Category: News

Please find below a list of some of the issues we’ll be covering this week on petroleumindustrybill.com:

• On Monday we will bring you a light-hearted review of the Petroleum Industry Fiscal Bill (PIFB) by Dr. Ekpen Omonbude, formerly of the Commonwealth, now of Bargate Advisory. Dr. Omonbude has advised a number of countries in the Commonwealth on their natural resources fiscal framework and in his usual style, makes the provisions of the PIFB accessible to readers;
• We will also be highlighting key takeaways from the public hearing at the House of Representatives;
• Further analysis of key terms of the PIAB will also be provided over the course of the week.

We thank you for following our blog.

We understand that the public hearing at the Senate on the petroleum industry reform bills will not hold this week as previously indicated. We do not have any information on the rescheduled dates and we’ll advise once we do.

The public hearing was adjourned at 2:12 pm today. There will be no further hearings on the Bills at the House of Representatives. Thank you for sticking with us. It’s a wrap until the Senate Public Hearings.

• the trusts should be established by the communities
• jettison advisory committees
• levies for gas flaring should be for community development
• Marginal fields should be awarded to the communities

• Headquarters should move to the producing states
• the registration of the trust funds should be the business of the host communities
• 5% of derivation funds and gas flaring penalties should be included in the trust funds

• 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