•Senate approves 30% fund exploration of frontier basins
•NNPC to become limited liability company
•Passage of PIB: Jinx broken indeed —Presidency
•Oil, gas industry leaders react
By Emma Amaize, Udeme Akpan, Henry Umoru, Levinus Nwabughiogu & Obas Esiedesa
The passage into law of the controversial Petroleum Industry Bill, PIB, has not gone down well with the Niger Delta host communities, as the Senate gave host communities only three percent equity holding in Host Communities Trust Fund, as against the 10 percent people of the oil-producing areas demand.
The House of Representatives, on its part, yesterday, passed the age-long awaited PIB, granting host communities’ five per cent equity stake for host communities in the Host Communities Trust Fund, as against the agitation for 10 per cent by host communities.
Meanwhile, National President, Host Communities of Nigeria Producing Oil and Gas, HOST ON, Chief Benjamin Tamanarebi said it was insulting for the Senate and House of Representatives to cede only three and five per cent equity shareholding respectively to the oil and gas producing communities in the PIB, passed, yesterday.
Another controversial area passed was the fund exploration of frontier basins, which the Senate left at 30 percent, while stakeholders in the Niger Delta had demanded that it should be reduced to 10 percent.
Both the Senate and Reps agreed that the Nigerian National Petroleum Corporation, NNPC, should become a limited liability company.
This came as Presidency described the passage of the complete version of the PIB, which had defied passage in previous assemblies over the last 20 years by the Senate as a jinx that had indeed been broken.
Meanwhile, at the Senate, after a very heated argument, debate and plea on the percentage for the host communities, the lawmakers approved three percent of the actual annual operating expenses of the preceding financial year in the upstream petroleum operations affecting the host communities for funding of the Host Communities Trust Fund.
The original bill brought to the Senate by the Executive was 2.5 percent for funding of the Host Communities Trust Fund, but the Senate committee moved it to five percent, but the Senate at the end of the day approved only three percent.
The Senate report read, “This chapter highlights the effective and efficient administration of the Host Community Trust Fund which is to be anchored by the settlor, i.e. the oil and gas companies operating in the host communities.
“The various recommended provisions when passed into law will ensure a peaceful operating environment that will have a positive direct impact on the cost of oil and gas production which has been the bane of the Nigerian oil and gas industry.”
Earlier, the senators had a closed-door meeting with the Minister of State, Petroleum, Timipre Sylva and Group Managing Director of the NNPC, Mele Kyari, who briefed them for over one hour on the technical and financial details of the Bill before the consideration of the report.
After the consideration of Report of the Joint Committee on Petroleum (Downstream) Petroleum (Upstream) and Gas Resources Petroleum Industry Bill, 2021 ( SB. 510) laid by the Chairman, Senator Sabo Mohammed (APC, Jigawa – West), the Senate approved funding mechanism of 30 percent of NNPC Limited’s profit in oil and profit gas in the production sharing, profit sharing, and risk service contracts to fund exploration of frontier basins.
With this development, 30 per cent of profits accruing from oil and gas operations by the NNPC, is now to be set aside for exploration of oil in the frontier basin.
It means that all exploration of frontier basins shall fall under the purview of the Upstream Regulatory Commission.
The Senate also passed that as part of moves to strengthen the accountability and transparency of NNPC Limited, it will now be a full-fledged CAMA company under statutory/regulatory oversight with better returns to its shareholders, the Nigerian people.
On Petroleum Industry Fiscal Framework, the Senate passed the Bill as part of moves to attract and unlock the long-awaited capital investment inflows to the country’s oil and gas industry since it contains enhanced incentives in the land, swamp, shallow and deep waters terrains. Provisions have also been made for better and attractive tax incentives to achieve this goal.
Before the passage of the PIB, Senator Ahmad Kaita( APC, Katsina North) stirred controversy, when he called for an amendment to the recommendation by the Senate Committee from five percent to three percent in line with the explanation of the GMD, NNPC during the closed-door session.
When the President of the Senate, Senator Ahmad Lawan, put the question for a voice vote and despite resounding nays, passed in favour of the ayes, however, generated noise in the chamber as some senators, majorly the South South senators were uneasy with the ruling.
At that point, Senator James Manager (PDP, Delta South) called for another vote opposing the initial vote as he proposed an amendment to retain the provision of five percent in the report but he was defeated.
Senator Goerge Sekibo (PDP, Rivers East) raised a Point of Order 73 of the Senate Standing Rules as amended, calling for a division of the Senate.
According to Sekibo, the order challenged the ruling of the chairman (Lawan) and requires that he put the question to vote a second time. If his opinion was again challenged, he shall call each Senator’s name to vote.
Lawan who was apparently afraid of the consequences of embarking on a division, swiftly resorted to pleading with Sekibo to withdraw his motion.
This time, the Senate Leader, Senator Yahaya Abdullahi (APC, Kebbi North) appealed to Sekibo to withdraw the order.
At this point, the President of the Senate who also pleaded with Sekibo to drop his division point of Order said, “We are representatives of the people before anything. I just want to remind us of what we know that we represent, we legislate and oversight.”
After listening to them, Senator Sekibo who withdrew the point of Order said, “Mr President, you know naturally we have known ourselves in this chamber from 2007, and I also know that it is the privilege of all parliamentarians all over the world to call for division when he feels the need.
“As the Senate President, if you appeal to me on something that is personal and I did not take it, you will not be delighted but no I will say something.
“For I’m asking for is not for me as a person but it is in the interest of the nation because when we pass a good law, we must also have a good environment to implement the law.
“If the environment is not conducive for implementation, we will all come back to redress it. My appeal to you that you increase the number a little bit. I have withdrawn while appealing to you.”
In his concluding remarks after the passage, Lawan who noted that the passage of the PIB was an indication that the “demon” behind its non-passage in the past had been finally defeated, said, “The 9th Senate and indeed the 9th National Assembly has achieved one of its fundamental items on the legislative agenda.”
Before the consideration of clause by clause of the report and passage, the Deputy President of the Senate, Senator Ovie Omo- Agege who spoke in his capacity as the Senator representing Delta Central had pleaded that the host communities fund should be above five percent as earlier recommended by the committee.
Reps pass 5% equity holding
At the House of Reps, the five per cent equity granted to the host communities was, however, an improvement on the 2.5 per cent earlier proposed for the communities in the bill.
The clauses and sections of the bill are 318 in all, and following consideration of the bill, it will be passed into law any time from now.
The piece of legislation from the Executive is about 20 years old in the National Assembly.
Previous attempts to pass the bill into law by the former Assemblies hit the brick wall due to variegated interests from high and mighty.
Section 240, subsection 2 of the bill that prescribes 2.5 percent equity for the host communities was amended to provide for 5 percent.
Moving the motion earlier for the consideration of the report, the Chairman of the Ad-hoc Committee on PIB, Mohammed Mongunu, said bypassing the bill into law, the House would have written its name in gold.
Speaking after the consideration of the report in the Committee of the Whole chaired by the Deputy Speaker, Ahmed Wase, the Speaker, Femi Gbajabiamila, hailed the House for achieving the feat.
“I want to commend the 24 wise men and the 360 members in producing this 318 sections law. In the coming week, the Electoral Amendment bill will follow suit.
”By the time we are done, irrespective of which side of the divide you are, this 9th House would have done us proud,” he said.
Host communities reject 3-5% equity shareholding
Tamanarebi, who spoke to Vanguard, said: “Imagine for over 63 years of neglect, deprivation and marginalization of the aborigines who have suffered untold hardship amid wealth, for the first time after many years of agitation, asking for only 10 per cent equity shareholding and the leadership of NASS is considering five per cent and three per cent viewing it that they have done us a favour.
“This is unacceptable and we reject the offer. It is our sole right as the aborigines, it is our land, it is our waterways, is Nigeria claiming it because we are from Nigeria state.
“Then why denying our rights to benefit, the right to have a clean environment, the right to have potable water to drink, good hospital, electricity, good roads but leaving us in abject poverty, in a desecrated environment without considering the UNFCCC/ CDM criteria.
“We will still study other areas in the Bill to address it in due course, for example, section 104 (2) on gas flaring where funds on penalty should be paid to the government, we reserve to study all sections, but is a fruitless exercise as usual,” he said.
Passage of PIB: Jinx indeed broken— Presidency
In a statement, yesterday, by the Senior Special Assistant to President Muhammadu Buhari on National Assembly Matters( Senate), Senator Babajide Omoworare, congratulated President Muhammadu Buhari, Senator Ahmed Lawan, Senate President and Speaker House Representatives Femi Gbajabiamila on the passage of the PIB by the National Assembly.
Omoworare said: “It should be noted that the efforts by the Executive and Legislature in Nigeria to put in place contemporary legislative and legal framework in the oil and gas sector has proved abortive since the year 2000; also, the non-amendment of the extant framework being the Petroleum Act of 1967, has affected the inflow of Foreign Direct Investment as well as growth in Local Content.
“Breaking this jinx and achieving this feat is a testament that the Executive and the Legislature can really work together and truly engage each other, without compromising party position and individual perspective, in the most positive manner with a view to actualizing the common goal and communal good for Nigerians.
“I would like to thank the entire Leadership and Members of the Senate and House of Representatives, as well as the Minister of State for Petroleum, Timipre Sylvia, and the Group Managing Director of NNPC, Mele Kolo Kyari for their focused and tenacious attitude to achieving this milestone.”
Oil, gas industry leaders react
Commenting on the passage of the PIB, Lead promoter, EnergyHub Nigeria, Dr Felix Amieyeofori, said: “This is a welcome development for the oil and gas industry, and the country at large as it will provide the long-expected business and investment environment for operators, and other stakeholders.
“This is coming at the time when oil and gas-dependent economies are grappling with the reality of the energy transition to cleaner renewable energy sources, targeted at tackling the global climate problems.
“While oil will still play a significant role in the global energy mix beyond 2050, the “Proverbial Net Zero Date,” Nigeria must ensure that we utilize the opportunities created by this Law to fully harness the total hydrocarbon value chain to generate the capital that will propel our transition into the renewable world.
“I would, therefore, advise that government and all the stakeholders to work toward ensuring the immediate implementation of the critical and pivotal clauses without the traditional politicking.
“The 2014 National Conference is still very fresh, as Nigerians are known for putting together very pragmatic policies and laws, but, we have always failed to walk the talk, and that has been the albatross of our development as a nation.”
Similarly, a Port Harcourt-based energy analyst, said: “The PIB is dead on arrival, apparently because it is belated.
“This administration could have passed the PIB much earlier, but it wasted time trying to break it down into segments, including the Petroleum Industry Governance Bill, PIGB, before returning to the original plan of passing it as a single document.
“Consequently, the oil and gas industry and the entire nation’s economy have suffered. Many investments and companies had over the years gone to other nations in Africa, especially Angola, Ghana, and even the emerging East African countries.”
NEITI applauds NASS courage in passing PIB
Nigeria Extractive Industries Transparency Initiative, NEITI, has hailed the National Assembly for passing the PIB, describing the move as bold, courageous and progressive.
Executive Secretary of NEITI, Dr Orji Ogbonnaya Orji in a statement said: “NEITI as an agency set up to enthrone transparency and accountability in the management of extractive industries in Nigeria has demonstrated genuine and legitimate interest in the PIB from the onset.
“NEITI’s interest is in view of the urgency and strategic importance of a new law to replace the existing archaic legislations that have aided huge revenue losses, impeded transparency, accountability and investment opportunities in the nation’s oil and gas industry.”
He recalled that as an anti-corruption agency in the sector, NEITI boldly alerted the nation through a special Policy Brief “The urgency of a new petroleum sector law” that the current stagnation of investment opportunities in the Petroleum Industry was as a result of the absence of a new law for the sector.
“This has led to huge revenue losses to the tune of over $200 billion. In that publication which was widely circulated, NEITI argued that the “revenue losses were as a result of investments withheld or diverted by investors to other (more predictable) jurisdictions.
“The hedging by investors stems from the expectation that the old rules would no longer apply, but not knowing when the new ones would materialise.”
He added that NEITI Reports on the sector had also disclosed that over $10.4 billion and N378.7 billion were lost through under-remittances, inefficiencies, theft or absence of a clear governance framework for the oil and gas industry.