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Presidency, Reps strike deal on royalty for oil communities

By Tordue Salem

ABUJA—The House of Representatives and the Presidency yesterday agreed on a new and more specific royalty regime for crude oil bearing communities in the country.

The House of Representatives joint committees on Petroleum Resources upstream and downstream, Gas and Justice at a retreat in Warri, Delta state with the Inter agency team on the Petroleum Industry Bill in the Presidency, agreed to work out a clear administration of royalty for the communities that produce oil in the Niger Delta region.

The Chairman of the Petroleum Industry Bill Inter agency team, Dr. Timothy Okon who delivered a paper at the retreat, said some clauses in the Bill which had been a source of controversy, did not really mean oil prospecting companies won’t pay royalties.

The PIB presently before the National Assembly seeks foreign oil companies to pay royalties at their own discretion, but answering questions after his paper entitled ‘Overview and Rationale of the Petroleum Industry Bill’, Dr. Okon said the oil communities deserved to enjoy the royalties and penalty fees.

In his response to the royalty and penalty questions by Rep. Asita from Rivers State, and several other lawmakers, Okon said though the bill as proposed did not address who benefits from royalties, it was only reasonable that the host communities get the funds realised from royalties, just as he said the communities be entitled to penalty fees.

“On the beneficiary of the penalties for gas flaring, honestly we did not tackle that in the bill. We did not specify the beneficiary of the penalties, but it is only fair that it goes to the victims of the gas flaring”, he said, adding that “the Agency will work with the National Assembly on royalties for oil producing communities”.

Okon  said oil companies were resistant to the Bill because it sought a direct payment of royaties to communities, and transparency in their operations among other things.


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