Category: News

• 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

• Seeking amendments to various provisions of the PIAB and the PHICB
• State governments should be involved in the administration of the host communities
• Operating companies should have their headquarters in the states of operations

• PHICB
  • Obligations to establish trust should not be by the oil companies
  • What happens when there is more than one company operating in a host community?
  • The obligation to establish the trusts should be placed on the community
  • NPRC should have the power to determine which communities fall within their areas of operations
  • Consider including local government authorities
  • Oil companies should not appoint the board of trustees
  • Bill is silent on the composition of the board of trustees
  • Increase contributions to 5%
  • Contributions should not be deductible
  • Disbursement procedures to be clarified
  • No reference to environmental protection

IPPG Chairman

• Pleased with clarity in the bill
• PIFB
  • PIT – onshore and shallow water tax should be the same
  • Re-examine the fiscal terms for gas development
  • Assessment of royalties includes elements that cannot be controlled by producers
  • Production allowances should be available to all players
  • Cost efficiency factor should not measure costs that are outside the control of the producers. Should exclude statutory charges, CHA
  • APIT trigger price should be US$ 80
  • Exploration requires incentives to grow Nigeria’s reserves
  • Lease rental appears to be arbitrary
  • Existing frontier basins need to be grandfathered into the Bills
  • Pass the Bill now
•  PHICB
  • Definition of Host and Impacted Community needs to be tightened up
  • Timelines for the establishment of the trust should be revised

 

Public Hearing commenced at 10:28 with presentations from OPTS and its members

OPTS Chairman

• PIFB
  • JV oil will grow

• • Sanctity of contract generally observed

• • Deep offshore royalties significantly increased

• • Exclusion from production allowances does not incentivize the production of oil or gas in deep water

• • The sales of gas to the domestic market

• • Multiple levels of ring-fencing may inhibit simplicity of implementation and may be a source of dispute

• • Excessive powers of the Commission – the setting of rents, metering points

 

• PHICB
  • Excessive financial burden on OPTS members in view of all the taxes and levies imposed on the industry

• • Does not take into account the CSR obligations to communities outside

• • Recommendation that the contribution should be deducted from current contributions to NDDC

• • The bill as proposed imposes significant administrative burden

• • No clear definition of Host and Impacted Communities – Bill should set clear guidelines

• • Disputes to be resolved by the Commission – state governments should be accorded a role in disputes resolution

 

MD Exxon Mobil

• PIFB
  • JV gas projects will be negatively impacted
  • Small and medium-sized deepwater developments will remain stranded

MD Chevron

• PIFB
  • Lack of incentives for deepwater fields – only 4% in the current portfolio as opposed to 49% under the existing fiscal terms
  • Small and medium-sized deepwater fields will be stranded – specific terms based on field size should be proposed
• PHICB
  • Definition of Host and Impacted Communities ambiguous