PIB: South South Reps and Northern Counterparts Disagree Over Revenue Sharing Formula

by on May 21, 2015

There was a sharp division among members of the House of Representatives was  Wednesday, over  the formula for sharing how much revenue accrue to the country from exploratory licenses issued to prospective companies in the Petroleum industry.

The lawmakers while considering the report of the Ad-hoc committee on Petroleum Industry Bill (PIB), suspended discussions to honour the late Senator Ahmed Zana from Borno.

Members disagreed over the provision of clause 209 of the Bill.

Kyari Gujbahu from Borno who had raised observation on the clause which deals with holders of exploratory license to prospective operators in the industry and the monetary benefit therein, argued that in the draft report of the committee, revenue from activities of oil companies to be used for the take-off of River Basins exploratory activities was pegged at $4 per barrel of gas and 20 cents for a Barr el of crude.

However, when the clause came up for consideration, the said provision was missing, prompting accusation and counter-accusation by lawmakers from the South-South and their counterparts from the North.

He noted: “In the draft report which was referred for final compilation by committee, the sharing formula between government and oil companies for the development of River Basins across the country was $4 per barrel.

“I now wonder why that has disappeared from this clause as contained in this report”, he said.

Abdurahman Terab also from Borno concurred, saying that: “This suggestion is not a new thing in play in countries where there is oil. It’s been in use in Chad, Niger and even Ghana.

“This fund is not meant to develop the areas where the Basins are located but meant to development the Basins for the purpose of exploration of resources therein in furtherance of the nation’s economic growth”, he argued.

Sokonte Davies from Rivers however disagreed that there was no way the amount could have been pegged at $4 per barrel which he said is too much a sum to be used as a take off fund.

“Even the 20 cent per barrel is a lot of money that can be used to kick start any exploration activity anywhere. If we must do it, let’s leave it at 20cents per barrel of gas and 2cents per barrel of crude”, he submitted.

At this point, a member of the committee, Ali Ahmad from Kwara, moved for an amendment saying that the 20cents be substituted for $2 per barrel, which amounts to $1.2 billion per annum.

He said the conversion should be increase from 20 cents to $2 for gas, and from 2 cents to 20 cents for crude lifting as overall reduction from the initial $4 per barrel proposed.

Given the disagreement, Deputy Speaker in chair, Emeka Ihedioha intervened, urging members to sheath heir swords and allow the committee go back and take a second look at the clause and report back.

“Whatever interest you have can’t be more than the national interest that this parliament and this House in particular has”, he stressed.

Before adjourning consideration of the report till Tuesday next week, the House referred clauses 347 to 410 back to committee for more legislative actions and report back to it.


Source: Daily Independent

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