Governor Douye Diri of Bayelsa State has called for a review of the Petroleum Industry Act, describing it as a “time bomb” and fueling intra-communal conflict in the state.
Mr Diri made the call in Yenagoa on Tuesday in a meeting with the management of the Brass Fertiliser and Petrochemical Company project.
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This was contained in a statement on Tuesday from the governor’s spokesperson, Daniel Alabrah.
‘PIA is a time bomb’
Enacted in 2021, Nigeria’s Petroleum Industry Act (PIA) created the Host Community Development Trust (HCDT) as a replacement for voluntary corporate social responsibility schemes in oil-producing areas.
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The law makes it mandatory for oil and gas companies to commit three per cent of their annual operating expenses to the HCDT, ensuring that host communities benefit directly from petroleum operations.
The HCDT, also known as the Trust, is designed to ensure sustainable development, provide direct social and economic benefits to impacted communities, and foster peaceful relations between oil companies and communities.
In calling for its review, Mr Diri said the law is fueling intra-communal conflict, suggesting that its aim may have been defeated.
“When it was in its formative stages as a bill, we made a presentation through the Attorney General and the Commissioner for Justice. We did that after consulting with our people, communities, and chiefs. But at the end of the day, our inputs were ignored and thrown overboard as the PIA excluded the oil-producing states and their local governments.
“The federal government now interacts directly with the communities, and that is an affront to the Nigerian Constitution. The Constitution says the land belongs to the state government, and not the federal government.
“The constitution recognises communities as under the local government and the state government. These anomalies in the PIA have made the law a time bomb.
“Today, because of the PIA, there are intra and inter-communal conflicts and litigations. So even funds that have been realised for their development cannot be disbursed to the communities. If anybody thinks the state is not much important, we will then wash off our hands,” Mr Alabrah quoted Mr Diri as saying in the statement.
Diri seeks equity in Brass Petrochemicals
Speaking of the $3.5 billion Brass Fertiliser and Petrochemicals company, which Mr Alabrah said is about to commence operations in Brass Island in the state, Mr Diri solicited an “equity stake” for the state.
According to the governor, the state needed to have a stake in the company to prevent the “negative fallouts in excluding oil-producing states and local governments from the PIA,” an anomaly he said has to be reviewed.
“Let us ensure that the state is not totally excluded from being a partner in progress in this whole process. The PIA is one good example,” Mr Diri told the company management.
Mr Diri told the team that the company was conceptualised in 2009 but gained some traction during the administration of his predecessor, before it fizzled out again. He thanked the federal government for responding to the state’s requests for the company’s resuscitation.
The Managing Director of the company, Ben Okoye, said the visit was to formally inform the Bayelsa State Government that work on the $3.5 billion project would commence in October this year.
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Mr Okoye explained that the 10,000 metric tonnes of methanol per day project was delayed as there was no agreement reached on the gas component. He told the governor that President Bola Tinubu, last October, directed the minister of state for petroleum (Gas) to get it started and that the agreement was signed in January this year.
He assured the state government that necessary steps had been taken to implement the project in full, and thanked the governor for constructing the Nembe-Brass Road, which he noted would save the company up to $100,000 in logistics costs in moving equipment and materials through the river to the project site.
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