- PIB passed 20 years after
Senate and House of Representatives after almost 22 years.
They, however, differed on one of the contentious provisions of the bill: the percentage of oil companies yearly operation cost to be paid into a trust fund for the development of oil-bearing communities in Niger Delta.
While the Senate after some argument, approved three per cent (about $502.8million) of the oil firms operational costs, the House okayed five per cent ($895 million).
Both chambers however, agreed on the setting up of Frontier Exploration Funds (FEF) for oil exploration in the Lake Chad Basin, Benue trough, Anambra Basin, Dahomey and Gombe basin. The FEF, a new provision, will be 30 per cent of oil and gas profits of the Nigerian National Petroleum Corporation Limited.
Another highlight of the bill is the unbundling of the NNPC.
Senate President Ahmad Lawan described the passage of the bill as a watershed for the 9th National Assembly. He said that with the development, “ the demons of PIB “ had been defeated.
The bill was passed first by the House at its plenary presided over by Deputy Speaker Idris Wase, after the Committee of the Whole considered its clauses.
The Senate passed it after considering the report of the Joint Committee on Downstream Petroleum Sector; Petroleum Resources (Upstream); and Gas.
The Joint Committees of the National Assembly recommended five per cent as the minimum yearly operational costs of the oil companies that should be paid yearly by oil companies for the development of host communities.
It was gathered that the decision by the Senate to reduce the five per cent to three per cent was reached during a closed-door meeting by its leadership with Minister for State, Petroleum Resources, Timipre Sylva and Group Managing Director of the NNPC Mele Kyari.
The PIB will now be harmonised by a conference committee of the Senate and the House before it is sent to President Muhammadu Buhari for assent.
Chairman of the House Adhoc House Committee on the PIB, Tahir Mongunu, while presenting the report said: “ This bill has suffered a chequered history and it is a bill that goes to the root of our economy because Nigeria is a country that depends on oil for its survival.
“The bill seeks to create a frontier exploration fund that is meant for oil exploration in the various basins in the country with a view to making more money for Nigeria.”
Addressing reporters on the development, Monguno said the bill will ensure transparency in the conduct of affairs in the oil and gas industry.
He added that the bill also created a commission that will be responsible for regulating the industry and an authority that will be responsible for day to day operation.
The NNPC, he said, will become a commercial company open to the public to invest in.
He also explained that 30 per cent of NNPC profit which he put at $275 million per annum, will be allocated to the FEF meant for exploration at the frontier basins.
The PIB was initiated during the administration of Olusegun Obasanjo in 1999 but successive sessions of the National Assembly failed to pass it.
Presenting the report of the Joint Committee in the Senate, the lead Chairman, Sabo Nakudu, argued that the five percent operational cost was recommended because the members believed it would go a long way to assuage the feelings and pains of oil-bearing communities.
Nakudu said: “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.
“Furthermore, to ensure adequate development of the host communities and reduction in the cost of production, the Joint Committee recommends five per cent of the actual annual operating expenditure of the preceding financial year in the upstream petroleum operations affecting the host communities for funding of the Host Communities Trust Fund.”
During contributions, some senators, including Deputy Senate President Ovie Omo-Agege , also spoke in favour of the five percent. But, others kicked against it.
Omo-Agege argued that while Niger Delta people wanted a deal, “a no-deal is better than a bad deal”.
He said: “Mr President, this bill, as originally conceived, provided only 2.5 per cent contribution by sector companies to the host communities trust fund. This is not the first experiment or first attempt.
“I will still make a case if possible that we go a little more than the five per cent already agreed.
“I understand we cannot meet the 10 percent. But that is the clamour at home. I need to plead that if there is a chance we can go a little more than the five percent, we will be grateful.”
Senators George Sekibo and James Manager joined Omo-Agege in pleading for a better deal for the development of host oil communities.
This was after Senator Ahmad Babba Kaita had proposed an amendment to the effect that if the contribution to host communities trust fund is pegged at three percent, government will ensure the security of oil firms’ equipment.
He added that if it is five percent, communities would be responsible for securing production equipment in their domain.
When this was put to a voice vote, the three percent sailed through.
Peeved by the development, Sekibo called for a division of the Senate, citing Order 73 of the Senate Standing Orders.
At that point, Senate President Lawan and Senate Leader Yahaya Abdullahi, prevailed upon him to withdraw the motion, in view of the “existing unity in the Senate.”
Spokesman of the Senate, Senator Surajudeen Ajibola Basiru, later explained that the three percent amounted to $502.8million annually.
In the House, the bill was passed without much rancour by members present. A few who had contributions to make could not as the Deputy Speaker, who presided did not to raise his head to acknowledge them.
The House included in the bill, an FEF which is to conserve fund for the exploration of oil in the various River Basins across the country. This was not initially a part of the bill.
Members also passed the bill with an amendment only to section 240 subsection 2 by increasing the 2.5 percent of actual operating expenditure of oil companies for host communities development to five percent.