Author: Adeoye Adefulu

• PIAB
  • concerns about the third-party access – will not encourage investment
  • price control provisions are worrisome
  • specific protection to be given to facilities in the midstream sector
  • entities operating in the Free Trade Zone not covered by these provisions
• PIFB
  • attempt to reduce allowable expenditure – provisions of the PIFB should be aligned with CITA
  • companies should be able to appeal Federal High Court decisions
  • re-consider the basis for penalising failure to self assess
  • withholding tax penalties should be aligned with CITA
  • harmonise potential conflicts in definitions of midstream and downstream

 

• NDDC should be downsized financially, restructured and given specific areas of intervention
• Monies reduced from NDDC should be given to the host communities
• remuneration to host communities should be according to specific criteria that take into account the levels of degradation suffered by the communities
• every host community should be allotted a marginal field

• PIFB
  • The PIFB does not tackle profit based erosion and profit sharing
  • The PIFB does not have a robust midstream fiscal system
  • Propose a clear link between product price and crude oil price
  • Consequential financial impact of increasing the tenor of the licences
  • There should be greater conformance with the government’s fiscal policy
•  PHICB
  • Do not create additional burdens to operators
  • State governments should be involved in funding the community trust
  • Overwhelming burden should be on the part of the government
• PIAB
  • Generally welcome the concept of a bill which deals specifically with
  • Ability of the Minister to supervise the Ministry is denuded by the bill
  • Who will regulate the regulator?
  • Minister should be involved in the licensing processes
  • For checks and balances the minister should determine when
  • Minister should have the power of approval
  • Acreage should revert to the state
  • Data ownership should reside with the state
  • Review the provisions regarding back-in rights
  • Grant of flared gas dree of costs should be retained by the government
  • Grant of ownership in petroleum should be explicitly stated
  • Grandfather the provisions of Petroleum Production and Distribution (Anti – Sabotage) Act;
  • Align gas flaring issues with the proposed Gas Flaring Bill
  • Review the provisions regarding signature bonuses
  • No provisions on venting
  • Impose scheduled process of asset disposal
  • Same duration for leases in all terrains be maintained
  • Confidentiality clauses should be revisited
  • Unfettered access to data for educational research
  • Who makes the decision to back-in?
  • Clear process on back-in
  • National Strategic Stocks – not a regulatory function but a commercial activity

Petroleum Contractors Trade Section

• Give consideration to global competitiveness
• Adverse impact of the fiscal terms on deepwater will have a significant impact on jobs in the industry

PANDEF

• Hostcom should be empowered to set up the National host community trust fund
• 10% equity contribution with 5% taken from NNPC and 5% from the IOCs

Ovia Ethnic Community

• Communities to be shareholders in the oil and gas companies
• Shares should be given to Nigerians
• Host communities should be properly identified
• Headquarters of oil companies should be where oil is produced

• 10% equity stakeholding for communities
• gas flaring penalties to be paid to the host communities
• headquarters to be located where the oil producing companies have their highest production
• oil producing companies must establish institutes of training in the states where they are located
• final solution lies in operating a truly federal government

• Landlords have been neglected since oil was discovered in Nigeria
• landlords should be given a role in administration
• 15% of the host communities funds should be given to the landlords
• compensation should be extended to the landlords

• recognise and appreciate the effort taken thus far
• Host community should be involved in the appointment of trustees
• recognition should be for ethnic nationalities
• it should not be based on headcount but on the quantum of resources derived from the community
• the contribution to the host community fund should be 7.5% of the production of the settlor
•  recognise the difference between contributions to host communities as opposed to impacted communities

• Incorporate a National host community trust fund
• trustees should be appointed by the Host Communities of Nigeria
• existing CSR obligations should not be migrated but continued
• 10% equity participation to be paid to the Host Community Trust Fund
• adopt the constitution of the National Host Communities of Nigeria
• gas flare penalties to be included in the trust

• Ownership of oil and gas should be explicitly vested in the State
• The bills should incentivise the development of oil and gas in the country
• Simplify fiscal systems for ease of administration
• Regulatory issues should not be included in the Bill but left for the Regulator
• The government should be able to clawback where there are excess profits
• Should not legislate on issues which should be dealt with by contract

• Significant improvement on previous bills, but needs to address gas in a way to realise its potential
• Gas should be treated as an enabler rather than a source of tax revenue
• If gas is used properly it has a significant leverage effect on the economy
• Incentives similar to AGFA should be put in place
• Cost efficiency factor should not apply to gas
• Gas royalties should be paid in Naira
• Condensate should be treated as gas
• A clearer definition of upstream, midstream and downstream
• Sample calculation tables should be included in the bill to avoid disputes with the FIRS
• All royalties should be in tranches
• Marginal fields should be specifically protected