From Oghogho Obayuwana, Abuja

This, it said, is the only way to bring redemption to victims of environmental degradation.

The above were contained in the CFA's report on the All Party Parliamentary Group (APPG) delegation's evaluation of the Niger Delta.

The huge national loss, the report said, is occasioned by the organised pilfering from the massive pipeline system and high sea deals of between 100,000 barrels to 200,000 barrels through bunkering.

The report also asked the government to commission an environmental impact assessment to look at the physical and environmental impacts of flaring of all forms in the Niger Delta communities from Bayelsa to Rivers, Edo, Delta, Abia, Akwa Ibom and Ondo states.

According to the report, the Niger Delta region is the bedrock of Nigeria's crude oil production; Bayelsa, Delta and River States alone account for 75 per cent of oil production and over 50 per cent of gross government revenue. This heavy dependence on crude oil has exposed the economy to the boom-and-bust cycles of development and a concomitant unstable revenue profile. But the level of development recorded in Nigeria in view of many, is not commensurate with the huge earnings from crude oil exports.

The report highlighted the fact that since 1958, over $350 billion has been earned by Nigeria from this valuable resource. The Nigerian economy itself is driven by oil production, with oil accounting for 95 per cent of the country's exports and over 80 per cent of government revenue. The allocation of oil income is included within a Memorandum of Understanding (MoU) between the oil companies and the Nigerian government.

According to a supportive Shell Petroleum Development Company (SPDC) document, $4 per barrel is attributed to technical costs, a maximum of $1.87 per barrel provides the industry margin, and the remainder goes to the government in equity and taxes. On these figures, at a price of $30 per barrel, the government would take $24.13 or 80 per cent of the total; at a price of $50 per barrel, the government would take $44.13 or 88 per cent of the total. However, a lack of transparency means it is impossible to be certain how much the Nigerian government actually receives and where the money is spent.

And this was a major concern of the APPG in its voluminous report stemming from its delegation's assessment visit to the Niger Delta late last year. It also quoted substantially the 13th January edition of the Economist entitled: "Oil alone doesn't make you happy", the British Broadcasting Corporation (BBC) online of September 21, 2005 as well as Basil Omiyi's (SPDC Managing Director) overview of the SPDC operations presented to the APPG on the Niger Delta in August 2005.

It said: "It is clear for this level of oil theft to continue at its current rate, that it is highly organised. Many Nigerians believe that senior political and military personnel are involved, as well as neighbouring countries. It has been suggested to us that the tankers, which collect and transfer the crude oil are able to do so with impunity and are free to trade in international markets. We heard complaints that no serious attempt has been made by the Nigerian government to prevent this oil theft being transferred from land to sea. The organised criminal nature of this illegal activity means it cannot be accepted or excused.

"The lead role in stopping bunkering must be taken by the Federal Government of Nigeria... According to the SPDC, government action including practical verifiable steps on both social and environmental issues... it is impossible to be certain how much the Nigerian government actually receives and where the money is spent," it added.

Making a submission on multiple pollution and environmental degradation, the report said: "It is right that companies are criticised for the continuous flaring of gas over many decades. In that context, SPDC's 'Flares Out' programme is to be welcomed even if it is a belated response. However, the Nigerian government also has a responsibility to impose appropriate environmental standards and to ensure they are met... We recognise the major investment required to collect and put to economic use the gas previously flared from 73 Shell flow stations and we welcome the decision by SPDC not to develop any new oil fields without a clear plan for the utilisation of the associated gas from oil production".

It continued: "In the eyes of many local people, the principal impact of the oil industry has been on their own environment. The pollution of land and rivers tends to increase with oil production leading to a loss of resources and thus income-earning opportunities for the population."

On the work of the Nigerian Liquefied Natural Gas (LNG) project commissioned since 1999 to provide, among others, a solution to gas flaring. It observed: "Unfortunately, major construction work is required to enable this to happen and the indications from SPDC are that this construction work will not be completed till 2009, when they expect to cover 95 per cent of all associated gas produced."