After five decades of operating an obsolete Petroleum law, President Muhammadu Buhari, has signed into law, the Petroleum Industry Bill (PIB), reports the Guardian newspaper.
The Petroleum Industry Act provides legal, governance, regulatory and fiscal framework for the Nigerian petroleum industry, development of host communities, and related matters.
By assenting, the President possibly aligned with positions of the National Assembly, which proposed a 30 per cent revenue allocation for the development of frontier inland basins that are mainly in the North, 3 percent of operating expenses to host communities, a 10 per cent management fee and other issues on Production Sharing Contract (PSC) as well as Joint Venture obligations.
The new law will help harness Nigeria’s potential to achieve its programme of raising oil production to 4mb/d and oil reserves to 40 billion barrels, while also drawing on the country’s vast natural gas reserves to provide clean and efficient energy.
The 20 year-wait for the Petroleum Industry Act is seen to have cost the country an estimated $200 billion in lost revenues.
Managing partner, The Chancery Associates Solicitors, Emeka Okwuosa, said it was regrettable that the bill was assented to without taking on board the apprehension of host communities as well as the huge allocation to frontier inland basins.
However, the Edwin Clark-led Pan Niger Delta Forum (PANDEF) has condemned the signing into law of the PIB. National Publicity Secretary of PANDEF, Ken Robinson, in a statement yesterday, condemned the development, describing it as unfortunate.
“It is unfortunate that President Buhari went ahead to assent to the PIB despite overwhelming outcry and condemnation that greeted its passage by the National Assembly, especially with regards to the paltry three per cent provision for the Host Communities Development Trust Fund and the brazen appropriation of an outrageous 30 per cent of NNPC Ltd profit for a dubious, nebulous Frontier Oil Exploration Fund.”
“This PIB falls way short of the expectations of the Oil and Gas Producing Communities that bear the brunt of unconscionable industry operations. This assent, by President Buhari, simply speaks to the repugnant attitude of disregard, propelled by arrogance, disdain and contempt with which issues concerning the Niger Delta region are treated, particularly, by the present administration,” he added.
It will be recalled that as a result of rising insecurity and rapidly declining oil production in the Niger Delta, former President Umaru Musa Yar’Adua entered into an Amnesty Deal with Niger Delta militants, led by the Movement for the Emancipation of the Niger Delta (MEND).
In that pact, late president had offered to cede 10 per cent of the equity which the Federal Government held in each of international oil companies (IOCs) to host communities, thereby making the communities joint venture partners in the oil industry in Nigeria.
Consequently, the former president had caused a redraft of the Petroleum Industry Bill, which had been in process since 2003, to accommodate the 10% equity stake, for presentation to the National Assembly.
Curiously, what the 9th National Assembly put forward for presidential assent, and to which President Muhammadu Buhari granted assent, offers the host communities 3% of operating expenses of the sector.
However, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, stepped in to calm frayed host community nerves, maintaining that the 3% per approved under the new Petroleum Industry Act could be bigger than what the Niger Delta Development Commission (NDDC) currently gets.
Speaking when he appeared on Arise Television, THISDAY’s broadcast arm, Kyari noted that given about $16 billion total expenditure by the oil and gas sector last year, host oil communities could earn as much as $500 million yearly if the trend continues.
The new law mandates the payment of three per cent of oil companies’ operating expenses in the previous year to the host oil communities, which are mostly in the Niger Delta.