- Lawan, Sylva: Legislation’ll boost Nigeria’s fortunes
The host communities (HOSTCOM) producing oil and gas in Nigeria, yesterday, rejected the 2.5 per cent equity shareholding provided in the Petroleum Industry Bill (PIB), being considered for passage by the National Assembly.
The host communities, which voiced its rejection of the 2.5 per cent provision at the opening session of a twoday public hearing by the Senate on the reviewed PIB, insisted that they would not accept anything less than 10 per cent equity shareholding in the law.
The public hearing was organised by the Senate Joint Committee on Petroleum (Downstream, Upstream and Gas Resources).
This was as the President of the Senate, Dr. Ahmad Lawan, and the Minister of State for Petroleum Resources, Timipre Sylva, expressed optimism that the passage of the bill would boost socio-economic fortunes of the host communities and Nigeria in general.
Presenting the position of HOSTCOM at the public hearing, the National President of the group, Benjamin Style Tams, said: “As it concerns the Host Communities of Nigeria Producing Oil and Gas in Chapter 3, the host communities stand on 10 per cent equity shareholding.
“After 60 years of marginalization and bearing the brunt of the negative impacts of exploration and exploitation, today, some states have started discovering and enjoying their natural resources. But the producing states and HOSTCOM are not envious of them therefore our position is sacrosanct.”
The host communities said that it would be economically very illogical to deprive the producing communities of the right to equity shareholding in both the establishment of NNPC Limited, the Commission, the Authority and the Boards. They warned that the attempt to take over complete control of all national assets by what they described as the “unpatriotic few” should stop.
The group further posited that the gas flare penalty funds captured in the proposed law should be given to the host communities because they are the ones directly suffering the consequences of gas flaring in their areas.
“In the case of the gas flare penalty funds, the host communities who are the direct recipient of the negative effects are the ones to receive the gas flare penalty,” he said.
Meanwhile, the Oil Producers Trade Section (OPTS), in its presentation at the hearing, observed that PIB did not address key challenges facing gas sector development in Nigeria.
Chairman of OPTS, Mr. Mike Sangster, who expressed the concerns of the body, said: “If the PIB is passed in its current form, it will not meet government’s objectives of making Nigeria the leading destination for oil and gas investment and the recent scarcity of investment – only $3 billion out of $70 billion in Africa – will continue.
“Nigeria faces ever increasing competition for investment and, despite having the largest reserves, only $3 billion out of the $70 billion committed in Africa for projects sanctioned between 2015 and 2019 were attributed to Nigeria, representing a meagre four per cent.”
According to him, “this lack of competitiveness is caused in part by the high cost of doing business in Nigeria, with overall project costs and operations costs being 69 per cent and 42 per cent higher than the global average respectively.
“A PIB, which safeguards existing projects and introduces competitive terms, is required to fully utilise the country’s resources for the benefit of all Nigerians,” Sangster stated.
The PIB, he said, also made provision for commercialisation of the Nigerian National Petroleum Corporation (NNPC), to bring about improved business efficiency among other laudable initiatives.
Speaking at the event, President of Senate, Lawan, said that the National Assembly, in its consideration of the bill, would ensure that the bill, when passed into law, guaranteed improved revenue earnings for the country
. Lawan said: “Let me say this, we (National Assembly), will pass this bill not without ensuring that it is a bill that satisfies certain conditions. Nigeria is blessed with these resources; we want Nigeria to benefit optimally from them. In fact, we are in a hurry because we have lost so many years of benefits that we could have had.”
He, however, noted that the non-passage of the PIB had been a major drag on the industry over the years, significantly limiting its ability to attract both local and foreign capital at a time when many other countries are scrambling to exploit their oil and gas resources.
“The mere knowledge that the nation’s oil industry is still being governed by laws enacted more than 50 years ago is ludicrous and extremely disappointing.
As legislators, we will strive to deliver a Bill that will enhance the growth of our oil and gas industry, modernize our fiscal system and enhance competitiveness, while creating harmony for all stakeholders. This is a promise we have made and that we shall achieve.
“Nigeria must have an oil and gas industry that benefits its people. Equally, our oil and gas industry must be competitive. We must create a sustainable investment climate where business in the sector will flourish,” he said.
Meanwhile, Sylva, in his submission, said that the passage of the PIB would assist host communities in petroleum operation areas to achieve their aspirations.
While calling for expeditious passage of the bill, Sylva said that the host communities would benefit immensely, noting that the objectives of the bill included promotion of economic growth through increased oil and gas production.
Other objectives, according to the minister, were to stimulate economic growth through investment in midstream gas infrastructure and to institute a strong regulatory framework with increased emphasis on midstream development.
In his comments, the Group Managing Director of NNPC, Mele Kyari, noted that the passage of the bill would make the economy more competitive compared to where it was 20 years ago.