne for more than 20 years, the planned relocation may also serve as impetus for other companies in the Zone to follow suit. And when this is encouraged the eventual consequence is a drastic drop in business activities in Onne. This does not only affect the country in terms of revenue loss, it will also lead to job loss and increase in unemployment in an already volatile region. As a case study for other Niger Delta communities, Onne is practically built on the going concern of the companies in the area, especially the Onne Free Trade Zone. This suggests that any challenge faced by Onne Free Trade Zone will directly impact the employment of youths in the community. And the issue has the potential of escalating from a community issue to a regional concern within the shortest possible time.

The government clearly cannot afford a huge population of idle youths at this point in an already volatile region. It is too much of a risk to ignore. It also sends a negative signal that Shell and its subsidiary SNEPCO may not really be interested in ameliorating the plights of people in the Niger Delta region; rather it portrays the company as one willing to suck the region without committing to its people. Issues like this reinforce the perception in some quarters that the government and the multinationals do not really care about the Niger Delta region, a position that was pushed forward by the Ijaw People’s Development Initiative earlier in the year. More so this alleged decision is coming at a time when Niger Deltans are demanding for multinationals to relocate their headquarters to the region. Whereas that call was amplified by the Vice President, Prof. Yemi Osibanjo during one of his visits to the region, it has now become a major demand by the leaders of the region. However, this latest alleged decision is potentially capable of injecting a negative dimension to the relatively peaceful atmosphere of unending discussions for stability.

Ultimately, whilst it is difficult for external powers to determine how a company is run, it is only appropriate that Shell pays attention to the responses that have greeted this decision and act accordingly. Observers have been left in disbelief on what could have informed the alleged decision considering that Onne is considered as one of the best managed ports in Nigeria and the Onne Free Trade Zone, which is the largest in the world, has continue to surpass expectations. More so, the Onne people have been friendly and receptive to companies operating in their community in an exemplary manner.

So far, the government has been silent on the matter. The role of the government is important at this point to understand the issues and provide useful perspectives to SNEPCO. The contribution of SNEPCO to Onne through the Free Trade Zone is enormous and cannot be wished away. Without companies like SNEPCO, the Onne Oil and Gas Free Trade Zone would not have been able to employ the number of youths it has on its payroll. At this point it is advisable to let sleeping dogs lie and not create unnecessary tension in the Niger Delta region. The government has worked assiduously to ensure that relative peace is sustained in the Niger Delta. And in fairness to both the Federal and State governments, there has been a considerable absence of violence and militancy in the region. Nigeria has consistently met its daily oil production target due to this relative peace. There is no need therefore to trigger unnecessary disaffection amongst the people for a decision that has no expediency to it. Besides, SNEPCO will do better having all its property and equipment, including turbines, engine spares close to its operations.