Senator Matthew Urhoghide, representing Edo South senatorial district in the Senate, has said some people, out of ignorance or mischief, were propagating wrong information different from the facts and provisions of the newly-passed Petroleum Industry Bill (PIB) by the National Assembly.
Urhoghide, who expressed surprise at the misinformation, stated the PIB did not stipulate equity shareholding for host communities, but the percentage of operational cost of the oil companies for which the Senate passed three per cent, yet people were turning facts upside down.
He further clarified that exploration activities at the Frontiers Basins were not targeted only at the northern part of the country, as frontier basins exist in other parts of the country.
His words: “The PIB does not entertain equity shareholding for the host communities. Rather it has provisions for a percentage of the annual operational cost of the oil companies to which the Senate passed three per cent and the House of Representatives passed five per cent.
”At the conference, which will harmonise this, we hope five per cent will be approved in the harmonised version.
“Also, the host communities are entitled to all the amount realised as a penalty for gas flaring because these communities bear the brunt of such activity and so the money will be used for their wellbeing.
“Now coming back to the issue of the three per cent or five per cent, this has to do with the consideration given to the investors in this industry. As it is today, many investors are not interested in investing in Nigeria because of the high operational costs.
“A profound argument has been put forth to substantiate this. It is because of this that we have not had new investments in upstream activities in the last five or more years. The case of Venezuela is a good example.
“In the consideration of fiscals as far as the PIB is concerned, we must put all considerations together so that it is a win-win situation for all stakeholders. If we are not competitive in the international space, the investors will certainly look elsewhere to invest and our oil reserves will be underground, even in the face of the foreseeable irrelevance of crude oil where the world is moving in the direction of fossil fuel and renewable energy.
“To even put figures to these percentages, a three per cent of the operational cost of the settlor or oil companies is expected to rake in about 500 million dollars a year into the Host Communities Development Fund.
“Five per cent will rake in excess of 850 million dollars a year for the host communities fund.
“The much talked about 30 per cent for Frontier Basins exploration activities is what comes from profit in oil from NNPC Limited that will be created by the provisions of the intended law.
“This amounts to about 350 million dollars a year. This is expected to be used to develop new acreages within the frontier basins. Another point of correction is that frontier basins exist all over the country presently, not only in the North of Nigeria.
“Today, we have a frontier basin in the South-East, we have a frontier basin in the South-West and could still be found in the South-South where crude oil will be explored or prospected.
“It amounts to lack of information, knowledge, or sheer mischief to bandy wrong information in the public space when the actual facts and provisions in the Bill are different.
“Ten per cent was suggested for host communities when the Bill was considered during the administration of President Umaru Yar’Adua. The realities then are certainly different from what is obtainable today.
“We need to be objective in the consideration of international economic activities that are strictly beyond our control or in the prevailing circumstances. The oil and gas industry is ruled by international best practices,” he added.
SOURCE: vanguardngr.com