By ADEBAYO OBAJEMU
The much expected dream of passing the Petroleum Industry Bill (PIB) into law, which had languished in the National Assembly for 15 years, may still face further delay, this time from the host communities who are divided over the percentage of the equity holding in the oil firms allotted to them. It can to the fore recently when the committee held a public hearing on the bill to gather stakeholders’ inputs for the final draft of the bill.
The Senate Joint Committee on Petroleum Upstream, Downstream and Gas had concluded its Public hearing on the bill on penultimate Tuesday, after which its counterpart in the House of Representatives organised a separate hearing for the bill. The current version of the bill, it could be recalled was read for the first time at the Senate on September 30 and for the second time on October 20 , 2020.
But the host communities have rejected and vowed to fight the 2.5 percent equity shareholding for them, vowing to fight, as they wonder why oil majors should have more control of the oil than the host communities. The bill in question, among other things, seeks to scrap the Nigerian National Petroleum Corporation (NNPC) and the Petroleum Product Pricing Regulatory Agency (PPPRA).
The controversial bill also attempts to create Nigerian National Petroleum Company Limited – after all the asset and liabilities of the NNPC have been identified by the ministers of petroleum resources and finance.
In addition, it also aims at establishing the Nigerian Upstream Regulatory Commission and the Nigerian Midstream and Downstream Petroleum Regulatory Authority.
Parts of the bill read, “The Minister (of Petroleum) and the Minister of Finance shall determine the assets, interests and liabilities of NNPC to be transferred to NNPC Limited or its subsidiaries and upon the identification, the minister shall cause such assets, interests and liabilities to be transferred to NNPC Limited,” the newspaper quoted parts of the bill.
“Assets, interests and liabilities of NNPC not transferred to NNPC Limited or its subsidiary under subsection 1 of this section shall remain the assets, interests and liabilities of NNPC until they become extinguished or transferred to the government. Such assets include, the NNPC Towers.
But the real contention is the 2.5 percent stake, which have drawn the ire of host communities, and have vowed to fight the implementation of the bill. We could recall that in the past the bill had suffered setbacks in past sessions of the National Assembly for several reasons.
Initially, it was passed by the Eighth Assembly in 2018, but President Buhari rejected it on grounds of lack of fiscal content. The president also riled against the bill as passed, saying it would limit the powers of the petroleum minister.
The demand for 10 per cent equity shareholding was almost like an mantra mouthed by every person or group that represented the oil-producing communities at the hearing. They grumbled and complained that previous assemblies had put the equity shareholding for host communities at 10 per cent Operating Expenditure but the percentage plunged every time the bill was considered again.
It was against this background that they vehemently put pressure on the National Assembly to settle for 10 per cent. As the heat and pressure was on to convince the assembly to reason with the host communities on 10 percent demand, the Minister of Petroleum, Timipre Sylva, said he believed the proposed 2.5 per cent is fair.
Another demand from the communities was a proposition that the host communities should be the beneficiaries of gas flare penalty funds. This, they said, is because these communities are the direct victims of gas flaring.
The groups also asked that all appointments to the proposed National Petroleum Company should have representatives of the six geopolitical zones and that the Company be provided with benchmarks and targets to attain. Women were not left out as they took turns to make their recommendations to the panel – most of which bordered on lack of gender representation in the bill.
Women in Energy Oil and Gas asked that all the pronouns depicting masculinity like ‘he’, him’ and ‘his’ should be changed to ‘they’, ‘them’ and ‘their’. They also asked that the name of the bill be changed from PIB to Energy Industrial Bill because “the world is transiting from gas to energy.” The group also asked that more women be appointed into boards of major oil companies like the NNPC.
The Public hearing at the Senate was seamless, but same could not be said at the House of Representatives, especially after representatives of some host communities turned the committee room into a wrestling ring over some disagreement.
The tussle began when the chairman of the committee, Mohammed Monguno, invited the host communities of Nigeria producing oil and gas (HOSTCOM) to make their presentation at the public hearing. The committee had earlier announced that only a harmonised presentation from the host communities would be aired.
And when leaders of the host communities could not agree and choose a representative from among themselves, the fight broke out disrupting the session.
Ahmed Lawan, Senate president said recently that the National Assembly’s determination to pass the bill was high, saying the determination was driven by the need to “overhaul a system that has refused to operate optimally in line with global standards, resulting in loss of continental competitiveness, transparency, accountability, good governance and economic loss for the petroleum industry and the country.”
He also promised that the bill will be passed by April. On his part, the Speaker of the House of Representatives, Femi Gbajabiamila, assured that the lawmakers will protect Nigeria’s interest and ensure quick passage. Although the PIB has been in the National Assembly for decades without much success, the ninth Assembly would ensure that it passes it into law, he said.
But the host communities have vowed to fight on until the needful is done. In a chat with BusinessHallmark, an Energy consultant and expert, Professor Anthony Oriade of the University of Ibadan told this newspaper that “the 10 percent equity shareholding being canvassed by the host communities is in order. Given the fact that they have suffered years of environmental degradation and gas flaring, the host communities should be given the percentage demanded, the proposed 2.5 percent equity shareholding is too small. ”
However, the factional leader of the Host Communities of Nigeria Producing Oil and Gas (HOSTCOM), Dr. Mike Emuh, said the people of the Niger Delta misconstrued the 2.5 percent equity proposed for the host communities in the Petroleum Industry Bill (PIB) 2020.
He argued that the proposed 2.5 equity for the host communities was the best thing to happen to Niger Deltans as a people in the region. According to him, the percentage will be calculated based on oil production per each flow station in a community, insisting that it is a welcome idea that receives his support.
For instance, Emuh gave his community, Olomoru in Delta State as an example where he said it has 15 flow stations, and imagined the amount of funds that will accrued for the development of the area. In a chat with newsmen last week, he said: “The 2.5 percent will be the best thing to happen us. Our people don’t understand the proposition in that proposed bill. If they do, they won’t oppose it for now.”
Emuh, however, said though he wasn’t against the clamour for 10 percent equity as being agitated by some stakeholders in the region, his positions stemmed from the fact of other benefits coming to the region.
“On the PIB, we are saying 10 per cent equity was the executive bill that was signed by late President Yar’Adua, but if it is 1.5 percent, we will take it for now rather than scrapping other intervention by the federal government for the development of the region,” he said.
The HOSTCOM national chairman described those agitating for the scrapping of the Niger Delta Development Commission (NDDC) as the enemy of the region.
“Why would they want NDDC to be scrapped? Is it because of the 1.5 percent equity for the development of the host communities? No. Those agitating for that are the enemies of the region,” Emuh
The Hearing witnessed other similar groups who criticised aspects of the bill and also suggested possible amendments.