Opinion: Sorry Lagos, you don’t have oil

note: The discovery of oil in Lagos
has sent shockwave of excitement through
the people in the state and the south west
region.
This was considered a way the country
would be relieved off the burden of the
overdependence of the Niger Delta oil.
In this article by Ade Damola, he points out
that although some quantity of oil was
found, it wasn’t enough to celebrate the
state as a major oil producing state.
Oil in Lagos
Since the news about first oil in Aje field,
offshore Lagos have reached the wires, not
a few Lagosians have openly rejoiced in
their new status as an oil producing state.
Forget that tripe about becoming a non-oil
economy, most people I know want some
oil to be found in their backyard. Credit
goes to the Lagos government who has
moved swiftly, earning early the rights to
rents from Aje field from the Revenue
Mobilisation and Fiscal Commission. But
here is some good and bad news. Much oil
and gas has been found and more would be
found in the nearest future but Lagos would
never benefit from it. Sadly.
I will tell you why.
Before February 2004, the onshore-
offshore dichotomy and the 13% derivation
principle were the basis for sharing oil
wealth in Nigeria amongst the states and
federal government. The onshore offshore
dichotomy model was derived from the
Exclusive Economic Zone Decree (1978)
while Sani Abacha’s (yes, the much
maligned Sani Abacha) 1995 constitutional
conference prescribed and adopted the
13% derivation. With the onshore-offshore
dichotomy, littoral states only earned their
derivation entitlements from oil revenues
found onshore and within their coastal
baseline. When democracy returned, the
governments of the Niger Delta states
started agitating for the abolition of the
onshore-offshore dichotomy and
demanded access to resources offshore of
their states.
Mr. Akinwunmi Ambode (right), receiving a
sample of the Crude Oil discovered in the
State by the Group Managing Director,
Tunde Folawiyo Petroleum Company
Limited, Mr. Tunde Folawiyo Photo: Lagos
State government
In the United Nations Convention on the
Law of the Sea (UNCLOS) which Nigeria has
ratified and abides with (the USA is not a
signatory yet, but that’s for another day) the
following maritime zones are recognised:

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approves 4 for the state
(i) the 12 nautical mile (22 km) Territorial
Sea (TS)
(ii) the additional 24 nautical mile (67 km)
Contiguous Zone CZ (according to Article 33
of UNCLOS) making 36 nautical miles
beyond the baseline;
(iii) the 200 nautical mile (370km) Exclusive
Economic Zone EEZ from the baseline
[according to Article 57 of UNCLOS]; this
makes the territorial sea AND the
Contiguous Zone PART of the EEZ, with an
additional 176 nautical miles beyond the
Contiguous Zone;
(iv) 350 nautical miles (650km) of the EEZ — 
(Extended EEZ)
The argument before February 2004 was
whether the littoral states’ claims to
environmental pollution and impact from
oil fields far away and several kilometres
into the exclusive economic zone were
valid. The states wanted derivation to be
based on all oil found within the 200
nautical miles EEZ (370 km) and this
naturally drew a battle line between them
and non-oil producing states. (Note that this
states/federal government fight for
revenue is popular amongst many oil
producing countries — USA, Brazil, Libya
etc.) The Obasanjo government in
accommodating a solution settled on the
onshore/offshore abrogation bill of
February 2004 (backdated to April 2002)
which describes the limit of the littoral
states as the 200 metre water depth
isobath contiguous to a State of the
Federation.
Where the problem lies
Now that’s where the real problem lies.

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Instead of using the 200 nautical miles (370
km) Exclusive Economic Zone EEZ as
anticipated, the bill cleverly recommended
a limit of ‘200 metre water depth isobath’.
It was a masterstroke by Obasanjo, the
Federalist. Now, what does an isobath
mean? An Isobath is a line representing the
horizontal contour of the sea bed at a given
depth.

Essentially a 200 metres Isobath,
means a line representing the horizontal
contour of the sea bed at 200 metres
depth. In other words the 200 metres
Isobath off the Nigerian Coast is a line
joining all points off the coast of Nigeria
(from Lagos to the boundary with
Cameroon) where the sea is 200 metres
deep. Are you getting the gist? So instead
of a limit of 200 nautical
miles distance from the shore, the states’
limit is 200 meter isobath depth from the
shore. This has very serious consequences.
For states whose sea bed plunges sharply
into the sea, the 200m water depth
isobaths would be closer to shore while
states with gently sloping sea beds would
have a farther derivation belt. Lagos, Ogun
and Ondo States’ sea bed are typically in the
former category while the likes of Bayelsa,
Rivers and Akwa Ibom are in the latter. I
consulted a 2004 paper by Professor Itse
Sagay in preparing this essay and in his
estimate, Lagos’ derivation belt could be
about 28km compared to Ondo’s of about
50km, Delta 60km, Bayelsa 70km, Rivers
70km, and Akwa Ibom 80km. Essentially,
Akwa Ibom has a derivation zone about
three times that of Lagos with the same
isobath rule. See the map below and you
know why Akwa-Ibom became the No1 oil
state. The oil fields (in green) are more
stretched along its deep sloping sea bed.
Akwa Ibom won the maritime lottery. (For
oil though because same issue is probably
why ports have draught issues in the Niger
Delta while Lagos attracts more Ports
investment.

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