PIB: Oil producers, host communities pick holes in provisions

Host communities and oil producers have faulted some provisions in the Petroleum  Industry Bill, which is being considered by the Joint Committee of the Senate.

The Joint Committees coordinating the public hearing include Committees on Petroleum Downstream, Upstream and Gas.

Meanwhile, the President of the Senate, Ahmad Lawan , who declared the session open, assured of the speedy passage of the bill, precisely in April this year.

First to kick against some provisions of the bill were oil producers who in submissions made by their Chairman, Mike Sangster, faulted Hydrocarbon Tax introduced in the bill
in addition to the already existing Company Income Tax.

The oil producers also faulted the bill for allegedly not preserving the terms of existing investments.

They said: “Oil Producers Trade Section recognises the government’s right to change laws.

“However to maintain Nigeria’s reputation amongst investors, it is important for the PIB to explicitly preserve base businesses and rights for existing Joint Venture Licenses and leases and Production Sharing Contracts, which form the basis for future growth.

“Operators should be allowed to retain the entirety of their lease areas and new terms should apply only to new contracts, licenses and leases.”

This, they added, will give investors the opportunity to consider the new terms prior to making investment decisions.

“We hope that this long – standing will be upheld in the PIB,” they stressed.

OPTS however welcomed the bill if required amendments are effected in some of its provisions.

It said the bill will provide the required competitiveness in the oil sector, which will save the country billions of dollars being lost to high cost of doing business.

According to it, only $3 billion out of $70 billion committed for projects between 2015 and 2019 was attributed to Nigeria, representing a meagre 4 per cent despite the country having the largest hydrocarbon reserves in Africa.

The issue of percentage for host communities from oil companies pegged at 2.5 per cent in the new bill, was vehemently kicked against by representatives of the host communities.

Specifically in his presentation, the National President of the Host Communities, High Chief Benjamin Style Tams, said the 10 per cent offered in bill considered during the 7th Assembly, should be retained, if the required cooperation between host communities and operational oil firms is to be achieved.

Tams said: “This issue of host communities entitlements from oil firms operating in their domains is very important but seems not to be taken seriously in the new bill and even the one before it.

“Imagine a provision that was put at 10 per cent during the 7th Assembly, reduced to 5 per cent during the 8th Assembly and now further reduced to 2.5 per cent in the new bill for consideration and approval by the present 9th Assembly.

“This, to us, is unacceptable.

“The earlier proposal of 10 per cent should be replaced with the 2.5 per cent.”

The bill was however strongly recommended for expeditious consideration and passage by the National Assembly by both the Minister of State for Petroleum, Timipre Sylva, and Group Managing Director of the Nigerian National Petroleum Corporation, Mele Kyari.

In his submission, Kyari said: “Passing the PIB will make our environment more competitive, compared to where we were 20 years ago.

“It will make us more competitive.

“The PIB will make us come to reality as a country.

“That reality is to take advantage of the bill that will enable us develop the oil industry.

“We haven’t seen significant development in the industry for the past 30 years.

“Nigeria may still be a resource dependent country in the coming years without PIB.

“So passing the PIB will make us to be more competitive globally.

“It will develop our gas reserve and help the local industry to develop and more people will have jobs.”