Honourable Minister for Petroleum Resources Chief Timipre Marlin Sylva, Senator Biobarakuma Degi-Eremienyo, E.S. Local Content, Hon Israel Sunny-Goli among others arrive Brass Saturday, Jan. 30, 2021 for the Ground breaking ceremony of Brass International Atlantic Refinery project and the cottage hospital building, which is also a social responsibility project of the refinery
Anger, confusion and conflicting interpretations have trailed the ongoing debate and discussions on the Petroleum Industry Bill, PIB at the National Assembly and in the Niger Delta. Confusion and panicky questions were triggered following a position attributed to Chief Timipre Sylva asserting that 2.5percent benefit to Host Communities proposed under the PIB is a fair deal.
The PIB was first mooted in the early 2005 following decades of agitation by members of host communities in mostly the oil bearing Niger Delta for a fairer deal from the oil and gas in their land and waterways. The latest rumpus was triggered off following submission by Minister of State for Petroleum Chief Timipre Sylva that 2.5percent benefits from Oil companies Production costs was a fair enough deal. This is interpreted by many in the oil bearing communities as too drastic a reduction from the 10% benefit from Net profit which the communities have insisted on since 2008 when the PIB proposal was first introduced at the 6th Assembly. Sylva’s position is largely perceived as a betrayal.
There are perceptions also that the 2.5percent benefit amounts to a reduction and possible deduction from the 13percent derivation stake given constitutionally to the Host Communities. But, a recently released document that seeks to drive home the Petroleum Minister’s insistence that 2.5% of the Oil companies production costs annually presents a better, more certain deal than a 10 percent of net profit that is nebulous, uncertain against the backdrop of unverifiable daily oil production figures. Nigeria has been unable to authoritatively declare its official daily production figures in 65 years of oil production and sales since 1956. A portion of the document made available to National Point suggests thus:
‘If you have to look at it properly, you will see that 10percent of profit is different from 10percent of operation costs of all the oil companies. Before now, you had the provision of 10 percent of profit. Profit means that if I don’t declare it, you don’t have anything. I can decide to say 100 percent of profit, so you don’t get anything. But in this case it is 2.5percent of OPEX costs. So, at the end of the year, you look at your operating cost and take 2.5 percent of that cost to the budget of the next year. As far as we are concerned, we have made a very fair proposal. Fair to the host communities, to the country and the oil companies’.
Weighing in on the debate, a respected senior lawyer who is also from an oil bearing host community, who spoke on the condition of anonymity noted about the brewing anger in the oil bearing communities generated by the 2.5percent benefit proposal to host communities, ‘ The 13 percent Fund’, is a constitutional provision and can only be altered, abolished, increased or decreased by and or through an amendment or alteration of the constitution. There is as yet no such disposition or contemplation. Whereas the 10percent or 2.5percent (whichever percentage is agreed in the end) Host Community Fund is a provision in a bill that will ultimately become an Act, if and when the Bill is passed as constitutionally provided. It will only be an addition to the 13% derivation fund.”
Many keen observers of the twists and turns taken by the PIB are still on alert expecting booby traps in these postulations and positions. This is hardly surprising in view of the raw deal host communities have received in the six decades of oil and gas production in the Niger Delta where their lot has been largely a baleful one of environmental degradation, ecosystems loss, gas leaks and violent deaths, violent and primitive political battles that accompany elections which have in the last 20 years, been mostly about few privileged access to political power and office and access to the perks of office that oil guarantees.
In a related development, members of the Ekpeye Oil and Gas Pipelines Host Families Association of Rivers State have presented before the National Assembly, separate demands, different from the 10 percent operational cost being advocated by the Niger Delta host communities. The host communities are demanding a 10 percent operational cost from oil firms, a development that has remained a major contentious issue since the proposed law was introduced to the 6th National Assembly in September 2008.
The host communities started their demand when they asked for a 10 per cent net profit in the PIB in 2012. They reduced it to five per cent of actual expenditure in 2018.