ARISING from a meeting in Lagos on Monday, governors from the southern part of the country rejected the proposed three per cent share of oil profits for host communities in the Petroleum Industry Bill (PIB), including the suggested ownership structure of the Nigerian National Petroleum Corporation, (NNPC).
The governors accepted five per cent share of oil profits for host communities and insisted that the NNPC should not be vested in the Federal Ministry of Finance as proposed.
They said the state oil company should be held in trust by the Nigeria Sovereign Investment Authority ‘since all tiers of government have stakes in the vehicle.’
The passed PIB has generated controversies, with several industry analysts insisting that both the upper and the lower legislative chambers must address those concerns before the final submission to President Muhammadu Buhari for assent.
Both the Senate and House of Representatives passed the bill last week, but with disagreements, especially over the percentage that should be allocated to host communities.
In a communique issued and signed by Ondo State Governor and Chairman of the Southern Governors’ Forum Rotimi Akeredolu, the chief executives of the states in the region said five per cent share would represent equity and justice for host communities.
“The forum commends the National Assembly for the progress made in the passage of the PIB; the forum rejects the proposed 3 percent and supports the 5 per cent share of the oil revenue to the host community as recommended by the House of Representatives.”
According to the communique, the forum rejected the proposed 30 per cent share of profit for the exploration of oil and gas in the basins. The proposed 30 per cent share of profit for the exploration of oil and gas in the basins has generated controversies. The reason is that it would benefit several non-oil states that are simply prospecting for the commodity.
Leader of the Pan-Niger Delta Forum (PANDEF) Edwin Clark, in his reaction, said that the bill was satanic, unjust, embarrassing, and had dashed the hope of the people of Niger Delta.
Clark, who is the leader of the Southern and Middle Belt Leaders Forum, condemned the provision and allocation of 30 per cent of profits for further frontier oil exploration in the North, stating that it was fraudulently added.
However, former member of the Nigerian Extractive and Transparency Initiative (NEITI) Faith Nwadishi told The ICIR that the law makers had overlooked the environment in the entire conversation.
“We should also try not to be sentimental about the 30 per cent set aside for the frontier basin from NNPC profit. We should also be more worried that such huge amount is not targeted towards clean and renewable energy since that is where the world is moving towards now,”a former member of the Nigerian Extractive and Transparency Initiative (NEITI) Faith Nwadishi told The ICIR.
Professor of Energy Economics at the University of Ibadan Adeola Adenikinju told The ICIR that Nigerians should beware of throwing away the baby with the bath water with their definition of what the frontier basin was.
He said that the bill, which had been in the works for over 13 years now, when signed into law, would help Nigeria have a national oil company that would compete with Saudi’s Aramco and other national oil companies that were already doing well globally.
“The bigger picture is that it is going to remove regulatory and fiscal uncertainties. We should not let the desire for what is perfect take us away from where we are currently,” he said.
THE ICIR reports that Nigeria has lost huge investments in billions to other African countries for not having a fiscal framework that regulates Nigeria’s oil and gas sector.
According to Timipre Sylva, before the passage of the bill, Nigeria had only been able to get $3bn from $50bn investment into Africa due to lack of a fiscal and regulatory framework guiding operations of Nigeria’s most important resource.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.