The Managing Director and Chief Executive Officer of the Niger Delta Development Commission (NDDC), Dr Samuel Ogbuku, has highlighted additional factors responsible for the ongoing divestment of International Oil Companies (IOCs) from onshore operations in Nigeria.
Speaking at the NDDC Law and Development Summit held in Port Harcourt, themed “The Role of Law in Driving Sustainable Development in the Niger Delta Region,” Ogbuku said pipeline vandalism is not the sole reason oil multinationals are relocating their operations offshore or exiting parts of the Niger Delta.
He explained that another major concern for these companies is the significant financial burden arising from court-ordered compensation payments to host communities, which in some cases adds to operational losses.
According to him, many of the oil firms believe they are under pressure from multiple obligations, including taxation and legal settlements, which affect their profitability and long-term investment decisions.
Ogbuku emphasised the importance of law in maintaining order in society, noting that governance systems are built on legal frameworks that prevent a return to disorder and instability.
He referenced classical social contract theories, explaining that different philosophical foundations of law influence modern democratic systems and governance structures across countries.
The NDDC boss also noted that legal variations across jurisdictions, including state-level amendments, can sometimes influence how laws impact development and investment decisions in different regions.
He stated that the divestment of IOCs is also linked to court judgments that require heavy compensation payouts, which, combined with other financial obligations, make onshore operations less attractive for some companies.
Ogbuku further expressed concern over the impact of divestment on employment, noting that local workers are often affected when international firms sell off assets or restructure operations.
He cited recent industry transitions, including acquisitions involving local operators, where workforce reductions have occurred due to operational adjustments.
He stressed the need to balance national interests with corporate sustainability, adding that laws must protect all stakeholders while also supporting economic development.
According to him, discussions on law and development are essential for agencies like the NDDC, as legal frameworks play a critical role in ensuring discipline, security, and sustainable growth in the Niger Delta region.
