15 May 2015, Abuja — The House of Representatives yesterday opted to slash the contribution fund suggested for the oil producing companies to the proposed Petroleum Host Communities Fund (PHCF) to 7.5 percent, about 2.5 percent less than the 10 percent initially suggested in the Petroleum Industry Bill, PIB, that is currently being considered by the House.
The House adopted this position following resumption of debate on the PIB and directly objected to the initial proposal that the oil producing firms’ annual net profits to the PHCF be 10 percent. The fund is for the purposes of development of the areas and other Corporate Social Responsibilities engagements.
Like the clauses 2 and 6 (2) which had generated heated debate penultimate day, the contributory funds equally generated heated debate along regional interests, as the non-oil producing areas had in the past, accused the Niger Delta region of “asking for too much.”
With the 13 percent oil revenue derivation, and the establishment of the Niger Delta Development Commission (NDDC), lawmakers from non-oil producing states had seen the demand as unreasonable while debate on the general principles of the Bill lasted, and many other contested issues led to the setting up of a special adhoc panel by the House of Representatives, to review the Bill.
Chairman of the adhoc committee and Chief Whip of the House, Ishaka Bawa, while expressing concerns on the likely challenges to future investments in the oil sector, suggested a reduction of the proposed percentage, as according to him, host communities are certainly going to increase in the nearest future, given the recent discovery of oil in many places in the North, which he said would raise the stake on investors.
“Whatever we do, we must take into cognizance of the implications of the impact this is likely to have on future investments in the sector,” he said; explaining that oil producing communities would soon extend to all the states in the North west and North east, except Sokoto and Kebbi, a suggestion that led to a motion being moved that the percentage be slashed from 10 to 7.5.
*David Odama – Daily Independent