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Tag: PIB

  • PIB: Why host community fund was created

    PIB: Why host community fund was created

    The Petroleum Host Communities Fund (PHCF), contained in the draft Petroleum Industry Bill (PIB), which prescribes 10 per cent of the net profit of upstream oil companies to be paid into the fund, has drawn the ire of the North. What is PHCF and why was it provided for in the PIB? EMEKA UGWUANYI examines the provision.

     

    To say that the Petroleum Host Communities Fund (PHCF) has been controversial lately is an understatement. The controversy peaked when stakeholders felt the PIB may be stalled following the stand of the North on it. The North insists that the way the PIB is structured won’t benefit them and would use their majority strength in the legislative chamber to stop the bill. Although the bill has scaled the second reading, it is still has a long way to go to become an Act.

     

    What is PHCF

    Petroleum Host Communities Fund is contained in section 116 of the PIB. The bill in section 117 states that the fund shall be utilised for the development of the economic and social infrastructure of the communities within the petroleum producing communities.

    In section 118(1), it further states that “each upstream petroleum company shall remit, on a monthly basis, 10 per cent of the net profit as follows (a) for profit derived from petroleum operations in onshore areas and in the offshore shallow water areas, all of such remittance directly into the PHC Fund; (b) for profit derived from upstream petroleum operations in deepwater areas, all of the remittance directly into the Fund for the benefit of the petroleum producing littoral states.

    Sub-section (2) states that ‘net profit’ means the adjusted profit less royalty, allowable deductions and allowances, less Nigerian Hydrocarbon Tax less Companies Income Tax.

    Subsection (5) states “where an act of vandalism, sabotage or other civil unrest occurs that causes damage to any petroleum facility within a host community, the cost of the repair of such facility shall be paid from the PHC fund entitlement, unless it is established that no member of the community is responsible.

     

    Experts’ views

    Ms Efuru Nwapa-Obua, a Petroleum Law and Policy solicitor, who examined the issues with the PHCF, said the provision is laudable if well implemented as it would radically transform the oil producing communities, which have been yearning for development.

    She said: “This key and novel provision effectively confers the status of equity stake holders on the oil producing states. If implemented it will radically transform the oil producing communities in terms of infrastructural, social and economic development, create employment, check youth restiveness and lead to overall sustainable development.

    “It also places a responsibility on the oil producing communities to protect the facilities in their areas and introduces a sanction in the event of vandalism and destruction of property. This system of reward and punishment will no doubt check the wanton and reckless acts of vandalism in the oil producing communities given that no community will want to lose its benefits.

    A top official of the Nigerian National Petroleum Corporation (NNPC) who spoke in confidence, said the fund will effectively address job creation and security of oil facilities in the oil producing communities. The official noted that the idea of the fund was initiated by late President Musa Yar’Adua.

    The official said: “The oil community fund – is a fund that was initiated during the time of late President Yar’Adua. The intention is good and we strongly felt we should carry it over, in the sense that we strongly believe it would create more jobs. More jobs in the sense that the host community will become part of the stakeholders in the oil and gas industry and their core responsibility will be to ensure the security of infrastructure and facilities in their areas. And in the event of any vandalism of the infrastructure, the benefit they will get will not be given to them.

    “We are not saying that the cost of what we give to them versus the cost of infrastructure damaged is equal, but it would serve as a deterrent and ensure that act of vandalism is not done within the neighbourhood and then the community doesn’t have the benefit.

    “What it would do for us is that it would move the JTF back to the barracks to enable them do their core function. Assuming we have 200 JTF members within the Niger Delta, it would create at least 200 jobs for the community by the time they (JTF) members go back to the barracks.

    “The PHCF would create jobs for the communities to continue to secure these facilities, they wouldn’t sit down in their houses, they would have to get people to do this security jobs to ensure that they spend part of their money to be able to get more money.

    “It will significantly help in mitigating the current environmental degradation in the Niger Delta. In addition, new frontiers will not have to go through the pains in the Niger Delta as their predecessors because from day one, the host community is part of the oil and gas industry.

    “Under the current Petroleum Act, regulation is being done by the Minister without any consultation. But in the current PIB, for you to do a regulation, you need to do a public entry either it is a private document that is contributed for a change or a Ministerial document that shows you want to make a change. That document will be debated in a public forum and based on the outcome of that, the regulation will be enforced. This is one area the power of the minister is significantly reduced compared to what we have in the Petroleum Act.”

  • PIB: North’s opposition is an insult, says Uduaghan

    PIB: North’s opposition is an insult, says Uduaghan

    The opposition by the North to the proposed Petroleum Industry Bill (PIB) is an insult to the oil producing states, according to Governor Emmanuel Uduaghan.

    Governor Uduaghan, reacting to the opposition by Northern states to the provision of additional funds for oil bearing states in the bill, said “leaving it at 10 per cent royalty is really a big concession by the oil-producing communities.”

    “We have moved from the stance of 100 per cent derivation. Ideally, what we should be talking about is not even 100 per cent derivation. We should be talking about leaving the oil for the oil-producing communities and then ask them to pay taxes to the federal government”he told The Nation in an interview in Asaba.

    He said: ” That has been the argument but with time and by sensitivity, we have moved to say, okay, let us leave it at 50 per cent. And that’s what some of us believe in.But if the PIB is now saying we should just improve on it by only 10 per cent royalty to the oil-producing communities, it’s a big concession.

    “I don’t think that it’s something that any group of persons should be quarrelling about. We’ve had times in this country when derivation was 100 per cent. At that time the oil-producing communities did not grumble. Now that it is oil, people are grumbling. What I will appeal to the rest part of Nigeria is that there should be understanding because when the people in the oil-producing communities are happy, they provide an enabling environment for more oil and gas to be produced.

    “And the more gas and oil produced, the more revenue that comes to the federation. And the more these non-oil-producing communities will benefit. That is the basic truth. And if we have to do something extra to make people in those areas provide an enabling environment for more production, we should do it.

    “In any case, even with the 10 per cent we are talking about, we are even thinking of how it should be managed. There are countries where when such monies are paid, they are put into the trust funds. It is the interests that accrues from the trust funds that are used by the communities. Some of us have made various suggestions on how to do this. I think we should be thinking of how to handle the 10 per cent, not that it should not be paid at all. I think it is unfair to the oil-producing communities. I think it is also a big insult to me when some people are saying I have no right to ask for 10 per cent royalty. It’s an insult and very ridiculous.

    “We agreed that the PIB is the best way to move forward apart from the 10 per cent. For goodness sake, let us not take certain persons for granted. Taking the Niger Delta for granted for so many years has brought us to where we are today. I don’t think we should worsen the situation that is on ground.

    “If the money comes and questions are being asked how the money is being spent, it is the people from that area who should be asking their leaders this question. Our people would not go to Kano to ask how the Kano State government is spending its money. They would not do that. So, why would they come here to ask me how I’m spending the money? I find it, to say the least, very unacceptable.”

  • PIB, fuel subsidy, Dana crash reports top Senate’s agenda

    PIB, fuel subsidy, Dana crash reports top Senate’s agenda

    Reports on Dana Air crash, Petroleum Industry Bill (PIB), fuel subsidy probe, Niger Delta Development Commission 2013 Appropriation Act and Public Procurement Act, among others, will receive priority attention this year, Chairman, Senate Committee on Rules and Business, Solomon Ita Enang, has said.

    Enang spoke yesterday in Abuja on the activities of the Senate from September to December last year and the area of focus this year.

    He dispelled rumours that the PIB would not be passed by the Senate, adding that the issues raised in the media concerning the PIB would be considered during the second reading.

    Enang said: “You will see it (PIB) in the notice paper when we publish it. A Bill sees the light of the day when it is listed on the floor of the Senate to be considered.

    “So, the contributions that are being made by Senators are intended to heighten interest in the Bill, enlighten the public more.

    “We will take all the contributions into account when considering the Bill for second reading in taking decisions on it.”

    On whether the Executive submitted the budget of the  Securities and Exchange Commission (SEC), the lawmaker said: “I had mentioned earlier that the President submitted to all of us and to the National Assembly along with the national budget, the budget of the statutory corporations.

    “And this is one of the things we will give priority to as we resume and the budget of SEC and others are contained in it. What we said in that clause of the Bill, which we have forwarded is that there should not be any implementation, except as would be approved. Just an emphasis.”

    The House of Representatives refused to pass SEC’s budget, because the commission’s Director-General, Ms Arumah Oteh, was not sacked as the lawmakers demanded.

    However, speaking on the performance of the Senate during the review period, Enang said 163 new Bills were presented and considered. These include 25 Executive Bills; the others are private member Bills.

    He added that 32 Bills were read for the second time and referred to committees.

    He said the Senate passed 15 resolutions. The five Bills passed include this year’s Appropriation Bill, the National Automotive Council Act (repeal and re-enactment), the Money Laundering Act (amendment), the Terrorism Act (amendment), and the Prison Act (repeal and re-enactment)

    The Senate also confirmed 10 executive nominations.

    The President has assented. The five Bills that were passed by the Senate, Enang said: “No. What you have there are Executive Bills, not members’Bills. There is another document containing Senators’Bills. We had to draw a distinction.

    “Most of them have been passed and when we pass them we forward them to the House of Representatives for concurrence. Remember that in the case of the nine universities, we set up a Conference Committee, but our colleagues and brothers in the House of Representatives were yet to set up theirs. But I believe they would have set it up and we are working on reconciling the differences in the Bills so they can be passed.

    “Remember that some days ago, the Federal Executive Council met and approved three new universities, which Bills would soon be presented to the National Assembly. We would be working in such a manner as to perhaps avoid a situation where the three new universities come to join the ones already with us.

    “So, definitely they were passed by us, but we are waiting for conference reports.”

  • Forces against PIB

    Forces against PIB

    The Petroleum Industry Bill (PIB) was born in crisis. The crisis keeps growing despite all efforts to resolve it. At a time, it was the oil companies against the government. Now lawmakers from the North have picked up the gauntlet against the bill, which is before the National Assembly. Will the bill be passed by the Assembly? asks EMEKA UGWUANYI, Assistant Editor (Energy).

     

     

    The Petroleum Industry Bill (PIB) was conceived over 10 years ago by – wait for it- a Northerner, Dr Rilwanu Lukman, former Minister of Petroleum Resources. Lukman saw something good in intiating the bill, but today the North is kicking against it, claiming that it is lopsided.

    The PIB is based on the report of the Oil and Gas Reform Implementation Committee (OGIC) set up by the Federal Government in 2000 to carry out a comprehensive reform of the oil industry. The OGIC was charged with making recommendations for a far-reaching restructuring of the oil and gas industry. The committee was chaired by Lukman, who was then the Presidential Adviser on Petroleum and Energy.

    Lukman describes the PIB as a reform legislation designed to encapsulate the legislative and administrative instruments governing the petroleum industry in one omnibus legislation establishing clear rules, procedures and institutions for the industry.

    There are 16 laws guiding operations in the oil and gas industry, which have been brought as one document under the PIB. Besides, some loopholes found in these laws were as much as possible plugged in the PIB.

    The main laws brought under the PIB are the Petroleum Act 1969 (as amended), Petroleum Profits Tax Act 1959 (as amended), and Nigerian National Petroleum Corporation Act of 1977 (as amended). These, and practically every other law regulating the sector, needed to be updated to reflect the changing dynamics of the oil and gas industry worldwide.

    In a presentation at a stakeholders’ session in 2009, Lukman said: “The Nigeria Petroleum Industry Bill is a remarkable document, which contains most of the legal requirements that will apply to the petroleum industry in Nigeria.

    “The PIB combines 16 different petroleum laws in a transparent and coherent document. This is the first time that such a large scale consolidation has happened anywhere in the world. Good governance is promoted through the removal of much of the confidentiality as well as creating transparency.

    “Confidentiality encourages corruption. The best way to fight corruption is to remove confidentiality for all procedures, contracts and payments. Every Nigerian, including stakeholders, should have the right to know what is going on. The bill removes confidentiality on a scale not seen in the world before. Nigeria will move in one step from one of the most opaque petroleum nations in Africa, to one of the most open and transparent in the world.

    “The texts of all licences, leases and contracts and any of the changes to such documents will no longer be confidential. Payments to the government of Nigeria will be public information. All petroleum geological, geophysical, technical and well data will be accessible for all interested persons in a national data base.

    “The proposed bill will result in a significant increase in transparency. From now on, petroleum prospecting licences and petroleum mining leases can only be granted by the Minister through a truly competitive bid process. Such process will be open and accessible to all qualified companies.

    “Every company involved in the upstream petroleum industry will be subject to the same system of rents, royalties and taxes, depending on whether they operate in the onshore, shallow or deep offshore or inland areas.

    “This means it will not be possible under the bill to treat certain companies more favourably than others. Nigerians can only fully benefit from their petroleum resources, if there is a sound petroleum administration.”

     

    Criticisms

    Despite the intellectual and technical input from some of the industry’s best hands, the bill has not been well received in some quarters. Some industry operators also criticised it. When efforts were being made to see if the bill would be passed into law during the Sixth National Assembly, it was dogged by all manner of allegations. Some alleged that the operator companies – mostly the multinationals – influenced members of the National Assembly to stall the bill’s passage.

    The Sixth Assembly organised a public hearing so that it could hear first hand from stakeholders. That was not to be as it was alleged that there were several versions of the bill. It was alleged that the copy of PIB submitted to the National Assembly then was that of NNPC. At the end of the day, the Sixth Assembly’s tenure ended without the bill’s passage.

    The multinational oil firms have continued to kick against the perceived contentious provisions in the bill, especially the fiscal terms. They claim that the benefits the government wants from operations are so high that if the bill is passed in its present state, they would be running their business at a loss. It is because of this that they are opposed to the bill.

    Other issues in the bill that operators frown on include undue powers conferred on the minister of Petroleum and some conditions attached to acreage leases to oil firms. These and other issues that border on downstream sector are what the government was trying to resolve before Northern lawmakers joined the fray.

     

    Mounting opposition

    Reports have it that the lawmakers are opposed to the bill beause of the alleged establishment of the Host Community Fund, said to give oil producing states dominance, especially the Southsouth states over their northern counterparts. Besides, they claimed, the north would pay more for petroleum products if the bill is passed in its current state, among other issues.

    The lawmakers’ position, according to reports, is hinged on the consensus reached by the Northern Governors Forum, Northern Caucus in the House of Representatives and the Northern Senators Forum. The consensus is based on the report of an independent assessment of the bill by a consultant employed by the group to examine the bill and its effect on the North when passed into law. The consultant’s report was considered favourable to the regions, hence the north’s opposition to the bill.

    According to reports, all the complaints raised against the PIB were contained in a single document. The document showed that the North may not benefit from oil and gas revenues as it does now.

    The document reads: “On top of the 13.5 per cent statutory derivation from the Federation Account, the mandatory Federal budgetary allocation to the Ministry of Niger Delta, Niger Delta Development Commission (NDDC) levy of three per cent of oil operations and the massive amount of federal funds being spent on the Niger Delta Amnesty programme, the new PIB is adding 10 per cent of the profit of all oil and gas companies to the Niger Delta States and Communities.

    “Currently, without this new addition, four states (Akwa Ibom, Bayelsa, Delta, and Rivers) earn more than the 19 Northern states combined. One wonders what kind of federation we would end up with, if this situation is escalated by the new PIB. In any case, what really is the constitutional standing of this particular provision in the Bill?”

    The northern caucus should also put into consideration that producing oil communities directly bear the brunt of exploitation both the people and the environment. Besides, after over 50 years of oil production and export, most of these communities lack basic infrastructure and social amenities. The northern lawmakers or caucus, if they see the country as a true federation, should endeavour to compel governments at all levels to develop these communities and improve their standard of living considering the contribution they make to the country.

    The position of the North on PIB was confirmed by the Chairman, Senate Committee on Housing, Senator Bukar Abba-Ibrahim, who said the region is opposed to PIB beacuse of the provision of additional 10 per cent revenue for oil producing communities.

    He said: “The additional revenue is unecceptable because the oil producing communities have the Federal Government’s take home, the Niger Delta Development Commission’s (NDDC) over N500 billion for projects in the oil producing communities, the Niger Delta Ministry with over N400 billion allocation and oil companies’corporate social responsibility programmes.”

     

    Finding the way out

    Following criticisms of the bill by operators and other stakeholders, the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, raised a committee to harmonise various groups’ interests in the bill to make it acceptable to all.

    Critics took her up for this, but Mrs Alison-Madueke said she was only reacting to public demand for more transparency in the industry, which the PIB stands for.

    She said the committee was established to ensure a speedy passage of the bill. She said: “Though the members of the OGIC did a good job, we have all seen that the bill lacked the requirements of the Sixth Assembly and needed to be redefined, and gingered up for speedy and very expedient passage by the Seventh Assembly. As a matter of fact, you are all also aware that at the end of the Sixth Assembly, there was more than one version going around. So, the government expects that the committee will put up all the indices in place to redefine the bill, look at certain sections and include strategic aspects so that we can get it right.”

     

    The Panel

    Senator Udoma Udo Udoma headed the task force, which members comprised Senator Tunde Ogbeha, Senator Emmanuel Agboti, Senator M. T. Liman, Hon. Chibudom Nwuche, Hon. Abdullahi Gumel, Hon. Habeeb Fashinro; and Comrade Peter Esele, President, Trade Union Congress. The Minister said at the inauguration of the committee: “We have listened to the voices of the people of Nigeria, when over the last few weeks, they spoke in unison for accelerated reforms in the oil and gas industry. These reforms will anchor on a new PIB. The special taskforce is saddled with speeding up the process of re-drafting the PIB.”

    The minister also inaugurated a technical committee consisting of experts in the industry to assist the special taskforce. The Technical Committee chaired by the Director, Department of Petroleum Resources (DPR), Osten Olorunsola had Chief Sena Anthony, Alhaji Umar Abba Gana, Mr. George Osahon, Mallam I.D.Waziri, Mr Victor Briggs, Dr. Francis Adigwe, Mr. Victor Oyenkpa and Mr. Seyi Bickersteth as members.

     

    Benefits

    Mrs Alison-Madueke said when the bill is passed, the gas sector will become the crux of the economy going forward.

    She said: “We have much more gas reserves than we have in crude. The PIB is a long and indepth bill, a historic, critical and extensive bill encompassing the 16 hitherto existing laws with the oil and gas industry.

    “Once the PIB is fully passed, transparency in the oil and gas industry would be achieved. It is a truism to say that the oil and gas industry has been characterised by too much opaqueness, high level of confidentiality. To this end, therefore, the PIB would remove opaqueness on a scale that has never been seen. Consequently, data would be accessible to all interested persons. One of the benefits of the bill would be in the creation of over 300,000 jobs in the industry in the next four to five years, compulsory execution of corporate social responsibility (CSR) for host communities, end of gas flaring and commercialisation of NNPC, among others.

    ‘’The PIB would ensure that transparency and good governance are promoted through the removal of much of the confidentiality as well as creating transparency. The bill on passage will ensure that all operations comply with all modern technical standards, are sound commercial proposition, don’t involve excessive costs, meet all health and safety standards, include Nigerian content plan that ensures maximisation of Nigerian employment and business opportunities, ensure maximum local economic spin-offs and job opportunities, meet all environmental standards, including approved environmental management plan and encourage investment in small oil and gas fields.”

     

    Stakeholders’reactions

    The Lead Director, Centre for Social Justice, Eze Onyekpere, said it is surprising that people are saying the PIB has been dumped because some northern legislators are against some provisions of the bill. “It is only a bill and it should undergo a normal legislative process, which it is undergoing.

    “Certainly, some people may not like some provisions in the bill and, of course, we shouldn’t expect the bill to come out exactly the way it went in or was submitted by the executive. Therefore, I’m surprised to hear people say that northern legislators reject PIB,” he said.

    The immediate past President of Nigerian Association of Petroleum Explorationists (NAPE), Dr. Lawrence Afe Mayowa, described the non-passage of the Bill as “an embarrassment.”

    He said poor inflow of investment into the oil industry was because of non-passage of the PIB. He said the passage of the bill would open up the industry and create windows of opportunities for the country including employment. He said passage of the PIB would give credibility to the government and encourage investments in the sector. “The passage of the bill will certainly move Nigeria forward and attract more investors to our country,” he said.

    He said if the PIB becomes law, it would address anomalies in the industry, including the persistent inadequate supply of gas to the electricity generating stations because provisions for all these are made in the bill. “The foot-dragging over the passage of the PIB has made Nigeria to a laughing stock before the international community,” he added.

    NAPE also made efforts to get stakeholders to a round table on how to stop the negative impact the PIB’s delay is having on the economy. Nigeria, according to the association, lost over N543 billion ($3.62 billion) in revenue from existing Production Sharing Contracts (PSC) in 2011 to the delay in the passage of the PIB. NAPE said the figure could be more than that as the country’s multi-billion dollars oil and gas industry is faced with imminent investments’ drain “as a result of the delay.”

    Mayowa reiterated calls for the quick passage of the bill “to save the country from the huge loss in revenue.” He added that the association is at the forefront of efforts to place the oil and gas industry on the right track, adding that would continue to ensure that things are done right in the industry.

    The Principal Consultant, Lonadek Oil and Gas Consultants, Dr. Ibilola Amao, said: “To give direction and focus to the oil and gas industry, the Federal Government has to ensure that the PIB, which has long been before the National Assembly, is passed into law and the downstream sector fully deregulated.’’

    She noted that the poor investment inflow into the oil and gas industry in recent times is because investors are not sure of the fiscal terms and impact that the passage of the PIB would have on their operations. Prompt passage of the Bill would clearly address these problems, she added.

    She said the passage of PIB should boost government’s efforts to improve gas supply to power sector for stable electricity supply. To achieve this, she said there was need for the government to support gas aggregation and monetisation and ensure that the Final Investment Decision (FID) for projects, such as Brass LNG and NLNG Train 7 is taken quickly.

    She stressed the importance of government’s commitment to the implementation of the Gas Master Plan, which should address domestic use in a most favourable manner. These projects, when in place, would contribute to uninterrupted power supply and help boost the growth of Small and Medium Enterprises (SMEs).

     

    Conclusion

    However, some stakeholders in the industry see something good in the PIB. They argue it is incontrovertible that a reform of the petroleum industry is overdue. Certainly, they said there must be provisions in the bill that don’t appeal to everybody, hence the need for legislative tinkering to sort things out. No doubt, the interests of stakeholders should be considered to ensure the industry attracts the required investment to attain the expected growth, technology transfer, best practices for safety and protection of the environment and most of all, adding value to Nigerians and the economy.

     

  • PIB unfair to North, says Senator Abba-Ibrahim

    PIB unfair to North, says Senator Abba-Ibrahim

    A SENATOR has explained why the North is opposed to the Petroleum Industry Bill (PIB) – the much vaunted magic for the troubled oil sector.

    The chairman, Senate Committee on Housing, Sen. Bukar Abba-Ibrahim (ANPP-Yobe) said yesterday in Abuja that the North is opposed to the PIB because of its “lopsidedness”.

    Abba-Ibrahim, who spoke at an interactive session with reporters, said the clause in the PIB, which is asking for additional 10 per cent revenue for oil producing communities, is unacceptable.

    He said: “Derivation is only one out of seven sources of revenue for the oil producing states. They have the Federal Government’s take home, the NDDC with over N500 billion being projects only in oil producing communities, they also have the Niger Delta Ministry with over N400 billion Federal Government grants in the name of amnesty and oil companies doing social corporate responsibility.”

    According to Abba-Ibrahim, adding another 10 per cent to the already existing revenue generators for the zone will be unfair. “Adding another 10 per cent to all these seven sources, I don’t know how you are going to have peace where resources allocations are so skewed to one side and unfair.’’

    He said this addition in the PIB is unacceptable and suggested that the money should go into the treasury so that every Nigerian could benefit from it.

    “Nobody planted or farmed oil, it is God who put it there and it will not last forever. It will get to a point where the oil will finish and another natural resource will come up and every Nigerian will benefit from it,’’ the senator said.

    The lawmaker added that the North is also opposed to the PIB because of its failure to make provision for the exploitation of other minerals in other parts of the country.

    “We have over 800 million tonnes of limestone in Gulane, Fune and Guljimba local governments of Yobe, but as a state government, you cannot go and exploit, it has to be done by the Federal Government.’’

    He expressed optimism that the bill when passed, would sanitise the Industry and address corruption. Speaking on the security challenge in the country, Abba-Ibrahim said that although dialogue might not be the only solution, it remained the best solution.

    “I am not saying it is the only solution because there are many ways to solve it, but I believe that dialogue remains the best.”

    He said himself and four others were named as observers in the negotiations between the Boko Haram sect members and the Federal Government, but that the sect members still remained faceless.

    Abba-Ibrahim, a former governor of Yobe, decried the marginalisation of the Northeast zone, which he said was one of the largest geo-political zones in the country. He said the marginalisation had led to the backwardness of the zone, which is battling desertification and poverty.

    While acknowledging that no particular leader could be blamed for the backwardness of the zone, he urged Nigerians to help proffer solutions to the regions problems.

    “The Southeast had their problems and it was resolved, the Southsouth also had their marginalisation problems resolved. So we hope that Nigerians would also help find solutions for the Northeast zone.”

    On education, he urged the president to summon the political will and courage to declare free and compulsory education up to secondary school level nationwide this year.

    He insisted that the merger talks between opposition parties in Nigeria are meant to give the country a credible alternative in 2015.

    Abba-Ibrahim said: “The Northeast today is where it is for the reasons I have just given. We just hope Southern Nigerian will try to consciously help us solve our problems.

    “The poverty in the northeast is unbelievable. It is incredible. When you get there you don’t need to be told. Just go round and don’t talk to anybody. When you come back, if you are an honest person you will say ‘yes, this place has been neglected for so long.’

    “Studies after studies have shown that it is the poorest part of Nigeria not because of lack of natural resources. No, but because of neglect for over decades.

    “You can’t blame Jonathan or Yar’Adua or any particular leader for what happened. But what happened had happened and there is need to consciously try to solve these problems and the circle goes on and on.

    “There are other issues like our National Social Housing Bill. This is part of the fight against poverty. There is also the Desertification Commission which will soon be debated on the floor of the Senate.

    “That is also part of poverty alleviation efforts because desertification remains one of the reasons the North East zone is the poorest part of Nigeria.

    “All the reasons for which we are poor or backward are not man-made. Some are natural and desertification is one of them.

    “In whatever form it is going to be passed, I hope the PIB will be passed so that there will be reform in the petroleum industry – the most corrupt industry in Nigeria and probably the most corrupt institution in the world as of today.

    “We must put a stop to this corruption. We can’t go on just talking about it. We have to go a step forward to try to solve the problems.

    “If at the end of 2013, these three Bills are through and Mr President has signed them into law and they have started to solve our problems, I will be very, very happy.

    “In addition to that, I hope Mr President will have the political will, he apparently seems to lack a strong political will. But I hope he will muscle sufficient courage to declare free and compulsory education up to secondary school level nationwide.

    “If he does just that and in 2015 tells us bye, bye, we will be grateful to him for life and forever.

    “If he does not I believe he has a lot of things to face. After all, we are about to merge – ANPP, ACN, CPC, APGA and part of Labour Party, Insha Allah are becoming one very strong progressive socialist party to take the monster, this monster called the PDP – that is the only way you can defeat the PDP and give Nigerians a credible alternative.”

     

  • ‘Why PIB must address community interests’

    The inclusion of interests of oil producing communities has been identified as one the best provisions in the Petroleum Industry Bill (PIB), now before the National Assembly.

    An industry stakeholder said part of the problems oil companies face in the oil producing areas is the weakness of laws defining rights to property by the oil and gas producing communities.

    President/Chief Executive, Swamp Blue Pearl, Kuromiema Amiabiye, who spoke at a forum in Lagos, said the communities are underserved in capacity building opportunities by the industry and governments including the Petroleum Technology Development Fund (PTDF) and the international oil companies (IOCs) especially in the areas of corporate social responsibility (CSR), job training and education scholarship programmes.

    He added that host communities witness a lot of discriminations by government’s agencies and business operators at all levels.

    He said the PIB when passed into law should be able to address all the community concerns and associated discontentment for smooth and profitable business operating environment in the industry. This development will ensure sustainable social and economic stability and integration of the nation.

    He also said communities are constantly at war with management and authorities over access to information and orchestrated impediments in recruitment, contracts and business opportunities in view of the fact that the oil and gas resources are derived from their land.

    He said: “Preference for beneficiaries are induced by ethnic/sectional considerations and political patronage that favour migrants into the communities and region; and political protégés whose benefactors are ‘outside operator’ of the industry and/or political godfathers, who control the levers of power and decision processes with respect to recruitment, contracting, business opportunities, among others.”

    He expressed disappointment that after 50 years of oil and gas exploitation, social infrastructure and amenities are still absent in the Niger Delta region.

    Government and corporate instruments for management of the benefits in the region face serious abuses, corruption and run on sponsorship.

    He said operators use all sorts of schemes to evade corporate governance rules to ensure that management of benefits goes their way.

    He said: “Within governments however, patronage and fraud remain the norm. Huge resource such as funds designated for community development through Niger Delta Development Corporation (NDDC), Ministry of the Niger Delta Area and the statutory 13 per cent derivation revenue, states/local government allocation targeted at communities, all show no visible impact on the physical and social landscape, or human development conditions of communities,” adding that even when provided, they are carted away with impunity.

  • Senate and PIB

    Senate and PIB

    •The Senate should not delay the passing of the bill on political grounds

    Last week, the Senate, rather disappointingly, stood down the Petroleum Industry Bill earlier listed in its Order Paper for December 17. All entreaties by Senate Leader Victor Ndoma Egba to get members to kick-start the process of its passage into law failed to persuade the members. In a session marked by acrimony, the upper house rejected a motion for the commencement of the debate on the general principles of the bill; it also resolved to shelve the debate to a later date.

    It was a perfect execution of filibuster by a group of senators from the North. Officially, the excuse given on the floor was that the Senate was in no mood to consider the Bill. They cited the tragic incident of the air mishap of the preceding weekend which claimed the lives of Governor Patrick Yakowa, former National Security Adviser Andrew Azazi and four others. Another group came up with the excuse that they needed more time to peruse the document – an elegant way of sending the bill to the cooler!

    For a bill that has been lying in the shelves of the National Assembly since July 17, last week’s development is perhaps a foretaste of the difficulties ahead. Earlier on July 20, the National Assembly had deferred consideration of the bill on the excuse that it came on the eve of their annual recess. That recess ended September 17.

    Unexpected as it may appear, the filibuster would seem the least of the obstacles which await the bill, given the North’s increasingly vociferous opposition to it. Whereas the region’s lawmakers are adamant that the bill forebodes no good for their region, the Northern Governors Forum has long held on to the view that the PIB is a recipe for further impoverishment of the region. Latest development obviously signals the resolve of the region’s political leadership to do battle.

    This newspaper on Sunday reported on the provisions considered by the leaders as particularly noxious. These are the institutional structure being proposed for the oil and gas industry; the planned divestment of equity in the proposed National Oil Company (the argument here is that the process could lock out the people of the region from ownership of oil and gas resources). There is also the proposed Host Community Fund –which they contended will grant more funds to the oil-producing communities – in addition to the 13.5 percent Derivation Fund –at their expense.

    They further argue that the PIB does not create a framework for effective exploration of hydrocarbons in the frontier acreages of the nation’s six sedimentary basins. Four of these basins are located in the North. Finally, they questioned the discretionary powers granted the petroleum minister in the proposed law.

    Now, these concerns may well be legitimate; only that we do not accept that they should constitute grounds for stalling the consideration of the bill. Indeed, we see them as issues that a robust engagement with relevant stakeholders can help resolve. The point here is that there is no such thing as a perfect piece of legislation. A law is, after all, as good as the lawmakers who made it.

    So, the idea of killing the bill apriori –that is, before it gets a mention on the floor of the Senate is unhelpful as it is defeatist. What the situation requires is demonstrable commitment by the lawmakers to the principles and ideals of justice and fair-play; willingness by all parties to compromise will also help. After all, there is nothing – at this time – to suggest that the interests of contending groups in the polity are necessarily irreconcilable.

     

  • PIB will be passed into law, says Ndoma-Egba

    PIB will be passed into law, says Ndoma-Egba

    Against the background of northern leaders stance against the Petroleum Industry Bill (PIB), Senate Leader, Victor Ndoma-Egba yesterday assured that it would be passed into law.

    He told reporters at the Peoples Democratic Party (PDP) secretariat in Calabar yesterday, that the bill holds the key to the envisaged reforms in the petroleum sector.

    He said the National Assembly with a membership of 469, is a medley of different interest groups, each fighting to protect its own interest, but with a bill like PIB seeking to unbundle the Nigerian National Petroleum Corporation (NNPC), intense lobbying will be exploited to see it through for the good of all.

    He said:“For me, I’m not surprised that the North is agitated, but they have not said they are against reforms in the petroleum industry. This bill is very relevant to the oil sector. At the appropriate time, we shall go into negotiations and horse-trading and arrive at a compromise for the Bill to be passed into law,” he said.

    Ndoma-Egba maintained that the advantages of the bill far outweighs its disadvantages, hence Nigerians should see the need to have a bill that would make investors come in to set up refineries, encourage competition in the sector which in the main would self-regulate the price of petroleum products and create jobs for the unemployed.

  • NNPC will meet 250,000 bpd target, says GMD

    NNPC will meet 250,000 bpd target, says GMD

    The Nigerian National Petroleum Corporation (NNPC) has said its aspiration to attain 250,000 barrels of oil per day (bpd) production by 2015 is on.

    He said it would government’s policy to unbundle the NNPC as provided in the Petroleum Industry Bill (PIB) now before the National Assembly.

    The production target would be achieved through NNPC’s subsidiary in charge of exploration and production (E&P), National Petroleum Development Company (NPDC).

    The Group Managing Director of NNPC, Andrew Yakubu, had on assumption of office assured he would ensure aggressive transformation of the corporation and its subsidiaries to be globally competitive and carry out its operations in line with global best practices.

    Yakubu during his inaugural town hall meeting with management and staff of the NNPC said the management team under his watch would introduce new business models in all its Strategic Business Units (SBUs) and Corporate Service Units (CSUs) to ensure the commercial viability of the corporation in order to remain competitive in the global oil and gas industry. Yakubu stated that the management team would reposition the NNPC to become a commercially focused and profit-driven organization that is governed by best management practices using current technology, pursue and maintain competitive operational and business efficiency, cost effectiveness, input/output optimization, revenue maximization and profitability.

    Before 2010, the NPDC was producing about 65,000bpd but by 2010, the company was given a target to attain 250,000 bpd production by 2015. In compliance with this directive, the company has ever continued to rev up production and currently stands at 130,000 bpd.

    According to the NPDC, the bulk of the recent production level is from the oil mining leases (OMLs) assigned to the company following the divestment of by some of the Joint Venture partners such as Shell. This kind of growth was described by the Managing Director of NPDC, Mr. Victor Briggs, as “not being organic,” thus the need for NPDC to commence aggressive drilling programme to grow its production in an organic fashion.

    In view of the desire to attain the target, Briggs said the NPDC has activated a plan to drill 40 wells in the next five years, which is an average of eight wells per year. This plan is significant and ambitious considering that through the last five years NPDC drilled only 10 years, an average of two wells per year, he added. He said the aggressive drilling programme has commenced with the drilling of Okono 6 and 7 wells in OML 119, he said.

    Briggs said: “These two new wells are producing 12,000bpd. “The only way we can increase our production is really by going out there and do the work. It is either you are repairing a well that has gone down because there are technical issues or you are drilling a well. In the case of Okono, it is the latter because we know there are potentials and all we did was to go out there and drill. I consider Okono 6 and 7 a success because the two wells combined are delivering over 12,000 barrels per day and that by any standard is significant especially in an area where most of the wells around are producing an average of 2,000bpd to 3000bpd.

    “Under the able leadership of the former Managing Director who is now Group Executive Director Exploration and Production, Engr. Abiye Membere, our production grew from between 60,000bpd and 65,000bpd to about 130,000bpd. That is about 100 percent growth. For us to meet the 250,000bpd target by 2015, we will have to do another 100 percent growth from our current production. And that is what we are trying to do. First, we tried to repair some of the wells to restore their production capacities. For instance, in OML 26, between when that asset was handed over to NPDC in June and now the production of that field was doubled. All of these have added up to the 130,000bpd production that we are talking about today.

    “To meet the 250,000bpd target by 2015 means doubling our production as I said earlier, but I am confident that we will meet the target because the resources are there and the reserves are there, and we have the people. Everything is therefore set for us to meet the target. For example, in the last five years NPDC drilled 10 wells, but we have a target to drill about 40 wells in the next five years. We have two rigs on site today, one offshore and the other one onshore and by the middle of next year we will bring in one more rig and towards the end of the year we will bring in the fourth rig. I believe we shall keep those rigs for the next two years.”

    The company said that the drilling of Okono 6 and 7 wells is significant in that it represents a realistic step towards growing the company’s production as well as national production positively. In furtherance of this plan, NPDC has two rigs in site as at today, one is working on Okono 8 while the other is a drilling at Oredo in OML 111.

    More rigs will be deployed by next year and also key to this programme is efforts to grow reserves, Briggs said. He noted that while the company is drilling to increase production, the management is also working hard to boost reserves because it is the only way to ensure sustainability. For instance, he said that in one of NPDC’s wells in Okono, the company is drilling deeper to assess its potential. That drilling is going on very well as at today; and if we find what I think we will find, and I think we will find it, that will give us more reserves in that field, Briggs added.

    NPDC is also breaking grounds in keeping with its vision to play a leading role in meeting the Federal Government’s aspiration to provide enough gas for domestic use especially in power generation. The Phase 1 of the Oredo Gas Handling Facility situated near Ologbo within the OML 111 has been completed. It currently supplies 65 million standard cubic feet (mmscf) per day of gas to the Nigerian Gas Company (NGC) for onward transmission to Power Holding Company of Nigeria (PHCN) and the National Integrated Power Project (NIPP) Power plants.

    The facility was originally designed to gather and process gas from the very prolific Oredo field (OML 111) and supply to the Ihonvbor Power Plant, but the plant has not been completed. The second phase is billed to come on stream by the end of the first quarter of 2013. That will bring an additional 100mmscfd from the plant.

    The Phase 2, according the company, would also see the completion of the liquefied petroleum gas (LPG) component of the gas plant, which will deliver about 4000 metric tons of LPG to enhance the drive to get every home to adopt LPG as its domestic cooking fuel as a way to combat deforestation and environmental pollution arising from the use of firewood and kerosene.

    The support of the Federal Government under the leadership of President Goodluck Jonathan has been instrumental to these achievements, Briggs said, adding that under President Jonathan and the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, the trend of asset stripping that was the norm under previous administrations has been halted. In fact, assets have rather been handed over to it which is partly responsible for the achievements. The future of NPDC is very rosy and it is well on its way to actualizing the vision of its founding fathers as a major player in the upstream sector of the oil and gas sector.

  • ‘PIB will engage host communities in oil, gas security’

    ‘PIB will engage host communities in oil, gas security’

    The Minister of Petroleum Resources, Mrs. Diezeani Allison-Madueke, said in Abuja on Tuesday that the proposed Petroleum Industry Bill (PIB) will encourage host communities to protect oil and gas infrastructure in their area.

    Speaking at the 18th Nigeria Economic Summit during a panel discussion on the “PIB and the Future of Nigeria’s Oil Industry, the minister said, “We have created a mechanism to formally recognise host communities as important stakeholders by assigning oil and gas infrastructure security to the communities.’’

    This, she said, would minimise environmental degradation due to vandalism and crude oil theft

    “As a Freedom to operate tool, it incorporates penalties to host communities in the event of vandalism in their localities.

    “The legislation also includes modalities for using regulation to increase the flexibility in the management of host communities’ issues,” the News Agency of Nigeria quoted Alison-Madueke as saying at the summit.

    The minister also said the PIB when passed into law would increase participation of new players in oil and gas industry through the proposed new acreage management system.