At long last, the Senate yesterday passed the much-awaited Petroleum Industry Bill (PIB), with 30 per cent of profits accruing from Oil and Gas operations by the Nigeria National Petroleum Corporation (NNPC) now to be set aside for exploration of oil in the frontier basins.
All exploration of frontier basins shall fall under the purview of the Upstream Regulatory Commission. Similarly, three per cent has been reserved for the development of host communities.
However, the Senate reached these decisions amid uproar due to disagreements on the right percentage of oil revenue for host communities.
The report of the Senate Joint Committee on Petroleum, which processed the bill, had proposed five per cent for host communities, while stakeholders had in the original bill proposed 10 per cent. But when the Senate began clause-by-clause consideration of the bill, it was reduced to three per cent.
The decision caused a moment of stalemate as Senators from the Niger Delta region rose against it. Senator James Manager (Delta State) proposed an amendment to retain the provision of five per cent in the report but he was defeated.
As Senate President Ahmad Lawan hit the gavel to re-confirm the three per cent host community provision, Senator George Sekibo ((River State) called for a division. His motion challenged the ruling of the Senate President and the floor again became tensed up.
Fearing the consequences of embarking on a division, the Senate leadership swiftly resorted to pleading with Sekibo to withdraw his motion. Senate leader, Yahaya Abdullahi, said the Senate would be ‘heading to Armageddon’ if it allowed that division to happen.
Lawan also supported the Senate leader and preached the gospel of patriotism to Sekibo who later agreed and withdrew his motion.
Chairman of the Senate Joint Committee that processed the bill, Sabo Muhammed Nakudu (APC, Jigawa West), while presenting the report explained that “the Joint Committee’s recommendation recognises the need for the country to urgently and aggressively explore and develop the country’s Frontier Basins to take advantage of the foreseeable threats to the funding of fossil fuel projects across the world due to speedy shift from fossil fuel-to other alternative energy sources.”
On the initial recommendation of five per cent for host communities, the committee said it is aimed at ensuring adequate development of the host communities and reduction in the cost of production.
The Bill has equally established the Upstream Regulatory Commission to among others regulate upstream petroleum operations, including technical, operational and commercial activities and ensure compliance with all applicable laws and regulations governing upstream petroleum operations.
The Commission is also to ensure that upstream petroleum operations are carried out in a manner to minimise waste and achieve optimal government revenues; promote healthy, safe, efficient and effective conduct of upstream petroleum operations in an environmentally acceptable and sustainable manner.
THE House of Representatives also passed the PIB yesterday. This followed the adoption of the report of the Mohammed Monguno-led Adhoc committee on PIB at the plenary with Deputy Speaker of the House, Ahmed Wase presiding.
Monguno, who is the House Chief Whip while eliciting the support of his colleagues, explained that the proposed legislation contains 319 clauses aimed at ensuring transparency and openness in the oil and gas industry.
Monguno said it was unfortunate that Nigeria recorded losses in terms of direct foreign investment due to the archaic and obsolete laws in the oil and gas industry over the years. This, he said forced investors to move to other jurisdictions like Chad, Cameroon, Angola and Ghana to the detriment of the country.
Highlights of the Bill include transforming the Nigeria National Petroleum Corporation (NNPC) into a profit-oriented company devoid of political interferences. He disclosed that the House endorsed five per cent as operational cost share for the host communities as against the 10 per cent canvassed by leaders of the oil-producing communities.
At the presentation of the 2022-2024 Medium Term Expenditure Framework (MTEF) yesterday, Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, said crude oil production for 2022 will be 1.88 million barrels per day with a price benchmark of $57 per barrel.
Some other fundamentals include an exchange rate of N410.15; FG’s share of federation account: N5.513 trillion; FG’s share of VAT: N339.3 billion and a projected deficit of N4.6 trillion while projected revenue is N8.359 trillion.
The Minister regretted that as much as N850 billion was monthly paid in subsidising imported petroleum products into the country, saying such a huge amount of money could go into providing services that would have more impact on the vulnerable population of the country, better than a subsidy for fuel, which only the rich with plenty cars benefit from more.”