By Hector Igbikiowubo & Victor Ahiuma-Young
LAGOS â€” IN what appears to be a turn around, the Federal Government may have acquiesced to the submissions of stakeholders who made presentations at the public hearing on the Petroleum Industry Bill (PIB), agreeing to some modifications.
Vanguard gathered that as part of efforts to inspire confidence in the proposed amendment to the existing laws, government was considering direct allocation of derivation fund to communities.
Dr. Rilwanu Lukman, Minister of Petroleum Resources made the disclosure while speaking with Vanguard at the just concluded 154th ordinary meeting of the OPEC conference in Vienna, Austria.
â€œThere may be some modifications here and there to take into account what we have heard at the public hearing especially, but the fundamental objectives of the bill remains the same.
“We are hoping that the new law that is coming will enhance the confidence of our potential investors, both those who are with us and the new ones we are hoping will come into Nigeria,â€ he said.
Asked to comment on governmentâ€™s position on investorsâ€™ concerns over increase in taxes, Dr. Lukman said the original intention was to correct the â€œaberrations contained in the previous fiscal regime and to put in place a fiscal regime that will be sustainable over a period of time because what weâ€™ve had has outlived its usefulnessâ€.
Although there are quite a number of other concerns which have been raised by investors, including the workability of proposed incorporated joint ventures â€” staffing, funding, and others, Dr. Lukman did not give specifics regarding the planned modifications.
While representatives of the communities in the Niger Delta had complained of not being taken into cognisance, companies engaged in engineering and fabrication complained of being starved of jobs, querying governmentâ€™s commitment to the Nigerian content initiative.
Similarly, organised Labour complained about the lack of provision for local refining, job security for members in view of the likely break-up of existing entities as well as fears of anti-labour practices.
Organised labour had also expressed worry over the non-inclusion of the concerns of oil producing communities, noting that any law that fails to take the communities into cognizance will not augur well for operations.
Despite the seeming apathy over the delay in the implementation of the PIB and the air of insecurity in the Niger Delta, he said government was well on course to achieving four million barrels per day production target.
â€œIt is still there in the long run. We are almost there. We have achieved 3.7 million barrels per day at the moment, leaving only 300,000 barrels per day to beef it up to 4 million barrels per day and we have still got another year in which to do this so we are hopeful.â€
He alluded to media reports quoting the Group Managing Director of the Nigeria National Petroleum Corporation saying the countryâ€™s production now stood at 2.3 million barrels per day, adding however that the figure includes production of condensates.
Dr. Lukman clarified that the countryâ€™s crude oil production was actually between 1.5 and 1.6 million barrels per day, adding that condensates accounts for the balance which makes up 2.3 million barrels per day.
Vanguardâ€™s investigation revealed that condensates production is not subject to OPEC quota restriction.
On the likelihood that Nigeria may ask for an increase in quota, he said the country was satisfied with its quota at the moment, adding that â€œthe market is doing reasonably well and you donâ€™t start tampering with the market when things are that way.â€
Direct allocation to communities:
Vanguard gathered that in an effort to inspire confidence in the bill, government was considering allocating 5 per cent derivation to the oil producing communities and another 10 per cent to the states.
In line with this proposition, the presidency plans to meet with governors and other notable stakeholders in the region before the close of next week.
However, it is still not clear if this will assuage the feelings of neglect and deprivation which fueled dissent and apathy from representatives of Niger Delta extraction in the national assembly towards the passage of the bill.