Cautious optimism greeted the passage yesterday of the Petroleum Industry Bill (PIB) which is meant to overhaul the oil and gas by industry stakeholders.
While a good number of stakeholders welcomed the development, some have queried the rationale behind the 3% for Communities Trust Fund as against the 10 % demanded by oil producing communities and hoped that the exercise has not compounded community problems its meant to solve.
Eddy Wikina, former managing director of Treasure Energy Resources, and also a former external Relations manager, Shell Nigeria Exploration and Production, said although he has not seen the final version but hope the president will sign it into law.
“Good development but doesn’t eliminate all the issues and problems. There will still be agitation in the Niger Delta. Haven’t made this observation, how do we define host community? Will the 3% accrue to the family level, village community or LGA? And 3% of what? Value of production or declared profits? “
“How will communities staff the Trust Fund managers? Where do you see Ogoni benefits in the context of present situation of no operations? The centre of the warfare is just shifting from federal government to community stage, but perhaps, they can start with 3% and test t efficacy in addressing the Niger Delta problems.
Dan Kunle, a Business Consultant and an oil and gas analyst, described the passage as a big achievement. Even though is long overdue but is better than not to be passed at all.
“The Senate and House of Representative must be commended for making it happen. Now is for Mr President to sign off. I congratulate the entire Nigerians, as this PIB has so much economic implications for Nigeria. I hope the implementations of the Act s provisions will be meticulously complied with. We look forward to a new oil and gas industry landscape.”
While reacting to the development, the immediate past Director General of the Lagos Chamber of commerce and Industry, LCCI, Muda Yusuf, said the oil and gas industry is a major contributor to the Nigerian economy and government revenue and as such should be freed from political interference.
The Senate on Thursday passed the Petroleum Industry Bill (PIB) with the approval of 3% for host community trust fund as against five percent recommended by the Joint Committee of the National Assembly on Petroleum (Upstream and Downstream) and Gas in a report presented last week.
The percentage for the host community became contentious at plenary as the Senate reduced the percentage from five to three percent after a heated argument.
The Senate Leader, Senator Yahaya Abdullahi, thereafter moved a motion for the bill to be read the third time and it was seconded by Senate chamber. Minority Leader, Senator Enyinnaya Abaribe after a clause by clause approval by the upper legislative.
The Senate and House of Representative had been expected to vote clause by clause on the more than 400-page long report, but instead quickly approved the full package.
However each chamber made changes before approving the package, and the senate lowered the share of money for oil-producing communities. The chambers will need to meet again to work out the details, but members were optimistic that they would come to an agreement next week, after which it could go for presidential sign-off.
Analysts say its approval is essential to attracting a shrinking pool of capital for fossil fuel development.
Earlier in the day, senators entered a closed-door session with the petroleum minister and the head of state oil company NNPC for a briefing on the technical terms and details.
The last key controversies related to the share of wealth for communities in areas where petroleum is produced, and those in the northern and central parts of Nigeria where there is exploration but no production yet.
The house bill signed off on an increase in the share of regional oil wealth generated from production that host communities can claim from 2.5% to 5%, but the senate approved 3%. Communities had pushed for a 10% share.
Sources said disagreements with northern leaders were managed separately following several hours-long sessions between them and federal government officials early this week.
The package also includes a string of changes sought by oil majors, including amended royalties and fiscal terms for oil and gas production, and the transfer of state oil company NNPC’s assets and liabilities to a limited liability corporation created by the bill. It also divided the stakes in the new NNPC Limited evenly between the finance and petroleum ministries, but would not allow for public share sales without further government approval.
Leaders agreed earlier this year to sweeten the terms for oil companies in an effort to attract much-needed investment in an era of shrinking global cash for fossil fuel production.