PIB: Oil communities to share $600m annually

If proposals contained in the new Petroleum
Industry Bill (PIB) were approved by the
National Assembly, oil communities in Nigeria
would, from next year, share $600 million
annually from contributions made by oil firms
in the country.
The amount may be adjusted pursuant to
subsection 334 of the new Act, “to allow for
inflationary increase.”
The Accountant-General of the Federation is
being proposed to oversee the account.
The proposal is contained in the 707-page
report of a Bill seeking for an Act to provide
for the establishment of a legal, fiscal and
regulatory framework for the petroleum
industry in Nigeria and for other related
matters being considered by the Senate.
The Senate Joint Committee is made up of
six standing committees, which are the com­
mittees on Petroleum Resources (Upstream
and Downstream), Gas, Finance, Environment
and Ecology, Judiciary, Human Rights and
Legal Matters.
The voluminous report, a copy of which was
sighted by Daily Sun at the weekend,
proposes in clause 144 (1) (a) that every
company involved in upstream and
downstream petroleum operations or both
shall remit on a monthly basis impact funding
amounts to the Petroleum Host Community
Fund based on the regulations pursuant to
paragraph (1)(b) of the section of the Act.
Justifying the proposal, the joint committee
noted: “Specific funding amount, totalling
approximately $600 million annually is
included to provide certainty of contribution
whichwould grow as facilities grow with the
PIB.”
In clause 142 of the report, which talks
specifically about the Petroleum Host
Community Fund (PHCF), the joint committee
proposed that the PHCF, “be restructured as
a social impact fund including all host com­
munities in the country ameliorating the
social impact that petroleum operations foist
on the host communities.” It added: “The
Fund shall transfer money directly to
community organisations, to be defined in
regulations, all in impact areas based on
allocation procedures established in
regulations.
“The regulations will determine how the
funds are to be distributed. In order to allow
for sufficient consultation on regulations, one
year after the effective date of the Act is en­
visaged.”
The joint committee also recommended that,
“any payment to the Fund shall commence
not later than three months from the
commencement of this Act and disbursement
from the Fund shall commence not later than
12 months after the commencement of the
Act.”
Source sun news