By Tordue Salem, Abuja
Stakeholders in the oil and gas industry, Thursday demanded a raise of the oil operating expenditure from 2.5 per cent to 10 per cent for host communities in the new petroleum industry bill (PIB).
The position of the stakeholders to the National Assembly was presented by the executive director/publisher of Order Paper, Mr Oke Epia at a one-day workshop tagged “Reforming the oil and gas sector in Nigeria-strategy meeting on post-hearing engagement on the PIB” organised by FOSTER for House of Representatives press corps.
He said the “10% of OPEX for Host Community Development Trusts as against 2.5% prescribed in the PIB – This is a middle ground position taken after vigorous and exhaustive debate on the concerns of companies, government and the peculiar nature of the development challenges facing current oil-producing areas and places newly discovered for production”.
According to him, “The debate was anchored on a calculated materiality threshold of both the prescribed and recommended percentages of OPEX.
“This advocacy is anchored on the fact that all jurisdictions with oil-producing communities have one form of beneficiation mechanism or another to compensate the hosts”
Oke said “The PIB as currently framed farms out the ownership, design and vehicle for the development of oil-producing areas – the proposed Host Community Development Trusts – substantially to companies. This is a recipe for disaster and defeats the objectives intended to be achieved by the PIB”.
He explained that the stakeholders agreed that “The proposition in the PIB that host communities are ‘vested’ with the responsibilities for the protection of petroleum assets is escapist, defeatist and laden with the potential for scapegoating and vendetta”.
He said part of the observations of the stakeholders was that “The ambiguity or avoidance by the bill to clearly define what constitutes and who defines a host community is a dangerous latitude that could be exploited for crisis-mongering”.
In order to have a seamless law, he disclosed that the stakeholders suggested that “All environmental issues – audit, regulation, and remediation – be ceded to the ministry of environment to avoid policy/regulatory overlaps as currently contained in the bill.
“Nigeria must be positioned to earn more revenue from a fiscally responsible framework to guide the petroleum sector.
“Companies/operators should be entitled to decent Returns on Investment (ROIs) to encourage current and fresh investments and by extension, the growth and development of the industry.
“Job security and decency of labour for workers in the industry must be guaranteed in the transition to a post-PIB regulatory regime.
“Gender dimensions and mainstreaming must be taken into account in the framing and operationalization of the proposed law
“The PIB must look out for the interests of the unborn and entrench a befitting saving scheme for the future”.
Some of the stakeholders include DAPPMAN, NUPENG, PENGASSAN, OXFAM, BudgIT, CISLAC, Lawyers in the oil and gas network, OPTS, Chartered Institute of Taxation (CITN), Women in Energy, Oil and Gas Nigeria and Women in Energy Network (WiEN).
Others are Bayelsa Cluster Development Board, Etisong Oil and Gas Autonomous Host Community, Itsekiri Oil and Gas Host/Producing Communities, Isoko Monitoring Group, Omoku Youth Federation and Ndokwa East Development Organisation.
Giving an overview of the bill, Dr Joe Nwakwue said when passed and signed into law, it will establish a framework for the creation of a commercially oriented driven national petroleum company.
He said it will also promote transparency, good governance and accountability in the administration of the petroleum resources of Nigeria adding that it will foster a business environment conducive for petroleum operations.
In his welcome remarks, Dr Michael Uzoigwe of Facility For All Sector Transformation (FOSTER) said the group was committed to supporting the creation of an enabling environment for the oil industry.