Eniola Akinkuotu and Leke Baiyewu
5 July 2021
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The quests for oil in the North and other parts of the country, including Ogun and Anambra states, have received a huge boost in the recently passed Petroleum Industry Bill which will regulate the oil sector if signed by the President, Major General Muhammadu Buhari (retd.), findings have shown.
Currently, crude oil is obtained from eight states in the Niger Delta region which include: Abia, Akwa Ibom, Bayelsa, Delta, Edo, Imo, Ondo and Rivers states.
Based on Section 9 of the PIB, at least 30 per cent of the profit generated by the proposed Nigerian National Petroleum Company Limited will go to the exploration of oil in ‘frontier basins’.
Although the proposed law doesn’t identify the frontier basins, a statement by the President in 2019 identified the frontier basins as Chad Basin, Gongola Basin, Anambra Basin, Sokoto Basin, Dahomey Basin, Bida Basin and Benue Trough.
Besides northern states, Ogun State, whose Tongeji Island is in Dahomey Basin , will benefit from the new policy. Anambra State, with Anambra Basin, will also benefit.
The 19 northern state governments had in 2016 intensified their search for oil and gas in the region with the appointment of a British firm to carry out the exploration activities which was sequel to Buhari’s directive to the Nigerian National Petroleum Corporation to increase the tempo of the crude oil find in the North-East.
The Chairman, Northern Nigeria Development Company, owned by the 19 northern state governments, Mallam Bashir Dalhatu, had said the British company had commenced its prospects for oil and gas in the Lake Chad and Benue basins, using the services of the British company.
Dalhatu had said, “We have engaged a British company that is already working in the Lake Chad region and from Niger and Chad side in the same area with us and we have been meeting with the Nigerian National Petroleum Corporation in order to put efforts together.
“The Federal Government has also re-emphasised to us, during those meetings, its total support for exploration and exploitation of oil and gas in the North-East of the country.”
With the passage of the PIB, however, the oil exploration move of the 19 northern governors has received a huge boost.
Section 9(4) of the PIB reads, “The frontier exploration fund shall be 10 per cent of rents on petroleum prospecting licences and 10 per cent on petroleum mining leases; and 30 per cent of NNPC Limited’s profit oil and profit gas as in product sharing, profit sharing and risk service contracts. The fund shall be applied to all basins and undertaken simultaneously.”
Section 9(5) adds, “NNPC Limited shall transfer the 30 per cent of profit oil and profit gas to the frontier exploration fund escrow account dedicated for the development of frontier acreages only.”
The PIB also makes provision for the establishment of a Nigerian Upstream Regulatory Commission which will be responsible for the technical and commercial regulation of upstream petroleum operations and also promote the exploration of frontier basins in Nigeria
PIB passed by National Assembly, a sham, it’s like robbing Peter Paul – Rep
Meanwhile, the lawmaker representing Degema/Bonny Federal Constituency in Rivers State at the House of Representatives, Farah Dagogo, has condemned the PIB
Dagogo, a member of the Peoples Democratic Party, in an interview with journalists on Sunday, said the PIB “has been received with mixed feelings by some prominent personalities in the Niger Delta.”
While noting that the bill, when it becomes law, would revolutionise the petroleum sector to be competitive for economic development, the lawmaker said he had reviewed the objectives of the bill and discovered some irregularities.
Dagogo said, “A critical analysis and review shows that the bill passed leaves more questions than answers for resolving the gamut of challenges associated with the petroleum industry, which first governing law was enacted in 1969.
“So, the answer to your questions, with all intents and purposes, is that the core content of the passed bill could be regarded as a sham and a bogus display of an infamous fluke orchestrated by the majority against the minority, whose land and people are afflicted amidst affluence.
“It demonstrates the unending reasons for the vociferous calls for restructuring because of disorder and injustice that currently permeate the Nigerian state. Indeed, it was a ploy to further rob Peter and pay Paul.”
When asked about the grey areas in the PIB, the lawmaker said, “A critique of the passed bill shows some enervating factors that are highly disturbing: First, the Senate’s reduction of compensations payment for host communities from 5 per cent to 3 per cent, against the cries and appeals of southern senators; second, the redefinition of host community to mean any “community that oil pipeline passes through.”
“By implication, host communities will now imply (that) all states that do not even produce oil but have oil pipelines passing through them. Before now, host communities were communities that produce oil or have petroleum facilities/installations in their land.”
Dagogo added, “The passed bill also has a jargon known as ‘Frontier Exploration’ for which the bill has provided 30 per cent of NNPC profits to be servicing these ‘Frontier Explorations’ yearly. This, I dare say, is over-ambitious and very unsustainable. My constituents interpret this to mean that a certain percentage of revenue, say hypothetically 30 per cent from mines or gold from the North is set aside for gold and mine exploration from the ocean in the South.
“How do you justify this bare faced farce? You get the point? It is just another avenue of exacerbating corruption and appears to be a desideratum to fraud. This does not guarantee the fiscal direction and original intent of the bill, which seeks to provide legal, governance, regulatory and fiscal framework for the Nigerian petroleum industry and the development of host communities.”
The lawmaker noted that while development of host communities was visibly and conspicuously displayed in the long title of the PIB, which consequently gave direction to the problems the bill intended to resolve, “the National Assembly, dominated by the All Progressives Congress, has negated that trust; and the upper chamber (Senate) wherein the bill originated from, surreptitiously decided and wittingly, they changed the order and concocted a discordant view, which could be regarded as an anathema to natural justice.”
When asked about efforts by the minority caucuses to protect their interests in the PIB, Dagodo said, “The bill as passed is a perpetration of the existing oligarchic spirit fanned by the colonial masters. The challenges that led to Sir Willick’s Commission of Inquiry on the minorities are still very fresh and the ghost still chases modern Nigeria. It is still very inherent in the Nigerian system and PIB has exemplified it.”