PIB: Kano, Kaduna, Lagos listed as host communities Reps set up ad hoc c’ttee as bill passes 2nd reading
The new Industry before Petroleum Bill (PIB) the House of Representatives has expanded the concept of host communities to include some non-oil states.
The Bill, read for the second time yesterday, provides that state where there is a refinery, petroleum depot or where pipeline passes through will draw from the host communities’ funds.
According to the NNPC, Nigeria has 5000 kilometres of pipeline network and twentyone (21) storage depots. Independent marketers account for over 83 depots spread across the country.
The pipeline networks (depending on the product they are conveying) crisscross states in the West mostly
Lagos and South Warri, Port Harcourt, East Aba, Owerri down to the North, Kaduna, Kano and Gombe.
The House yesterday passed three different bills on the petroleum industry for second reading including the Senate version already passed by the upper chamber last month.
Although some lawmakers picked holes in the bill, they allowed it pass for second reading for stakeholders to contribute their quota during public hearing.
The bill provides that the benefits to be derived by nonoil communities will be less than those for communities where oil exploration and production take place.
The bill is titled: ‘A Bill for an Act to provide for a framework relating to Petroleum Host Community’s participation, cost and benefit sharing amongst the government, petroleum exploration companies and petroleum host communities and for related matters.’
Leading debate on the Bill, Rep Joseph Akinlaja (PDP, Ondo), said the draft law provides that there should be a Petroleum Communities Trust Fund as a corporate body for each local government hosting upstream facilities to manage the monies received as payment for hosting petroleum operations.
He said there shall be a board for the fund and that 0.5 percent of the fund would be allocated to local government councils in the affected communities.
He said the federal government shall pay to each fund the following monies: 10 percent of the total amount payable to a state government from its derivation revenue and 20 percent of an aggregate of the total royalties accruing to the federal government to be evenly distributed by all concerned local governments.
Other monies to be paid by the federal government are 50 percent of government receipt from levies for pipelines payable to host communities hosting such pipelines and the local government shall be the general custodian of the monies.
“Host communities include both where oil is produced and where pipeline passes as well as where there’s oil installation which can constitute danger to human beings. Nobody knew 10 years ago that oil would be produced in Lagos.
“Communities where oil is produced suffer different degrees of degradation. There are communities that don’t know night because of gas flaring, because there’s always light, but it is dangerous light.
“The core place where crude oil is mined has different percentage from where flow station is. Where the pipelines pass, they’re also part of the communities, but they’re graded in the bill. There are areas we call impacted communities,” he said.
The lawmaker also said the law would encourage people to come into the country for exploration businesses even before production, which would in turn increase investment, transparency and profitability.
On host communities, he said when there is vandalism, where the pipeline passes suffers, not the communities where the exploration takes place.
The bill passed by the Senate has broken the Nigeria National Petroleum Corporation (NNPC) into two commercial entities namely: National Oil Company and the Nigerian Petroleum Assets Management Company.
The NPC would take charge of petroleum products, while the NPMAC would operate as a commercial entity with the responsibility of managing all assets currently held by the NNPC.
The bill also proposed the establishment of the Nigeria Petroleum Regulatory Commission (NPRC) to serve as the regulator responsible for licensing, monitoring, supervision of petroleum operations enforcing laws, regulations and standards across the value chain.
Meanwhile, the House has referred the three bills to a special ad-hoc committee on PIB to be headed by Chief Whip, Alhassan Ado Doguwa, while other members of the panel include Akinlaja, Nwokolo, Reps Emmanuel Yisa Orker-Jev, Musa Sarkin Adar, Ossai Nicholas Ossai, among others.
The NPC would take charge of petroleum products, while the NPMAC would operate as a commercial entity with the responsibility of managing all assets currently held by the NNPC.
The bill also proposed the establishment of the Nigeria Petroleum Regulatory Commission (NPRC) to serve as the regulator responsible for licensing, monitoring, supervision of petroleum operations enforcing laws, regulations and standards across the value chain.