100 Journal Of Nigerian Environmental Society (JNES), 2007, Vol.4 No.1 Page *Akujuru, V.A et. al.- Determining the Value Of An Oil/Gas… pages 100-112 Accepted 8 th June, 2006 DETERMINATING THE VALUE OF AN OIL/GAS BEARING LAND FOR COMPENSATION IN A DEREGULATED ECONOMY * Akujuru, Victor A. and **Baridoma, Moses B. Department of Estate Management, University of Science and Technology Nkpolu, Rivers State. ABSTRACT Compensation for valuation in the Niger Delta has evoked so much controversy that valuers now question the relevance of the methods adopted for determining such payments. While most compensation payments are determined by negotiations, such negotiations are hardly done professionally. Both the acquiring authorities and the land owners need to know the actual value of such land before agreeing to any compensation. This paper will define wetlands and seek to determine the value of crude oil and natural gas bearing land applying professional approaches to value determination ajier reviewing the relevant legal provisions for value determination. It will ascertain what the value of such land is in a free market or in a restricted market and attempt to describe how such values should be determined when seeking to establish the compensation payable. The paper asserts that there is no legal provisions for land acquisition for crude oil/natural gas purposes. Values for such acquisitions must be based on market considerations of what the land values are and not based on the use of predetermined compensation rates. It is only this basis that will allow the Estate surveyors and Valuer to exercise his professional judgement and be relevant. • INTRODUCTION Crude oil and natural gas are deposited underground and is being extracted in the onshore area (including sea, islands and marine and riverine areas extending up to a water depth of about 5 meters). The crude oil (oil) is obtained by exploration operations" all work carried out to find oil- bearing traps by various means such as geological, geophysical and geochemical. Furthermore, drilling of exploration wells, as well as other works carried out to determine whether a discovered petroleum trap has commercial value. Geologically, it is not always possible to distinguish crude oil bearing land from natural gas (gas) bearing land. Most geological wells drilled for oil end up as gas well and some contain both oil and gas. Hence land value for compensation cannot be designated separately, as oil or gas bearing land but a mixture of both, consequently the discourse on the development of Nigeria's wetlands, the Niger Delta region. Nigeria's economy is hardly capitalistic of socialistic. Some aspects of the economy are regulated while others are not. The international economy is becoming increasingly capitalistic with most aspects becoming deregulated. Some countries practice complete privatization of the whole economic system, others like Nigeria adopt a piecemeal approach. This is why the Nigerian Government talks of deregulated of the downstream sector of the oil industry while keeping the upstream sector completely regulated. If Nigeria is practical with its deregulation policy, then its implementation must be comprehensive. It therefore follows that, the Nation's reluctance to review the land Use Act prior to this time is a confirmation of the regulated nature of the upstream sector of the oil industry. It is in the hope of complete deregulation of the economy, that it has become imperative to examine the process of value determination of an oil/gas bearing land for compensation purpose, in Nigeria.