Senator Mathew Urhoghide has disclosed that the lawmakers from the South-South geopolitical zone supported the 3 percent for host communities in the recently passed petroleum industry act to save and encourage investors in the petroleum, oil and gas sector of the country.
The bill passed by the national assembly had since been assented to by President Muhammadu Buhari.
Urhoghide, who is the chairman senate committee on public account and member of upstream petroleum, made the disclosure to newsmen in Benin City, saying that the 3 percent was agreed on to save the country and the industry from the “Venezuelan” experience.
He said the insistence on 10 percent for host communities made investors to flee from the Venezualan country to countries where there are more favourable, enabling laws and environment.
The senator representing Edo South Senatorial district in the national assembly, however, assured host communities in the oil producing states that the provision is subject to amendment.
“When the bill was being proposed, we had our public hearing on it and the real investors equally made their points clear because it is an international businesses and it is ruled by indices that are dictated internationally. So, they are there carrying their investments around the world; if it is favorable they drop it and if it is not favorable, they take and go to another country.
“In the senate, the day we debated that bill, we invited the General Managing Director of NNPC and Minster of State Petroleum to brief the senate and they came up with all these details for us to see.
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“The fears of some of us senators, was that of the Venezuelan experience where investors said they are no longer going to invest in the country because the conditions given by the government are unfavourable and we don’t want that.
“Again, the issue of crude oil in the world is that there is a trend going on. People are no longer interested in oil as a source of energy. Now, they are beginning to get electric cars and nobody wants to use petrol or diesel to drive their engines anymore.
“So, most countries are trying to quickly use their oil resources to build up another national assets and because of that, fossil fuels has become another source. Renewable energy are sources opening up in the world.
“Everybody in the world are running away from crude oil. So, Venezuelan said they should leave their oil alone if they are not able to pay 10 percent and that is what they called the ugly Venezuelan experience, and we don’t want it.
“We are caught in between because we have a mono product that we run which is crude oil. So, that is where the problem is. Then our brothers in the north and south said we should allow the investors to come in because in the last ten years we have not had investments in that area”, he said.
On the sum of $530million that will be accruing from the 3 percent to the host communities trust fund, he explained that the lawmakers unanimously agreed that it should be vested on the Nigeria Sovereign Investment Authority to utilise for the people instead of the state governors.
“So, we try to manage all the provisions of the bill. It must be a win-win between the people who are privileged to have it as a natural resource and the people who are investing.
“So, we must be able to strike a balance to say we want them to invest because we can’t do it ourselves, and we too want to get the benefit of having it as a blessing”, he added.
He further posited that apart from the 3 percent to the host communities, they are also entitled to 100 percent proceeds derived from gas flaring which would be used for environmental regeneration and welfare for the people of the host of communities.
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