OIL AND GAS 1.2D OWNERSHIP; STATE VERSUS FEDERAL
STRUGGLE BETWEEN FEDERAL AND STATE FOR CONTROL OF OFFSHORE RESOURCES.
Despite various laws and constitutional provisions declaring federal jurisdiction and ownership over natural resources[1], littoral[2] states within a nation still lay claims to offshore oil.
In the US, the following cases have reaffirmed federal jurisdiction over offshore natural resources: Continental Shell Offshore Newfoundland (Canada as opposed to Newfoundland could exploit offshore oil), Re: Offshore Minerals Rights of British Columbia, and the case of United State V California. However, since the U.S. congress wanted to do a little justice to the littoral states, the Submerged Lands Act was passed in 1953. The Act entitled the littoral states to oil and gas found within 3 nautical miles of their boundary lines.
In Nigeria although the FG is vested with exclusive ownership over petroleum, the littoral states assert their title. In their doing this, they cite Section 1 of Offshore Oil Revenue (Registration of Grants) Act which provides that registration of Oil Mining Licences for offshore areas shall be done in the littoral state. They also cite Section 162(2) of the 1999 Constitution which entitles gas producing states to not less than 13% of the oil and gas revenue accruing to the federation account.
In AG Federation V AG Abia and others, various Nigerian States (relying on Section 4 of the Allocation of Revenue (Federation Account) Act) alleged that their territory extended offshore as far as continental shelf. The Supreme Court held that coastal states (under the Act and various international instruments like the UNCLOS) were “nation-states” rather than internal states of a country and held that such offshore areas belonged to the FG to the extent permitted by international law.
The federal government, in a bid to do justice enacted the Offshore/Onshore Dichotomy Abolition Act in 2004 which entitles the littoral states to derivation interests in offshore resources located within 200 meters water depth from their lines.
[1] We have noted these above.
[2] States that are close to/facing the shore
