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Their Wealth of Woes: How Universal Energy exploits Unyenge community, violates guidelines

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By Tony Esin

Universal Energy Resources Limited (UERL) a marginal field operator of OML 14  has been drilling crude oil at full commercial capacity in Unyenge, a littoral community in Mbo Local Government Area of Akwa Ibom State from 2012 after it commenced preliminary operations in 2005.

According to the company’s profile information on the Corporate Affairs Commission (CAC) portal accessed by this reporter, the company with Registration Number 429120 incorporated on September 26, 2001 with share capital of N500,000,000 (five hundred million Naira), operates as private company limited by shares.

In the CAC portal, zero (0) is written under the caption “Persons with Significant Control”, meaning that the company has not made public its beneficial owners as required by the law.

Major road from Unyenge community leading to the operation UERL operation camps (Photo credit: Tony Esin)
Major road from Unyenge community leading to the operation UERL operation camps (Photo credit: Tony Esin)

However, under the caption “Officers”, five persons are named as principal officers of the company. They are: Mrs Nkoyo Etuk (Director), appointed on January 23, 2020; Ogunmekan Funmilola (Director), also appointed on January 23, 2020; Wibrew Roger (Director), appointed on June 21, 2021; Umorok Ekong Etesin (Company Secretary), with no date of appointment indicated; and Akodu Olabisi, also with no date of appointment.

After over 16 years of its oil exploration in Unyenge, investigation reveals a violation of terms and conditions of the General Memorandum of Understanding (GMOU) signed with the host community, complacency in beneficial ownership disclosure requirement, lack of environment risks management mechanism, and failure to meet corporate social responsibilities. These have translated into underdevelopment of the area and poor condition of living for members of the host community.

Residents of the community live in deplorable conditions. They lack basic social amenities such as access roads to the community, market, water supply and modern schools.  While there is no electricity in Unyenge community for residents, the UERL company provides a constant power supply within its premises for use by its staff.

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According to the residents, the community has been without electricity for five years.

Most houses in the community are shabby mud houses with the roofs badly damaged due to gas flaring by UERL. The few brick houses have badly rusted roofs, including those even recently built.

The state of many of the houses in the community is in dissonance with their status as an oil-producing community.
Rusted roof of recently built bungalow in Unyenge (Photo credit: Tony Esin)
Rusted roof of recently built bungalow in Unyenge (Photo credit: Tony Esin)

“When you look at our community, it does not even deserve or look like a community where they are drilling oil in terms of infrastructure. This has brought problems several times between the youths and the company, but it doesn’t still help us. Our market is very poor. These people are very wicked. We don’t have electricity for more than five years now. There is no road…”  says the Secretary of Unyenge Youth Council, Saviour Peter, in an interview with this reporter.

Corroborating these claims, the Village Head of Udung Eyo Unyenge, Ovong Effiong John Atteh,  adds that, “We have no basic amenities. Our people fetch water from the stream, no pipe-borne water. If you see our road, small vehicles cannot have access except the SUVs used by staff of Universal Energy. Whenever we ask that they construct the road, they tell us it is the government that owns the road and not the company. They would tell us they don’t drill oil in large quantities to meet commercial value. That is what they keep telling us whenever we ask for assistance. Our youths have not been employed as stipulated in the MoU.”

Village Head of Udung Eyo Unyenge, His Highness, Ovong Effiong John Atteh
Village Head of Udung Eyo Unyenge, His Highness, Ovong Effiong John Atteh

In 2019, youths of the community staged a protest which grounded the activities of the company for over 48 hours. The youths who blocked the road leading to the company’s sites cited maltreatment and neglect of the people of the community and the entire Mbo since they started the exploration of oil in the area as their grievance.

    Breach of GMoU

There is a subsisting General Memorandum of Understanding (GMoU) guiding the operation of the company. The MoU currently in use seen by the reporter was renewed in 2020 after the expiration of the previous MoU. It is provided that the MoU subsist for five years from the date of its execution by the parties and must be subject to review three months before its expiration period.

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In order to ensure effectiveness, there is an MoU Implementation Committee (MIC) with membership drawn from UERL management; Akwa Ibom State government represented by the Ministry of Petroleum Resources in the state; host community; Mbo Local Government Area; Catchment area of Ntak Inyang; Esit Eket Local Government Area and Oro nation’s representative.

Rusted roofs dot the landscape in Unyenge (Photo credit: Tony Esin)

In the MoU, UERL agreed to fund sustainable development projects and programmes in the host community with N60,000,000 (sixty million Naira) annually. This has not been implemented as findings revealed that the company pays N30, 000,000 (thirty million Naira) to the community instead, while also overseeing how it is expended.

This is what has been used to execute the few projects in the community.

Prior to the MoU renewal in 2020, the community members said they were getting N20,000,000

From findings, four borehole projects are sited in the community in different locations. All of which are not functioning.

One of the abandoned borehole water projects in Unyenge community (photo credit :Tony Esin)
One of the abandoned borehole water projects in Unyenge community (photo credit :Tony Esin)

Also, the community’s secondary school has a three-bedroom staff quarter built from the proceeds of the community’s fund. But the insignia on the building shows it was built and inaugurated by the UERL.

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NEITI’S REPORT

Nigeria Extractive Industries Transparency Initiative (NEITI) Oil and Gas Industry Audits report showed that UERL executed a total of 123 projects in the host communities. But findings show those projects have not been established in Unyenge as the only available projects were funded through the yearly payment of N30,000,000 to the community.

The Chairman of the Community’s Council of Chiefs, Ovong Xavier Ekpe challenged the company to point to any project it provided or funded in any part of the community.

Data Charts released by Policy Alert, an NGO based in Akwa Ibom State
Data Charts released by Policy Alert, an NGO based in Akwa Ibom State

Gas flaring at UERL operation camps

The UERL has three operation camps in Unyenge community. When this reporter visited one of the three operation camps of the company located in the creek, about 4km from the residential area, gas was being flared massively at different points within the facility. Gas flares, experts say, kill crops, pollute water and adversely affect human health.

Stern-looking millitary men bearing arms and other security men recruited from the host community wearing uniforms would not let any visitor get near the camp’s gate. One of the security men directed this reporter to visit the first camp and request to see the Community Liaison Officer (CLO) for any discussion.

On alighting at the entrance of the first camp, the CLO, an indigene of the community, immediately attacked the reporter, threatening to seize his phones and other gadgets if he attempted to record anything within the vicinity.

On further enquiry to see who was in charge of the Camp, the CLO grudgingly retorted, ‘if you need any information, just go to our Uyo office. If you come here to try that thing we will teach you a lesson”.

The company has an office in Uyo, the state capital.

 Heavily armed military personnel on guard at entrance of UERL camp located at the creeks of Unyenge (Photo credit: Tony Esin)
Heavily armed military personnel on guard at entrance of UERL camp located at the creeks of Unyenge (Photo credit: Tony Esin)

Gas flaring is the burning or disposing of waste gases through the use of combustion. This is done by burning the separated gas in massive flares as waste into the air. Gas flaring that occurs close to farmlands and dwelling homes such as the one from UERL has attendant adverse consequences.

A Federal High Court in Nigeria ruled in 2005 that flaring of gas by oil companies is an offence and should stop. The judgment was made in a case filed by the Iwherekan community against Shell Petroleum Development Company, Nigerian National Petroleum Corporation and Nigeria’s Attorney General. The court held that gas flaring was unconstitutional as it violated people’s right to life and dignity. Despite the subsisting court ruling, oil companies in Niger Delta have continued with the practice unabated.

Notably too, at the last United Nations (UN) Climate Change Conference (COP26) in Glasgow, President Muhammadu Buhari said Nigeria would reduce its carbon emissions to net zero by 2060. The country must therefore curtail its gas flaring practice. Meanwhile, Nigeria’s Senate in 2018 considered a bill which proposed stiffer sanctions for any person or corporate entity involved in gas flaring in Nigeria from January 1, 2021.

The Gas Flaring (Prohibition and Punishment) Bill, 2020, which scaled second reading during plenary, was sponsored by  Albert Bassey Akpan the senator from Akwa-Ibom North East.

Clause 11(a) of the bill stated that “Any person who flares gas after December 31, 2020 contrary to section 4 of this Act, commits an offence under this Act, and shall be liable on conviction to pay a fine which shall not be less than the cost of gas at the international market.”

Unfortunately, the bill was not heard of after it went through that level of legislation and was referred to the Senate Committee on Gas for further legislative input by the President of the Senate, Ahmad Lawan.

Government receive remittance without developing host community

In 2020, UERL contributed $1,792 million, representing 0.01683% of the total revenue paid to the government within the year, according to the just-released report by the NEITI.

Also, the agency’s reports of preceding years showed humongous amounts paid to the government, both state and federal, from 2015 to 2019. But ironically, the government has provided barely any basic amenities for the community to ease the life of citizens and residents.

In March this year, the government of Akwa Ibom State approved the award of a contract for the construction of 13.6km Orukim-Unyenghe-Universal Energy Road to Ibom Deep Seaport site with two bridges in the Mbo Local Government Area of the state.

The Commissioner for Information and Strategy, Ini Ememobong told  newsmen shortly after the state executive council meeting, which was held at the Exco Chambers of the Governor’s office, Uyo. However, four months after the said project was announced, there has been no sign of commencement of work on the project.

When asked about their knowledge of the road project, members of the community said they had only heard of it in the news, while adding that the state government had not sent any delegation or its officials to brief them about the specifications of the project and to intimate them about the contractor to which the project was awarded. They were not privy to any contract document regarding the road project.

Aside from the state and federal governments, other government agencies get remittances annually from the UERL as it is the case with other oil and gas companies operating in the region.

The Niger Delta Development Commission (NDDC) is one such agency. The NDDC, an interventionist agency established to enhance the development of the Niger Delta region has not completed any project in the oil-bearing community of Unyenge. There is an abandoned classroom block project at the Community Secondary School initiated and abandoned by the NDDC since 2005, according to the villagers.

Abandoned sclassroom block project at Community Secondary School, Uyenge, initiated and by the NDDC since 2005 (photo credit: Tony Esin)
Abandoned classroom block project at Community Secondary School, Unyenge, initiated and by the NDDC  (photo credit: Tony Esin)

Non-compliance with beneficial ownership disclosure

While Savana Energy owns 51 per cent of UERL shares, the host community only knows UERL, which is the company that they entered into an MOU.

The community said they are unaware of the company’s divestment of shares after the commencement of operation. A check on NEITI’s website indicates that Savanah owns 51% of the total shares of the asset.

The community, speaking through the Chairman, Council of Chiefs, Ovong Xavier Ekpe, said, “That name, Savanah, we just heard about that, let’s say, just a year ago. But we know about Universal Energy. That is because we have not seen any group of people visiting us here to say they are from Savanah.  I don’t know if they are trying to hide it from us. But I know along the line, we will still know. We as the community, we don’t go into the details about their management and ownership.”

Chairman, Unyenge Council of Chiefs, Ovong Xavier Ekpe during an interview in his palace
Chairman, Unyenge Council of Chiefs, Ovong Xavier Ekpe during an interview in his palace

In NEITI’S 2020 audit report, only 32 companies provided all the information required in the BO disclosure templates, 11 companies did not provide any information on beneficial ownership and 26 did not provide complete information, most especially the owners (natural persons) of the companies.

Most of the companies that submitted Beneficial Ownership (BO) information provided the required attestation by a senior management officer or senior legal counsel of the company as to the validity of the information provided. The UERL was listed among the companies that did not provide necessary information on Beneficial Ownership.

Universal Energy, government, evade interview

Multiple visits to the UERL office in the state capital did not yield positive results as the security men always claim the management staff are unavailable. This happened five consecutive times.

UERL Office at NAIC House, Plot 9 Bank Layout, off Udo Udoma Avenue, Uyo (photo credit: Tony Esin)
UERL Office at NAIC House, Plot 9 Bank Layout, off Udo Udoma Avenue, Uyo (photo credit: Tony Esin)

However, after several more attempts, the reporter spoke with the company’s Head of the Legal Department, Ekong Umorok. He had obliged to grant an interview, but when critical issues were raised about the company’s operations and the worrisome situation in the host community, he refused to comment and said the Manager in charge of Community Relations should be contacted to provide answers to the questions.

After several futile attempts, this reporter met with the Community Relations Manager, Arit Etim, at the company’s headquarters in Uyo. Although Etim was receptive and listened to all the questions, she still did not respond. She asked for a letter to be written and addressed to the Manager in charge of projects. This was done.

After a month, the UERL sent staff to Comfort FM office to verify if the reporter was one of its staff members. Thereafter,  he was given a mobile number to call and schedule an appointment.  Unfortunately, the contact turned out to be that of the Head, Legal Department Umorok, who hitherto refused to grant an interview.

Ministry of Power and Petroleum Development, Akwa Ibom State (Photo credit: Tony Esin)
Ministry of Power and Petroleum Development, Akwa Ibom State (Photo credit: Tony Esin)

This time again, he answered his calls but declined to be interviewed on the issue. He instead ended the call after he heard the purpose.

Also, efforts to get the state’s commissioner for the Ministry of Power and Petroleum Development, John James Etim, to speak on the issue failed. After frequent visits to his office without any meaningful result, this reporter got his contact and called for an appointment, but he settled for a phone interview.

The commissioner had earlier responded to a phone call where he asked for the interview questions to be sent to him via SMS before initiating a call. But after the questions were sent as requested, Etim stopped picking up subsequent calls.

This investigation is supported by Policy Alert with funding from Open Society Initiative for West Africa (OSIWA)

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