By Jeph Ajobaju, Chief Copy Editor
Senators rode the crest of drama and chaos but, at last, coasted home by passing the Petroleum Industry Bill (Bill) that had for years been grounded by the politics and the manoeuvres of vested interests against updating Nigeria’s oil exploration laws.
“PIB demons have been defeated,” Senate President Ahmad Lawan said with a sigh of relief, noting that the historic passage marks a watershed for the 9th National Assembly (NASS).
The PIB guarantees 30 per cent of oil and gas profits of the Nigerian National Petroleum Corporation (NNPC) to fund oil exploration in frontier basins.
But Senate plenary witnessed drama about what percentage of the funds of oil companies should be ring-fenced to develop host communities, per reporting by The Nation.
The passage followed the consideration of the report of Senate Joint Committee on Downstream Petroleum Sector; Petroleum Resources (Upstream), presented by Joint Committee Chairman Sabo Nakudu.
The Senate approved that host communities would get 3 per cent ($502.8 million) of the annual operating expenditure of oil firms, contributed into the Host Community Development Trust Fund.
Deputy Senate President Ovie Omo-Agege had pleaded for an increase the 5 per cent proposed by the committee.
Its “recommendation recognises the need for the country to urgently and aggressively explore and develop frontier basins to take advantage of the foreseeable threats to the funding of fossil fuel projects across the world due to speedy shift from fossil fuel to other alternative energy sources,” he said.
“To this end, the Committee recommends funding mechanism of 30 per cent of NNPC’s oil and gas profit as in the production sharing, profit sharing, and risk service contracts to fund exploration of frontier basins.”
Nakudu argued that “the various recommended provisions, when passed into law, will ensure a peaceful operating environment that will have a positive direct impact on the cost of oil and gas production which has been the bane of the Nigerian oil and gas industry.”
The committee earmarked 5 per cent for funding host communities but the Senate slashed it to 3 per cent of the operating expenditure of oil firms.
Omo-Agege said even though the committee arrived at 5 per cent after consultation, the figure needed a slight increase to assuage the feelings and pains of oil bearing communities.
Niger Delta people want a deal, he stressed, but “a no deal is better than a bad deal.”
He added: “For us in the Niger Delta there are three areas that are of much interest. I’m sure my other colleagues will speak to it.
“On the whole, the major thrust, the rationale for pushing for this Bill which has eluded this country for so many years, is for us to get a law in place that will create an enabling environment for foreign investors coming with their money to invest in the sector before as we were told, our oil will go out of fashion.
“Some of us have this belief that no matter the thinking of the investment community, oil will always be relevant. Some of them have made the case that in the next 10 to 15 years, there will be no use for oil.
“This may be acceptable to a lot of people in this country but in my Senatorial District, and indeed in most of Niger Delta, they are prepared to let this oil remain on the ground until may be another 40 to 50 years when there may be need for oil again.
“What does that mean? They want a deal but they want a good deal. Sometimes, no deal could be better than a bad deal.
“This Bill as originally conceived provided only 2.5 per cent contribution by sector companies to the Host Community Trust Fund. This is not the first experiment or first attempt.
“I will still make a case if possible that we go a little more than the 5 per cent already agreed.
“I understand we cannot meet the 10 per cent. But that is the clamour at home. I need to plead that if there is a chance we can go a little more than the 5 per cent, we will be grateful.”
Joint Committee Co-Chairman Bassey Albert said 5 per cent means that the property and equipment of oil companies will be secured by host communities or part of the trust fund will be used to remedy damage or theft.
However, The Nation explains that the Senate reduced it from 5 per cent to 3 per cent after a closed door briefing of lawmakers by Minister for State for Petroleum Resources, Timipre Sylva, and NNPC Group Managing Director, Mele Kyari.
Efforts by Omo-Agege and Senators George Sekibo and James Manager to get a better deal failed.
The meeting lasted for almost two hours.
The drama and the chaos
PREMIUM TIMES reports that states referred to as ‘frontier basins’ were not clearly defined in the report of the committee.
It adds that passage of the bill was preceded by disagreement and division among lawmakers.
The lawmakers had started the clause-by-clause consideration of the Bill when some lawmakers began to raise concerns about Clause 240 which prescribes fund for host communities.
The Bill proposed 2.5 per cent Equity Share Holding for Host Communities but the committee recommended 5 per cent.
Equity share holding was top among the demands of individuals and groups at the public hearing on the Bill held five months ago.
While many opposed the proposed 2.5 per cent, Sylva had said the amount was fair.
When the lawmakers got to Clause 240, Babba Kaita (APC, Katsina) proposed that the amount be reduced from 5 per cent proposed by the committee to 3 per cent.
Lawan put the question to voice vote. Despite resounding nays, he passed in favour of ayes. This generated noise as some senators, mostly from the South South, were uneasy with the ruling.
Manager called for another vote opposing this vote. Again, Lawan ruled in favour of Kaita’s amendment.
Bassey explained that 5 per cent was recommended so it can be used to remedy incidents that may affect assets.
His comment was greeted by more chaos. In the midst of the noise, Sekibo cited Order 73 to challenge Lawan’s ruling.
The order required that Lawan put the question to vote a second time. And if his opinion was challenged again, he would call each senator’s name to vote.
At this point, Senate Leader Abdullahi Yahaya appealed to Sekibo to withdraw the order.
“My heart bleeds. This Senate has come a long way. We have never treated ourselves this way. We are embarking on a very dangerous journey,” Yahaya said.
“We have had and cherished unity. This is a path to Armageddon. I appeal to my brother and friend, Sekibo, to withdraw the point of Order.”
Lawan made the same appeal.
“What we have been educated by the GMD gives us better ideas. This 3 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, per PREMIUM TIMES.
Bitter pill to swallow
The Nation adds that Sekibo withdrew his motion and pleaded that 3 per cent be increased by retaking the vote on the amendment Kaita proposed.
Lawan thanked Sekibo for his statesmanship in withdrawing his motion but declined to call for a fresh vote on Kaita’s motion.
“We have already ruled and it is against the provisions of the Standing Orders of this Chamber to revisit a matter already ruled upon by the Presiding Officer,” Lawan said.
Manager described the 3 per cent as a “bitter pill to swallow.”
But, according to The Nation, Nakudu told journalists that the 3 per cent is “a lot of money” because it translates to over $500 million annually.
He said the percentage was reduced from 5 to 3 to encourage investors, and the 3 per cent is besides other statutory funding accruing to the Niger Delta.
Senate spokesman Surajudeen Ajibola Basiru clarified that 3 per cent amounts to $502.8 million annually.