The Force of the Community in the Niger Delta of Nigeria: Propositions for New Oil and Gas Legal and Contractual Arrangements

Abstract

The exploitation of oil and gas in the Niger Delta is considered the foremost source of
revenue of Nigeria, providing 20% of the Gross Domestic Product (GDP), 95% of foreign
exchange earnings, and about 65% of budgetary revenues. With the strategic position of this area
and the tensions between the Federal Government of Nigeria and multinational corporations
(MNCs), directly exploiting these resources on one hand, and the ethnic communities that these
resources are derived from on the other, there is a need to take various steps to de-escalate the
situation in this region. To minimize resource conflicts within the region, this Article canvasses for
the formulation of new tripartite oil and gas arrangements, both legal and contractual, that provide
oil-producing communities with stake-holding in oil and gas operations in the region. It further
examines some of the potential complexities that may arise if the MNCs directly negotiate
contracts with the communities without due involvement of the Federal Government of Nigeria as
the host state government.