Senate Passes PIB, Disagrees With Reps On Percentage For Host Communities

*New Law Gives Petroleum Minister Unlimited Powers To Regulate Sector

Fourteen years after the first attempt was made, the Senate and House of Representatives, yesterday, passed into law the Petroleum Industry Bill (PIB).

But it was not without controversy and drama as senators and House of Reps disagreed on what percentage host communities should get from crude oil drilled in their areas.

The bill had originally proposed 2.5 per cent Equity Share Holding for Host Communities but the joint committee on Petroleum Resources (Upstream, Downstream and Gas) recommended five per cent in its final submision.

While the House of Representatives raised the amount from 2.5 per cent to five per cent and passed the bill into law, senators from the northern part of the country rejected the five per cent recommended by its committee and insisted on three per cent.

Kaita Ahmed, representing President Muhammadu Buhari in the Senate, led the onslaught against the five per cent. Although senators who supported the retainment of the five per cent had their way when it was subjected to voice vote, Senate President, Ahmad Lawan, however, ruled contrarily.

The development led to a rowdy session as senators mainly from the south rejected the ruling even as Lawan tried without success to restore order.

Northern lawmakers, it was learnt, felt the allocation of five per cent would deprive other states of funds accruing from oil production in the Niger Delta even as they argued that three per cent was enough based on the briefing they got from Minister of State for Petroleum, Timipreye Sylva.

Senaor Albert Bassey, however, explained that the reason for recommending five per cent was to remedy unfortunate incidents that may affect the assets.

Dissatisfied with the decision of the Lawan-led morthern senators, George Sekibo from Rivers State raised a Point of Order. He cited Order 73, which challenges the ruling of the chairman (Mr Lawan), and requires that he put the question to vote a second time. And should his opinion be again challenged, he should call each senators name to vote.

Leader of the Senate, Yahaya Abdullahi, called on Sekibo to step down the request for individual senators’ names to be called to vote on the issue. Lawan also appealed to Sekibo to step down the request.

“This three per cent, at least the Senate did not pass 2.5 per cent, we passed something slightly higher than that. I appeal to Sekibo to withdraw the point of order. We should not insist on dividing the Senate. It is our right,” Lawan said.

In withdrawing the call for a head count, Sekibo said the decision was against the interest of the country.

Deputy Senate President, Ovie Omo-Agege, appeal to his northern colleagues to retain the five per cent also crashed.

The senate went ahead to approval a Host Community Trust Fund, which would be anchored by oil and gas companies operating in the host communities for the three per cent.

There is, however, the fear that host communities in the Niger Delta may only get a meagre share of three per cent if the figure is not harmonised by both chambers.

The Senate, however, approved a 30 per cent funding mechanism for Nigerian National Petroleum Corporation (NNPC) profit to fund exploration of frontier basins in parts of the country where search for crude oil in commercial quantity is ongoing.

There is an ongoing search for oil in commercial quantity in some northern states but no search in any part of the 17 southern states.

The Bill has also empowered the Minister of Petroleum to exercise certain supervisory powers in the management of the oil and gas sector.

The Bill states that the Minister shall “formulate, monitor and administer government policy in the petroleum industry, exercise general supervision over the affairs and operations of the petroleum industry in accordance with the provisions of this Act, report developments in the petroleum industry to the government, represent Nigeria at international organisations on petroleum matters, promote an enabling environment for investment in the Nigerian petroleum industry,

The Bill also unbundled the NNPC into two commercialised corporation.

“There is established the Nigerian Upstream Regulatory Commission (the Commission) which shall be a body corporate with perpetual succession and a common seal. There is established the Nigerian Midstream and Downstream Petroleum Regulatory Authority (the Authority), which shall be a body corporate with perpetual succession and a common seal. The Authority shall have the power to acquire, hold and dispose of property, sue and be sued in its own name.

“The Authority shall be responsible for the technical and commercial regulation of midstream and downstream petroleum operations in the petroleum industry. The objects and functions of the Authority in this Part are limited to midstream and downstream petroleum operations in the petroleum industry.

The objectives of the Authority shall be to regulate midstream and downstream petroleum operations, including technical, operational, and commercial activities; ensure efficient, safe, effective and sustainable infrastructural development of midstream and downstream.”

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