By; JEROME-MARIO CHIJIOKE UTOMI
Even when it is obvious that as humans, it is always convenient to forget and uncomfortable to remember, one invaluable asset the out gone 9th National Assembly left behind that will be too difficult to forget by Nigerians particularly, the people of the Niger Delta region, South South geopolitical zone of the country is the 2021 passage of the Petroleum Industry Act (PIA), after over 17years of back and forth movement, and its subsequent signing to law by former President Muhammadu Buhari.
Aside being the most audacious attempts to overhaul the petroleum sector in Nigeria, stakeholders believed that If properly and vigorously implemented, the PIA can represent the gold standard of natural resource management, with clear and separate roles for the subsectors of the industry; the existence of a commercially-oriented and profit-driven national petroleum company; the codification of transparency, good governance, and accountability in the administration of the petroleum resources of Nigeria; the economic and social development of host communities; environmental remediation; and a business environment conducive for oil and gas operations to thrive in the country.
Further amplifying the celebration of PIA advent is the awareness that the people of the Niger Delta region of Nigeria, have been cheated for a protracted period in ways that rendered restitution a costly process; inferior education, poor housing, unemployment, poor healthcare facilities and very recently recession. These are the bitter tablets of oppression the people have taken for the period under review. Now, this neglect has accumulated interest and its cost for this nation has become substantial in financial and human terms.
However, like every invention which usually comes with its opportunities and challenges, even so has PIA which provided for two regulatory agencies; the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority, (NMDPRA), to among other responsibilities provide technical and commercial regulation of petroleum operations in their respective sectors, contrary to expectations become the first and fundamental line of conflict between the operators and the host communities-leading to a renewed call by host communities on the Federal Government to give them full control of their resources and then they can developmentally change the lives of their people.
Beginning with the frosty relationship between the operators and host communities, among many examples, the recent ultimatum/threat by oil-rich community of Tsekelewu (Polobubo) in Warri North Local Government Area of Delta State, to shut down ongoing exploration activities of Conoil Producing Limited, if the company failed to reach a definite agreement with the community on the implementation of Chapter 3 of the Petroleum Industry Act (PIA) for the Tsekelewu bloc of communities, supports this assertion.
Entitled ‘Fourteen (14) Days Ultimatum to Implement Chapter 3 of 2021 Petroleum Industry Act (PIA) in Tsekelewu (Polobubo) Host Community and Bloc of Communities by Conoil Producing Limited at OML 103’, the petition/ultimatum, Dated December 30, 2022, signed by the President-General of the Tsekelewu (Polobubo) Development Association, Dr. Bright Abulu and the spokesman of the association, Mr. Christmas Ukagha and addressed to the Managing Director/Chief Executive Officer of Conoil Producing Limited, among other things, lamented that they adopted the option due to the seemingly snobbish attitude of the management of Conoil Producing as the company’s management had refused to honour letters asking for a meeting with the TCDA on the issue of the PIA implementation.
Essentially, while the people of Tsekelewu (Polobubo) Host Community continue to wait for what becomes the outcome of their ultimatum, there is indeed, greater evidence that points to the fact that the underlying premise behind PIA enactment has been defeated. There is equally reason for concern that what is currently happening between Oil Companies and their host communities may no longer be the first half of a reoccurring circle, but, rather the beginning of something negatively new and different.
According to a commentator, the challenge of ambiguity, interpretation and imprecision in the law is so ‘profound’. For example, it is unclear whether host community development trust obligations are additional to existing community levies (such as the Niger Delta development levy) or will be an aggregation of those levies. Similarly, the law is silent on the definition of “frontier basin” and host community, instead deferring to the NUPRC on the definition of frontier basin and to settlors or license holders on the definition of “host community.” These definitions are not neutral to revenue; they have revenue implications. This lack of clarity creates uncertainty and even possible disputes, especially if relevant parties define them differently.
On Capacity building, the referenced commenter captures it this way; this law is complex and complicated. While capacity in the oil and gas sector has been built over the years, the new legal provisions and fiscal framework will need new capacities to succeed. This challenge will be particularly acute in the new regulatory institutions; in the understanding, interpretation, and application of the law; and in the management of the funds, including the Host Community Development Trust Funds ( HCDTF).
In my view, another major area of ‘interest ‘’ that the 10th NASS must watch as it calls for urgent amendment is the fiscal framework of PIA which highlights penalties for gas flaring arising from midstream operations. It stated that revenues from these penalties will accrue to the Midstream and Downstream Infrastructure Fund and will be used to finance midstream and downstream infrastructure investment.
Aside the fact that the law was more interested in income generation for the government through payment of fines/penalties by the operators and has no protection for the host communities, who are the real victims of pollution arising from gas flaring , another major flaw inherent in the provision is that a tour by boat of creeks and coastal communities of Warri South West and Warri North Local Government Areas of Delta state will amply reveal that the much anticipated end in sight of gas flaring is actually not in sight. In the same manner, a journey by road from Warri via Eku-Abraka to Agbor, and another road trip from Warri through Ughelli down to Ogwuashi Ukwu in Aniocha Local Government of the state, shows an environment where people cannot properly breathe as it is littered by gas flaring points.
In a simple language, the operators appear more comfortable with the payment of fines/penalties arising from flared gases than taking practical steps to end the ‘practice’.
To a large extent, the above confirms as true the recently published report which among other concerns noted that Nigeria has about 139 gas flare locations spread across the Niger Delta both in onshore and offshore oil fields where gas which constitutes about 11 percent of the total gas produced are flared. Apart from the health implication of flared gases on humanity, its adverse impact on the nation’s economy is equally weighty. For instance, a parallel report published a while ago underlined that about 888 million standard cubic feet of gas was flared daily in 2017.
The flared gas, it added, was sufficient to light up Africa, or sub-Saharan Africa, generate 2.5 gigawatts (Gw) of power or produce 50 million barrels of oil equivalent (boe) or produce 600,000 metric tonnes of liquefied petroleum gas (LPG) per year, produce 22 million tonnes of carbon dioxide (CO2), feed two-three liquefied natural gas (LNG) trains, generate 300,000 jobs, able to attract $3.5 billion investment into Nigeria and has $350 million carbon credit value’. This is an illustrative pointer as to why the nation economically gropes and stumbles.
Looking at the enormity of the health and economic losses inherent in gas flaring, one may be tempted to ask what set the stage for gas flaring in Nigeria. The politics that keeps it going, and why it flourishes unabated?
Banking on what experts are saying, the major reason for flaring of gasses is that when crude oil is extracted from onshore and offshore oil wells, it brings with it raw natural gas to the surface and where natural gas transportation, pipelines, and infrastructure are lacking, like in the case of Nigeria, this gas is instead burned off or flared as a waste product as this is the cheapest option. This has been going on since the 1950s when crude oil was first discovered in commercial quantities in Nigeria.
To make the PIA rewarding and meet the changing needs of all the parties involved, Senator Goodswill Akpabio’s led 10th National Assembly must amend the existing legislation. it has to be simple and without any form of ambiguity in its provisions. Take as an illustration, the NASS must not fail to remember that the Host Community Development Trust Fund (HCDTF) is to foster sustainable prosperity, provide direct social and economic benefits from petroleum to host communities, and enhance peaceful and harmonious coexistence between licensees or lessees and host communities. The 10th NASS must do more to strengthen these provisions.
Most importantly, it has recently become evident that every normal human being from the Niger delta is against the 3% allocation to the host communities. They are in support of the community’s demand of 10%.
While the above state of affairs has tactically exposed the fundamental flaw in the PIA which was at a time celebrated, the truth is that if the members of the 10th NASS and of course Senator Ahmed Bola Tinubu led Federal Government, do nothing to amend these legislation, it will translate to failing future generations of Niger Deltans by leaving them an Act that will more diminish and devastate their region.
The NASS should also put these concerns into consideration.
Utomi Jerome-Mario is the Programme Coordinator (Media and Policy), Social and Economic Justice Advocacy (SEJA), Lagos. He could be reached via;jeromeutomi@yahoo.com/08032725374
