Associate Professor at Delta State University, DELSU, Abraka, Dr. Hilary Owamah, has said the Federal Government established Petroleum Industry Act, PIA, to tackle oil theft and hostile relationship between host communities and oil and gas companies, following the frustration of the 13 percent Derivation Fund, Niger Delta Development Commission, NDDC, and other initiatives.
Owamah, a Fellow of the Nigerian Society of Engineers, spoke on “The PIA- How best can the host community manage it for maximum benefit” at a one-day sensitisation workshop by Ministry of Oil and Gas at Asaba, Delta State. Commissioner for Oil and Gas, Emmanuel Amgbaduba, chaired the event.
He said the 13 percent derivation fund and NDDC created in 2000 with three percent of the total annual budget of oil producing companies as levy, Ministry of Niger Delta Affairs created in 2008 with a budget allocation of about N584.6 billion between 2008 and 2022, Presidential Amnesty Programme, PAP, for Niger Delta militants inaugurated in 2009 and other ingenuities by government nosedived.
Pointing out that the relationship between host communities and oil companies, over the years, had not been cordial, he said there was a suspicion that “the hostilities may have contributed to the massive theft of crude oil, vandalisation of pipelines and the incessant shutdown of major oil fields.
“The aim of the PIA is to create an environment conducive for the growth of the oil and gas sector and to address the legitimate grievances of host communities most impacted by extractive industries. The problem could have been the reason the Nigerian government cannot meet its OPEC crude oil production quota of about 1.8 million barrels per day in recent times.”
“The promulgation of PIA has now introduced the requirement for specified petroleum industry operators to establish a Host Communities Development Trust Fund, HCDTF, which overhauls the regulation and governance of the oil and gas industry by providing for two regulatory agencies, which are the Nigerian Upstream Petroleum Regulatory Commission, NUPRC, and the Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA, responsible for regulating their respective sector in the petroleum operations, and can sue and sued in their own name.
“The PIA provides that 30 percent of the profits of the NNPC Ltd will finance exploration in other basins in the country, called the ‘Frontier Exploration Fund’. Another provision of the PIA that aims to address the frosty relationship between oil companies and host communities is the creation of HCDTF, whose purpose will be to foster sustainable prosperity, provide direct social and economic benefits from petroleum to host communities, and enhance peaceful and harmonious coexistence between licensees or lessees and host communities.”
