As a two-month deadline nears in a Senate directive to the Nigeria Liquefied Natural Gas (NLNG) to pay N18.4 billion to host communities for the right of way (RoW) acquired 38 years ago, oil and gas experts are worried about its signal to investors.
They cautioned the National Assembly against constituting a threat to foreign direct investment (FDI) and the ease of doing business initiative of the government through its activities.
The Senate had in October, following a petition from the host communities in September 2022, ordered NLNG Limited to pay the sum for Right of Way (RoW) of land it acquired in 1989 for N73 million.
The petition stated that 73 host communities and 200 families were affected in Obiafu, Soku and Bonny in Rivers state.
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Speaking at the Platforms Africa Forum 2022 in Lagos at the weekend, experts cautioned the Senate over the directive, saying it lacked the power to issue it.
Partner, Bloomfield Law Practice, Dr Ayodele Oni, who spoke from Houston, US, and the keynote speaker, Barrister Jide Ologun, declared that the Senate’s power did not include giving order to a company to pay money within a stipulated time.
“The Senate is not a court. That right to order resides solely with the court,” Oni said.
On his part, Ologun said while the current National Assembly has performed well, it should not dent that image by giving directives to companies.
“The recent directive to NLNG to pay N18.4bn within eight weeks is not within the powers of the Senate.
“All lands belong to the government, and it was the government that gave them the land. In addition, it was confirmed that the NLNG paid N73 million in 1989.
“Any other thing the NLNG is doing will only amount to Corporate Social Responsibility (CSR),” he said.
The Senate resolutions were adopted after a report of its Committee on Ethics, Privileges and Public Petitions that investigated a petition by the communities.
The Committee chairman, Senator Patrick Akinyelure said following its incorporation, the NLNG acquired landed properties in Rivers state spanning over 210 kilometres and paid just N74.642 million compensation for its pipeline Right of Way. He noted that the sum was small and that it covered only 39 communities and 73 individuals and families and no pact signed between the communities and NLNG then.
He also stated evidence that other oil companies such as Shell, Total, Elf, etc paid similar commensurate compensation, adding that NLNG had not objected to the recent claims of the petitioners.
A few days after the Senate order, NLNG in a statement said it was evaluating it.
The statement issued by the General Manager, External Relations and Sustainable Development, Andy Odeh, said: “NLNG wishes to state that it has always conducted its business responsibly and in accordance with the laws of the Federal Republic of Nigeria, including in this specific matter.”
Interest in LNG started in the 1960s when the idea of monetising flared gas was planned. However, the NLNG was only incorporated as a Limited Liability Company on May 17, 1989, and production from its first operational train, Train 2, started in 1999 and the company’s first cargo was delivered on the 9th of October, 1999 to Montoir, France.
