The Federal Government has said that it would need to find investors to attract investors into the country, using the Petroleum Industry Bill (PIB).
This was stated by the Chairman, Senate Committee on Petroleum Downstream, Mohammed Sabo, according to NAN.
He said, “if you don’t provide the incentives for investors to come in, they will go to other places and that is what has been happening.
“So our attempt in the PIB is to capture all these areas and to synergise and provide incentives for investors to come in.”
The lawmaker said that this was important as “Some decades ago, we find it is only in Nigeria that we have oil but now we have it in Ghana, Togo and Chad.”
He also disclosed that host communities – states where oil is extracted – would receive half a billion dollars, which represents 3 percent, adding that it was “a lot of money”.
Sabo said that a further review of the communities’ share had been decided to be “adequately in order” considering the situation.
However, he said, the decision was not set in stone, as any presented amendment would be considered.
He said, “As of today, what is going to the host communities is three per cent. And three per cent translates to over half a billion dollars annually. This is a lot of money.
“The bill came with two point five per cent recommendation and the committee recommended five per cent.
“There were series of consultations we have to look at 2.5 per cent and five per cent.
“You have to look at the quantum of money involved. After being briefed and further explanations, we discovered that 3 three per cent will adequately be in order in these circumstances.
“The law is not infinite. In two months, anybody can bring an amendment and we will look at it.
“We need to encourage investors to come in. The more people come to invest, the more you get three per cent.”
States in the Southsouth who make up the majority of the host communities asked, in 2020, that the share be reviewed up to 10 percent.
Explaining the reason for the ask, the Governor of Delta State, Ifeanyi Okowa, said that it was “in the best interest of our communities and the nation. If satisfied with the provision of the trust, the host communities will be watch dogs of the oil facilities on behalf of the federal, state governments and the oil companies,” an editorial by Independent stated.
Okowa added, that “A peaceful business environment in the various oil communities would enable us have greater and seamless production without any form of disruption going into the future.”
What is Contained in the PIB?
The bill derived from the National Oil and Gas Policy 2007 has remained a lengthy debate in the Red Chamber, and it contains the following:
- Creating a conducive business environment for petroleum operation;
- Enhancing exploration and exploitation of petroleum resources for the benefit of Nigerians;
- Optimizing domestic gas supplies, particularly for power generation and industrial development;
- Establishing a progressive fiscal framework that encourages further investment in the petroleum industry while optimizing the revenue accruing to the government;
- Establishing commercially oriented and profit-driven oil and gas entities;
- Deregulating and liberalising the downstream petroleum sector;
- Creating efficient and effective regulatory agencies;
- Promoting openness and transparency in the industry and
- Encouraging the development of Nigerian content.
- In order to achieve these objectives, the bill provides, among other things, for:
- The restructuring and reorganisation of industry institutions and the regulatory framework;
- A new fiscal regime for upstream oil and gas production;
- Allocation of domestic Gas Supply obligations to licensees.