13% DERIVATION: N7.3TRN WASTED IN 14 YEARS – NORTHERN SENATORS
A divided Senate yesterday began debates on the general principles of the touchy Petroleum Industry Bill (PIB) with provisions for the establishment of a Petroleum Host Communities Fund, an exploration agency to seek new oil finds, and the perceived unlimited powers of the petroleum minister topping deliberations.
Senators mainly of northern extraction faulted the PIB's provision which earmarked 10 per cent of the net profits of oil companies for petroleum host communities. Speaking on behalf of northern senators, Ahmed Lawan (Yobe, ANPP) stated that N7.3 trillion accruing from the current 13 per cent derivation fund for oil-producing states has been wasted by benefiting states since 1999 when it was established.
According to Senator Lawan, the proposed Petroleum Host Communities Fund was misplaced as the current 13 per cent derivation was supposed to be for the benefit of host communities but state governments have misappropriated the extra funds in the last 14 years.
Also, northern senators faulted the structure of the proposed National Oil Exploration Frontier – touted as a largely northern-driven bargain as part of ongoing ethnic/political positioning on the PIB.
At present, the exploration frontier will function as a department under the proposed Petroleum Technical Bureau, an arrangement northern senators faulted, insisting that the oil exploration frontier must be established as a 'stand-alone' agency to effectively pursue new oil finds reportedly in the north and other regions of the country.
Senators Ali Ndume (Borno,ANPP), Isa Galoudo (Kebbi, PDP) faulted the seeming enormous powers of the petroleum minister and the implication of the proposed Petroleum Host Communities Fund on the revenue accruing to the three tiers of government. Galoudo said the fund would unduly short-change beneficiaries of the country's consolidated revenue account.
However, Senator BukolaSaraki (Kwara,PDP) cautioned lawmakers against dwelling on divisive and contentious areas of the PIB at the risk of losing billions of dollar investments which have been withheld by international oil companies (IOCs) seeking sure footing on the direction of the PIB.
Saraki suggested that deliberations be tailored to strengthen the PIB to block leakages in Nigeria's crude oil outputs. He said a situation where IOCs determine and dictate Nigeria's product figures must be corrected by the new PIB, if passed.
Senate leader Victor Ndoma-Egba, in lead debates, said the Seventh Senate chases history if it passes the PIB after past ill-fated attempts.
Ndoma-Egba however noted that the provision for the source of funding for the Petroleum Technology Development Fund (PTDF) was 'inadvertently or deliberately' omitted in the current PIB.
The Senate leader said, at Tuesday's plenary: 'Given the mono-cultural nature of our economy, and its almost total dependence on oil, the bill has understandably elicited deep local and international interest as the oil industry, especially in terms of technology, expertise and economics, is global.
'The bill has taken into consideration the many compelling issues in the petroleum sector and seeks to comprehensively capture the legal, fiscal, health, environmental, safety and governance requirements of a most complex industry. The issues include the over half a century experience of operating the oil and gas industry in all the major aspects of the sector including policy, regulation and commercial operations.
The debates continue today.