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PIB: Oil Coys to pay $100,000 fine per day for floating Nigerian Content Plan

Oil, Amnesty: From frying pan into fire

By Chioma Gabriel, Deputy Editor and Luka Binniyat

The initial euphoria that greeted the amnesty granted to militants by the Federal Government  is smouldering  with the recent developments on the Niger Delta cause. The scenario began when  the Joint Task Force bombed  some communities in the Delta region before the amnesty.

But  the perceived tongue-in-cheek   60 day cease-fire proposal of the federal government does not seem to be achieving the desired results.

The response of the militants who went as far as bombing the Atlas Cove in Lagos and the threat by the South-South Governors  to pull out of the amnesty package, the reported reversal of  PTI Effurum from a degree-awarding institution to a training institute; the positioning of the Petroleun University at Kaduna, a state that does not produce a drop of oil and most recently, the Petroleum Industry Bill, PIB, are all pointers to the fact the end is not yet in sight to the crisis in the Delta region.

The Senate and Dr Riliwan Lukman
National Assembly and Dr Riliwan Lukman

If anything, the problems  seem  to be degenerating slowly but  consistently.

The  bombing of  the oil communities was seen to be in bad taste. The Federal government’s response of  violence for violence ridiculed the peace process and trivialised  amnesty. The fact that over the years, Nigeria has battled   bad leadership has come to the front burner.

President Yar Adua’s commitment to the issue of national unity is being reviewed and his wisdom in the choice of  northerners to preside not only the petroleum industry but handle key positions in that industry is being questioned.  The Stakeholders’ Forum, organised by the Delta State Government in Asaba to sensitise the people on the National Gas Master Plan, held July 20  agitated against  the issue of ownership and what the host communities and indigenes stand to gain by allowing the Federal Government and multinational companies to exploit gas in the state.

The Forum  complained  about the  oil  found at Oloibiri in Bayelsa State, and vowed that they would not allow gas exploration in their areas if the issue of ownership, local content and privileges of the host communities were not satisfactorily resolved.

With the threat by the South-South Governors  to back out of the amnesty package still pending, the PIB bill which is the latest in the scene  is perceived as insensitive to the yearnings of the people of the Niger Delta and the oil producing communities.

The bill amongst its other issues, allegedly, neglected the fact that globally,  royalty is  paid to the owners of the land where mineral resources are generated. The Petroleum Minister , Rilwan Lukman is now being perceived  differently.

He is seen in some quarters as an enemy of the Niger-Delta cause, particularly over his alleged  utterance on the positioning of the Petroleum University at Kaduna and the down-grading of the PTI, initially promoted to a degree awarding intitution.

Saturday Vanguard in this edition presents the views of  a cross section of Nigerians on  the developments in the Delta .

PIB: Oil Coys to pay $100,000 fine per day for  floating Nigerian Content Plan

The Public Hearing organised by the National Assembly on the Petroleum Industry Bill (PIB)  after the  Bill  had scaled through second reading in the two chambers, attracted an unprecedented  attendance.

The most pointed  issue at the Public Hearing  were the unbundling of the Nigerian National Petroleum Corporation (NNPC), the review of fiscal regimes in the oil and gas sector, and most of all, the welfare of oil producing communities.

The Memorandum submitted by all government agencies directly and indirectly linked with the oil sector is hailed by all, except oil operating companies, as far _reaching.

Known as the Inter_Agency Memorandum, feelers are that government has made up for the deficiency of the original Bill with its submission in the memorandum.

For example, under Nigerian Content Plan and Local  Social Responsibility Plan, any oil and gas company that fails to implement the mandatory developments plans for its host communities would be fined  $100,000 per day as would be calculated by the regulator authority.

The proposed legislation also  advocates for the revocation of a lease or license of an operator if he defaults for a period of six months.

Bellow are some section of the proposed  law as it affects Oil Producing Communities   under the Nigerian Content Plan:
Section 413 of the Bill, spells out mandatory roles that oil firms would play in the Nigerian content drive and for development of local communities where they intend to invest in anything above $10 million dollars. The legislation when passed into law would also affect sub_contractors too

Section 413 (1) states:  “A development plan pursuant to Part III shall not be approved or a commercial licence pursuant to Part IV shall not be granted without an approved plan for Nigerian content (“Nigerian Content Plan”) provided such development plan or commercial licence relates to a proposed project involving an investment of US $10 million or higher based on the assessment of the Inspectorate, Agency or Authority as the case may be.”

The preceding section goes on to state statutory commitment the  oil operating companies must pursue in the Nigerian Content Plan. These are purchase of Nigerian goods and services; ,procurement guidelines,  employment of Nigerian citizens; (d) training and education; research and development; among others.

Subsection  (4) states, “The proponent of a Nigerian Content Plan shall ensure that the provisions contained in this section shall also apply to any contractors or subcontractors of the proponent.”

But, the most definitive of the section is in 413 (5) (a) to (i) as shown below:
(5) Any petroleum prospecting license and petroleum mining lease shall contain social responsibility provisions with respect to economic spin_offs to local communities situated near the petroleum operations of a licensee or lessee.

Such provisions shall include, without limitation and in addition to such legal provision that may already apply, the following:

(a) repair and maintenance of local roads, in particular those roads used or created by_the licensee or lessee
(b) contributions to or payments for community water and power

(c) contributions to or payments for local schools, hospitals and community centers (d) employment of local Nigerian citizens

(e) purchase of local goods and services
(f) assistance with the creation, development and support to small scale local enterprises

(g) local training and education programs, with specific emphasis on increasing local job opportunities in the petroleum operations

(h) specific emphasis on local issues with respect to subsection (5)( c), (d) and (e) of this section under the Nigerian Content Plan pursuant to subsection (1) of this section,
(i) regular consultation with local communities about the ongoing implementation of the social responsibility provisions, and regular reporting and verification of the social responsibility provision.

On Thursday, Prof, Pat Utomi, a renown economist and former Presidential aspirant, hailed the proposed legislation, and asked  that Nigerians  give it a chance to pass into law.

“This is the  first time that we are going to have our own laws. I think that provisions of the proposed Bill is in the best interest on oil producing communities, Nigeria and even the oil companies themselves”, he said at a Press conference at the National Assembly.


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Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.