…As NNRC commends NASS efforts in passage of PIB***
The Major Oil Marketers Association of Nigeria (MOMAN) says the Petroleum Industry Bill (PIB) should formally address issues between International Oil Companies and their host communities.
Mr Tunji Oyebanji, Chairman, MOMAN highlighted this on Friday in Lagos, stressing the gesture would help to curb oil theft, pipeline vandalism and reduce the cost of crude oil production.
Oyebanji noted that the recent Public Hearing on the PIB, conducted by the National Assembly, was a step in the right direction.
He expressed optimism that the bill would soon be passed into law.
He said: “The PIB is looking at what the share of the host communities will be and if you make a law stating what will be provided for host communities, incidents of pipeline vandalism and oil theft will reduce.
“The PIB should formalise the relationship between the IOCs and host communities.
“Presently, what we find is that the oil companies, especially IOCs, are taxed with the petroleum profit tax and other royalties which are very substantial.
Also read: Nigeria to get more oil revenue with PIB – Lawan
“So, when the host communities go and meet them for assistance, they will decline because they feel they are paying so much in royalties and taxes to the government.
“They expect the government to provide infrastructure such as schools and hospitals to these host communities.
“But the host communities will be confronting the companies because they are the ones on ground, carrying out production activities.’’
According to him, by the time the burden of taxes, royalties and taking care of the host communities are put on the IOCs, it will drive up the cost of oil production in the country.
“These are some of the things driving up the cost of production which makes it unattractive at the end of the day.
“So, the people who have choices and alternatives on where to go and invest their money will simply go to other countries to invest,’’ Oyebanji said.
He also said that there was a need for further engagement of all stakeholders in the industry.
MOMAN chairman noted that this would ensure that the PIB, when passed into law, would achieve its goals for the sector.
In a related development, the Nigeria National Resource Charter (NNRC) has however commended recent efforts by the National Assembly, toward ensuring the passage into law of the protracted Petroleum Industry Bill (PIB).
The NNRC, a non-profit policy institute that promotes effective management of natural resources for public good, made the commendation in a statement issued by its Programme Coordinator, Ms Tengi George-Ikoli on Friday in Lagos.
George-Ikoli said both the Senate and the House of Representatives had demonstrated commitment toward the passage of the PIB with the recently concluded public hearings.
According to her, there is need to ride the momentum and get all stakeholders on board to achieve what undoubtedly will be the most profound piece of legislation for the transformation of the Nigerian economy.
She noted that the NNRC had consistently highlighted the weaknesses in two significant aspects of resource management in Nigeria.
George-Ikoli said they were the contentious issues surrounding the management of host communities impacted by extraction and the management of the Nigerian National Oil Corporation (NNPC).
“The NNRC urges the Federal Government to finally resolve the pervasive issues facing the petroleum sector.
”The Federal Government is encouraged to do this to ensure that Nigeria will be able to meet global best practices and also to effectively ‘identify, explore, account for, mitigate or compensate for the negative effects of extraction at all stages of the project cycle,” she said.
George-Ikoli said this would enable the country to run a National Oil Company (NOC) that was effective, accountable, with well-defined mandates and an objective of commercial efficiency.
She also urged the government to prepare for the future by earnestly refocusing the country’s energy policies to accommodate present realities with emerging developments in global energy consumption.
The programme coordinator noted that the NNRC had made key submissions in its memoranda to the national assembly advocating that the PIB provided clarity on capitalisation of the NNPC.
She said this would enable the corporation to adapt a commercially focused framework that allowed it operate in a competitive space.
According to her, the NNPC should explore the possibility of an Initial Public Offering (IPO) with more private sector and possible citizen participation as practised in other countries.
George-Ikoli said this would also allow for meaningful participation of host communities in decision making in managing trust, at the Board of Trustees and Management Committee, to engender conducive operating environment.
She said: “The PIB should ensure mechanisms for dispute resolution are accommodated to address conflicts that may arise in the determination of host community entitlements.
“It should liberalise the midstream and incentivise gas investments by not legislating the base gas price, but instead, allowing it be determined by the practical framework that considers cost of production and pipeline transportation.”