PIB passage is long overdue- Expert
The need to expedite action on the passage of the Petroleum Industry Bill (PIB ) by the National Assembly was the focus at a recent workshop organised by FOSTER where Prof Wumi Iledare, University of Cape Coast, Ghana highlighted some important elements of the Host Community Trust (HCT) Fund in the PIB 2020.
While underlining the need for urgency on passage of the new PIB, he noted that, it had taken 20 years in making, hence the need to expedite action, especially with the recent realities in the global oil industry.
He pointed out the issue of energy transition whereby the place of fossil fuel in the energy mix is threatening its potential as the leading forex for Nigeria today, advising that there is the need to properly address what goes to the host communities who are equitable owners of the resources and host to petroleum operations.
According to him, “Contemporary Industry Outlook 2011 – 2019 shows that Oil reserve increase by 0.03%; Oil production decrease by 11.70%; Gas reserve increase by 4.52%; Gas production increase by 4.52%; Rigs decrease by 53.16%; DWells decrease by 37.02%; CWells decrease by 27.28%; PWells decrease by 12.32%; Price decrease by 40.55%.
“Government needs to look beyond oil in balancing its budget.”
Prof Iledare spoke on the need to correct perceived injustice on the host community.
He drew attention to the Host and Landlords’ general feelings of inequitable remuneration to ameliorate the direct negative social and pecuniary impact of petroleum operations. that the need for corporate and government social investments is inevitable. It was highlighted that, about 5 Trillion was generated in 2019 and about 600 billion derivation funds went to Oil producing States.
According to him, some areas that the PIB 2020 should address include; “Exclusion of the direct ownership by the CFRN 1999; The departure from Revenue Sharing (minerals) under 1963 Republican Constitution – 50% derivation, 20% FGN, 30% paid into the distributable pool to be shared among the states, including the Donor States; Perennial feeling of lack of sufficient economic development arising from the proceeds of oil and gas production; Resources from 13% Derivation and NDDC Act conferred on the State government hardly trickle down to them; No community participation in project formulation or execution for NDDC, derivation and GMOU projects.
“Suggested and conceivable instruments of consideration to ameliorate the inequity perception in the Petroleum host communities include; amendment of the confer ownership of petroleum resources on host communities; conferment of all or part of concession rentals and royalties; direct participation/ equity ownership of petroleum licences and leases- carried equity participation and share of profit and dividends; conferment of funds otherwise meant for derivation and NDDC directly on host communities; 10% (or more) of net profit of oil and gas companies.”
He explained that the Primary Goal and Objectives of PIB 2020 PHC Fund is to- “Accelerate Economic Growth & Sustainable Development; To foster sustainable prosperity within host communities; Provide direct social and economic benefit from petroleum operations to host communities; Enhance peaceful and harmonious or co-existence between licensees or lessees and host communities and Create a framework to support the development of host communities.”
On utilization of the HCTD Fund, these include; “undertake infrastructural development of the host communities; facilitate employment opportunities employment opportunities; advance and propagate education and learning; Provide medical facilities and personnel; undertake training, skill acquisition & other empowerment programmes; support local initiatives on environmental protection; support local initiatives on enhancement of security; invest certain part of available fund for future generations; secure fund and loans for specific projects; any other project for benefit of the Host Communities.”
On the way forward, he spoke on the need for a value added economy, domestic participation, indigenous utilisation and agitation should not be about survival today but a long lasting solution (sustainable prosperity).