- Re-emphasizes Need for IOCs to relocate headquarters to Niger Delta
Exactly three working days to June end deadline given by the National Assembly to pass the age-long Petroleum Industry Bill, (PIB) to law, the Host Communities of Nigeria, oil and gas, (HOSCON) has reminded the lawmakers on the need to ensure that their demand for a 2.5% Production Quantum is adequately reflected in the final document.
The Host Communities during the public debate on the Petroleum Industry Bill, had, among other things, demanded for a 2.5% production quantum from oil companies rather than a 10% equity participation which was suggested by the lawmakers and some other stakeholders.
The HOSCON had argued that accepting a 10% (or any other percentage) of equity participation would in the long run pose the challenge of having to force the host communities to contribute to production cost before profit/loss sharing as the case may be.
Following the promise by the National Assembly recently to pass the PIB by the end of June before their annual vacation in July, the executive of HOSCON led by its national chairman, Dr. Mike Emuh, reiterated their demand for a 2.5% flow station production quantum, noting that it will enable the oil producing communities access to crude oil to run the eleven modular refineries recommended.
Reiterating the body’s position in an interview with journalists recently, Emuh had explained that the host communities will find it difficult to contribute its 10% equity participation, pointing out that it is the duties of the Nigerian National Petroleum Corporation, NNPC and the Federal Ministry of Petroleum Resources to undertake that in conjunction with the joint partners in the industry.
They also argued that the offer of 10% equity participation will present a situation where the rich will short-change the people especially where the communities cannot make their contributions.
Emuh said: “In totality we say no to 10 per cent equity participation because the host communities cannot afford it, as it is the responsibility and duties of NNPC and Federal Ministry of Petroleum Resources,”
During the debate on the Bill last year, the Senate had argued in favour of equity participation for the Host Communities producing oil and gas in the Niger Delta region.
HOSCON also reminded the National Assembly to ensure that provision is made in the final bill for oil and gas producing companies to relocate/site their headquarters in their areas of operations in the Niger Delta, adding that they have no business operating outside their field operations.
“The IOCs and NOCs should relocate their corporate headquarters to their various areas of operations and bases in the oil and gas producing states as they have no business outside their field of operation.”
“They are not getting their crude oil for their operation where they currently reside their corporate offices. The relocation of their corporate offices to their areas of operations will create the needed employment and development for the host communities.
“We, HOSCON, would want to encourage the 9th NASS to expedite action on the passage of the PIB that has remained unattended to for the past 14 years. It will be of rich history when the 9th NASS passes this bill as the first law to be in favour of the host communities producing oil and gas in Nigeria.
“This will create room for industrialization of communities and employment for the people of the communities, who are already impoverished by the present system in place. This proposed system by HOSCON will also reduce the over dependence on imported petroleum products”, Emuh stated.
Meawhile, the Senate President, Ahmad Lawan, had assured that the Petroleum Industry Bill will be passed before the end of June, 2021.
Lawan who disclosed this at the fourth edition of the Nigerian International Petroleum Summit in Abuja recently, said that the failure by the lawmakers for passing the Bill in May 2021 as promised, was due to the need for an update of the legislative framework to attract foreign investment for the development of the industry.
“The National Assembly was cautious to accommodate inputs from a wide range of the Petroleum industry stakeholders.
“At the moment, I think they ( joint committee of the two chambers of the national assembly on PIB) are about to start writing the report, which they will lay before the two chambers of the national assembly, probably by the middle of next month which is June.
“It is our determination, plan and design that we will be able to pass the PIB by the end of June. But we are determined to pass this PIB by the end of June.
“There’ll be more resources, foreign direct investment flowing into the country and more certainty that is essential that you can come to Nigeria and invest in the oil industry because there’s a legal framework that regulates the entire environment”, Lawan said.
A cross section of respondents who spoke with The New Diplomat, expressed doubt over the ability of the National Assembly to keep faith with its promise and pass the PIB before the end of June, taking cognizance that there remains only three working days for the month to come to an end.
“This is not the first time they (Senate) has promised to pass the bill. This bill has been in the National Assembly for over 14 years. Early in May this year, they promised to pass the Bill by May ending but that was not to be. I doubt if they could pass the Bill within the three working days of next week which is the end of June”, Chief Jacob Oloko, an oil business man had told our correspondent in Warri.
It would be recalled that Royal Dutch Shell Plc, a major player in the Nigeria oil and gas industry, recently called on the federal government to pass the PIB as soon as possible, adding that continuous delay in passing the bill creates opportunity for investments to move elsewhere.
Commenting on Senate’s promise to pass the Bill recently, the Managing Director of Shell Nigeria Exploration and Production Company, Mr. Bayo Ojulari, who also expressed doubt over the June end deadline by the Senate, said that for every month and week the bill is delayed, it denies the nation of investment opportunities.
Ojulari also expressed fear that the growing global emphasis on the transition from fossil fuel to other forms of energy, might render the PIB insignificant if not urgently passed now for the country to reap its benefits.
He said: “We’ve got the commitment that it will come up in June. We’ve heard that before and we are waiting to see. For every month and every week that we delay, investment fund is moving somewhere else.
“It is important to pass the PIB, but all of us collectively need to think about how we will implement it to ensure that the energy transition does not make the PIB obsolete the day it’s passed.”
