Nigeria – Petroleum Industry Bill (PIB)
The public hearing on the Petroleum Industry Bill (PIB) held on Thursday 28 January 2021 at the National Assembly Complex. Host community of Nigeria Producing Oil and Gas (HostCom) members made a presentation at the hearing which led to chaos.
The PIB has already been delayed for two decades and issues with the host communities is one of them.
This is a highlight of what the Petroleum Bill (PIB) proposes for the host communities.
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PIB – Development Trust Fund for Host Communities in Nigeria and proposed benefits
– Companies operating in the shallow waters, deep offshore and littoral areas of the host communities shall establish a trust fund for the community called the Host Community Development Fund.
– Companies shall make an annual contribution to the host community development trust fund of an amount equal to 2.5% of its operating expenses each year.
– The host community development trust fund will be operated as a corporate body with a board of trustees. The board shall safeguard the utilization of the trust fund for projects that employ and benefits the host communities.
– Companies must incorporate host communities development trust fund within 12 months of existing oil mining lease period or prior to the application or commencement of commercial operations.
– The host community development trust fund shall go into projects support, health care developments and local initiative within the host communities
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The arguments around the PIB
The host communities are demanding 10% rather than the earlier mention 2.5%. They claim that it will enable them to balance the negative impact of upstream activities in the past.
The Nigerian government rejected the proposal. The Honourable Minister of State for Petroleum Resources, Timipre Sylva, during the hearing, backed the FG on this. He said that the proposed 2.5% in the PIB is fair.
Aside from the host communities, the Oil Producers Trade Section (OPTS) said the PIB’s provisions could have an adverse impact on the development of deep-water fields. The OPTS represents the 30 upstream companies in Nigeria – Chevron, Eni, ExxonMobil, Shell, Total – and chaired by Mike Sangster.
These arguements could delay the PIB further especially if the FG fails to meet the demand of the HostCom.
According to Senate President Ahmed Lawan during the hearing, the government wants the PIB to approval from the National Assembly by April. The FG also intends to pass the law before 29 May 2021.
The Joint Committee on Petroleum Upstream, Downstream & Gas organised the hearings from January 25 -28.