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20 Jan

OIL AND GAS 2.6B DISPUTES (DIMENSIONS)

DIMENSIONS/LEVELS OF OIL AND GAS DISPUTES.

:: The International Level: occurs between states laying claims to ownership of offshore natural resources. Such disputes are resolved by international laws. Article 2 of the United Nations Convention on the Laws of the Sea and Article 1 of the Geneva Convention recognises the sovereignty of host States over their natural resources. This sovereignty can extend up to 12 nautical miles from baselines-Article 77 UNCLOS. An example of such international dispute can be seen in the dispute between Nigeria and Cameroun which occurred in respect of the oil rich Bakassi peninsular in the gulf of guinea. The matter was taken to the International Court of Justice (ICJ) for arbitration. The ICJ ordered both countries to cease hostilities and in October 2002, the ICJ ruled that the Peninsula belonged to Cameroon on the basis of a 1913 agreement, and ordered Nigerian forces to leave the area; however, they continued to occupy the region until the dispute was finally resolved in favour of Cameroon in 2006.

:: At the National Level (Dispute between the FG and the States): The constituent states have claimed that they own natural resources found within their shores rather than the FG. These claims were made by constituent states in Continental Shell Offshore Newfoundland[1] Re: Offshore Minerals Rights of British Columbia[2], United State V California[3], United States V Texas, United States V Maine[4], AG Federation V AG Abia and Others[5] and a host of other cases. In these cases, the claims of the constituent/littoral states failed and the federal right over the resources were upheld. Section 44(3) of the 1999 Constitution , Section 2 of the Petroleum Industry Bill (PIB), Section 1 Petroleum Act, Section 1 of the Minerals Act… all vest ownership of oil found in Nigeria and its continental shelf on the Federal Government[6]

:: Oil Company V Federal Government: This usually arises in relation to commercial rights and liabilities, expropriation, cash call obligation, and so on.

:: Individuals V Exploration Companies: such dispute can be by way of nuisance, negligence, the rule in Rylands V Fletcher and so on. Such litigations are usually struck out for failure to prove and lack of locus standi as we shall see in the discussion on environmental pollution.

:: Host Communities V The government and IOCs: Oil communities have been quite militant in demanding their rights[7]. E.g. the Niger Delta. The bulk of foreign currency derived from the exploration of oil in Delta State goes to the Federal Government while most of the villages lack electricity, education, health facilities, pipe-borne water and other infrastructures. These communities have maintained that they have a right to develop and be compensated for damage caused by oil exploration to their water, land and animals. The Niger Delta Development Commission (NDDC) was created to address the difficulties and sufferings of inhabitants of the Niger Delta and co-ordinate sustainable development of the Niger Delta. Also Section 116 and 118 of the Petroleum Industry Bill establishes the Petroleum Host Community Fund and entitles host communities to share in the net proceeds of oil derived from their community.

 

[1] [1984] S.C.R. 86.

[2] [1967] S.C.R. 792.

[3] 332 U.S 19 (1947)

[4] United States V Maine, 420 U.S. 515, 516-17 (1975).

[5] [2002] 6 NWLR Pt. 764 542

[6] Although the Offshore/Onshore Dichotomy Abolition Act 2004 was later passed to entitle the states to derivation interests in offshore resources located within 200 meters water depth.

[7] See Yinka Omoregbe, Oil and Gas Law in Nigeria.

Isochukwu

Quite eccentric really

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