OrderPaperToday – Concerns over the fate of host communities reverberated on Tuesday as the Petroleum Industry Bill (PIB) scaled second reading in Senate.

Senators expressed that the 2.5 per cent contributions from oil companies to the proposed host communities trust funds should not be from their operating cost as contained in the bill.

While some proposed that the contribution should be removed from the profit of the companies, others called for an increase of the percentage.

They equally proposed that the bill should look into environmental degradation and assist communities that are no longer producing oil.

The decade-long PIB has over time been delayed as result of denial of presidential assent as was the case in the last assembly or serial non-passage by previous assemblies.

The Senate President of the 9th assembly, Ahmad Lawan, had promised that the PIB will be passed before the end of the year.

The bill was submitted to the National Assembly late last month by President Muhammadu Buhari after months of expectations. It was promptly read for the first time after which Senate President, Ahmad Lawan, directed that copies be made available to all senators.

OrderPaper Nigeria has published full details and graphical analytics of the host communities provisions in the bill. Read and download the document here.

In presenting the bill for second reading on Tuesday, the Senate Leader, Yusuf Abdullahi, gave a background of the PIB after which senators took turns to make their submissions as captured below:

Sen. Omo-Agege canvassing for more funding for host communities
Sen. Omo-Agege

2.5 percent to host communities not enough— Omo-Agege

The Deputy Senate President, Ovie Omo-Agege, opposed the percentage allocated to the host communities trusts. He rather called for five per cent of operating expenses of oil companies to be allocated to the fund.

He said: “In the eight senate when we considered this bill, the percent for the host community is 10 per-cent but what I am seeing here is 2.5 per-cent. Mr. President, this is inadequate. We can take this to a percentage that is acceptable to everybody.

“I am going to propose that at a very barest minimum, we should go back to the five (5) per-cent of the operational expenses for the host community. Asking that this should be moved from 2.5 per-cent to five (5) per-cent is not inconsiderable.”

On gas flaring, he suggested that the penalty should be given to host communities and not paid to the federation account.

“I will like to point out that we still have issues of gas flaring. According to this bill, penalty for gas flaring is supposed to be paid into the federation account. Mr. President, if there is going to be penalty for gas flaring, it is only reasonable that the penalty should be used to ameliorate our conditions in that community. This should be looked into Mr. President”, he added.

Sen. Sekibo argues that PIB seeks convenience for extraction by companies than for the benefit of host communities
Sen. George Sekibo

Bill concerned more about extraction, not enough for host communities – Sekibo

Senator George Sekibo (PDP, Rivers) urged that host communities be adequately recognized in the bill while urging for a provision to cater for the clearing of their devastated environment due to activities of oil companies.

“The bill host community should be taken into cognizance. There must be a process of clearing the already devastated environment.

“There must be somewhere in the bill where it will consider already destroyed environment. Most of the provisions are okay. The environment area is not properly taken care of”, he said.

He expressed belief that the current PIB will “yield more money for the country and try to create conducive environment for businesses.”

Sekibo equally called on the government to diversify away from oil.

“20 or 30 years from now, the market may not be there. Operators may have pulled out. We need to think about of diversification. Even when oil is not sellable, the country can still survive”, he said.

Sen. Gershom Bassey says PIB will encourage IOCs
Sen. Gershom Bassey

PIB will stop IOCs from exploiting Nigeria— Bassey

Senator Gershom Bassey (PDP, Cross River) commended the current PIB noting that it will end exploitation from International Oil Companies (IOCs).

He said the bill will domesticate the entire value chain of the industry.

For him, the PIB along with the previously passed local content laws will revolutionize the oil and gas industry.

Sen. Utazi says presidents should not be ministers of petroleum
Sen. Utazi

Presidents should not be ministers of petroleum—Utazi

Senator Chukwuka Utazi (PDP, Enugu) canvassed that the head of state should not occupy the position of minister of petroleum resources as has been the practice over the years.

His submission was however countered by the President of the Senate, Ahmad Lawan who said: “If the president chooses to be the minister, it is within his powers”.

Utazi also noted that the delayed passage of PIB over the years is for a reason “because many operators don’t want us to pass it. Those that are benefiting from the loopholes, they will have other places to go.”

He urged committees saddled to look into the bill to ensure that it complies with international best practices.

Sen. Eremienyo calls for more benefits for host communities
Sen. Eremienyo

2.5 % for host communities should be charged from profit not operating cost— Eremienyo

Senator Biobarakuma Wangagha Degi Eremienyo (APC, Bayelsa) stated that the contributions from oil companies to host communities should be from profits earned and not operating costs.

He equally asked that a case be made for communities that are no longer producing oil.

“I believe that as a developing country, we cannot do without foreign investors. This bill is doing to restore the confidence of foreign investors.

“It is a herculean task for ordinary people to protect oil facilities. It is ambiguous. How do you determine what is due to a community that produces oil.

“I would recommend that if the 2.5 per-cent must be charged, it should come from the profit to the host communities.

“There are some oil facilities that are already dried and not producing. The people in that environment are in abject poverty. The bill should recognize communities that are no longer producing.”

According to him, the bill does not make reference to prevailing laws such as environmental regulation laws.

“”The Bill should also recognize communities that produced oil but are no longer producing. It is important for the host communities who are directly affected by the health hazards of petroleum to be carried along so they will not feel unjustly treated by the government”, he added.

Sen. Manager urges that public hearings on the PIB should be taken to the host communities
Sen. James Manager

Public hearings should be held in host communities—Manager

Senator James Manager (PDP, Delta) stated that public hearings should be held at the National Assembly as well as in the host communities.

“The obvious concerns are carrying along the host communities that are carrying the burden of hosting not just the oil facilities but the humans beings too who are operators.

“We should also have a very exhaustive public hearings not only in Abuja but before the people proper so that we get an aggregate view of what everybody is saying”, he said.

He also urged his colleagues not to hurriedly pass the bill as he advised that the gas sector should critically be examined.

“Oil may be relevant or not as it used to be but what about gas, it is the wealth of the future and it is fertile in that environment”, he said.

Sen. Adeola says PIB will encourage foreign investors into the petroleum sector
Sen. Adeola

PIB has more benefits—Adeola

Senator Adeola Olamilekan (APC, Lagos) submitted that the benefits are more than the disadvantages.

Highlighting them, he said: “There are a lot of investors who want to invest in this sector but they think we are not prepared but I think we are prepared. If we are able to pass this bill, we have made doing business in the oil and gas sector easy. The benefits of the bill are enormous.”

Sen. Gobir demands more for host communities
Sen. Gobir

Operating cost contribution to host communities not good—Gobir

Senator Ibrahim Gobir (APC, Sokoto) in his contribution noted that 2.5 per cent operating cost to be paid to the community will bring problem than good.

Like his other colleagues he suggested that the monies to host communities should be from the profit of oil companies.

Gobir also pointed out that environmental degradation should be given more attention in the bill.

After other contributions, Lawan tasked its Committees on Petroleum Downstream, Petroleum Upstream and Gas resources to work on the bill and revert to the chamber in eight weeks.


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