OrderPaperToday – The fate of host communities in the Petroleum Industry Bill (PIB) may witness an improvement as the report on the proposed legislation suggests a five percent dedicated fund for development of the areas.

This comes to light as the National Assembly is set to open debate today on the contentious oil reform legislation that has been in the legislative mill for well over a decade.

The Senate received the report of its joint committees on the PIB on Tuesday and slated debate for today, Thursday, while the House of Representatives had the report laid on Wednesday with debate expected without any delay.

Speaker of the House, Femi Gbajabiamila, said on Tuesday that the bill be will be passed by the National Assembly before lawmakers proceed on their annual break later this July.

Snippets authoritatively gathered by OrderPaper Nigeria revealed that the PIB report recommended five percent of the annual operating expenditure (OPEX) of the previous year of oil companies operating in the upstream to be paid to the proposed Host Communities Development Trust Fund of each host community.

The PIB report is said to also contain a provision for host communities in midstream and downstream assets to take care of impacted communities across the value-chain of the petroleum industry. The figure proposed is however less than the five percent pegged for upstream operations.

The five percent proposal is a 100 percent raise from the 2.5 percent proposed in the original draft of the PIB transmitted by the Executive last year.

OrderPaper Nigeria gathered that this 2.5% raise did not come without some concessions and fierce horse-trading among legislators, especially along regional and ethnic lines. The deal, it was further learnt, rested on a bargain for the funding of frontier exploration and certain pegged benefits for communities hosting such.

Recall that members of the House of Representatives from the 19 states of the north met in Niger State on Monday to harmonize positions on the bill and reiterated their resolve for its passage in a communique issued after the meeting.

Although this newspaper could not immediately verify the figures, but sources said the PIB report contains a provision for a ten percent fund for frontier communities and another pegged government funding for the exploration activities.

This position, sources say, was a way of getting legislators from the northern part of the country to buy into the five percent raise for host communities as strongly canvassed by their counterparts from the south, specifically, the oil-producing south-south geo-political zone.

Recall that the Host Community component of the PIB has attracted the most contention from a cross-section of stakeholders, according to an analysis by OrderPaper Nigeria which distilled memoranda submitted to the National Assembly during the public hearing on the bill.

Although many stakeholders, especially from host communities, have demanded for more to finance the proposed Trusts, the companies have kicked against the model and recommended instead that they be funded from the contribution to the Niger Delta Development Commission (NDDC) currently being paid.

The federal government through the Ministry of Petroleum Resources has however described the proposed 2.5% as fair.


Please enter your comment!
Please enter your name here