The Minister of State for Petroleum Resources, Timipre Sylva, has opposed an increase in the equity share holding provided for host oil communities in the Petroleum Industry Bill (PIB), saying the proposed 2.5 per cent share for them was fair.
Mr Sylva spoke on Tuesday barely 24 hours after the host communities, under the aegis of Host Communities of Nigeria Producing Oil and Gas (HOSTCOM), rejected that provision of the bill and demanded a higher percentage.
PREMIUM TIMES reported how HOSTCOM, at the public hearing on PIB at the Senate, rejected the proposed 2.5 per cent and demanded that 10 per cent equity share holding be allocated to the host communities.
This paper also reported how some oil producing companies raised concerns on the bill and made recommendations as well.
The two-day hearing began on Monday and ended on Tuesday.
Oil marketers and other players in the industry were present at the forum to make submissions on the legislation.
HOSTCON National President, Benjamin Tamaranebi, had argued that the communities deserved 10 percent after 60 years of marginalisation and bearing the brunt of the negative impacts of exploration and exploitation.
But in a chat with journalists, Mr Sylva said the percentage proposed was fair.
The minister, who is also a member of the host communities, said as far as the executive was concerned, the proposed percentage was fair to the host communities, to the country and to the companies.
“The 2.5 per cent that was proposed in the bill is fair. I speak advisably as a member of the Host Community myself,” he said.
“If you have to look at it properly, you will see that 10 per cent of profit is different from 10 per cent of the Operating Cost (OPEX).
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“Before now, you had the provision of 10 per cent of profit and profit means that if I don’t declare it, you don’t have anything. I can decide to say 100 per cent of profit and not declare any profit, so you don’t get anything.
“But in this case, it is 2.5 per cent of the OPEX. So, at the end of the year, you look at your operating cost and take 2.5 per cent of that cost to the budget of the next year.”
The House of Representatives is expected to commence hearing on the bill on Wednesday.
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