Africa Oil & Gas: Communities to get half Nigeria flare penalties

Nigeria - Gas-flaring-offshore-splash-During a June 4 public hearing on the petroleum industry bill (PIB), the Nigerian senate has said that host communities in producing states will be entitled to about 50% of gas flaring penalties, under the PIB once signed into law. Currently, communities where gas is flared get no benefit from this revenue stream.

During the hearing, the senate president Abubakar Bukola Saraki said that its standing committee seeks to have further input on the PIB’s three parts: the Petroleum Industry Administration Bill 2018, the Petroleum Industry Fiscal Bill 2018, and the Petroleum Host and Impacted Communities Bill 2018.  It’s under the latter that the communities’ entitlement has been incorporated, in an attempt to overcome the pitfalls of past neglect. Advocating this, Bayelsa state’s attorney general, Kemeasuode Wodu, said that – if these communities are properly catered for – they can act as a frontline for the security of pipelines.

The senate has yet to draw up a mechanism enabling the 50% of flaring penalties to be directed to communities, but has said the issue will be discussed and decided within a week.

Saraki said the outcome of the PIB hearing is very important to the Nigerian economy and to the livelihood of all Nigerians as well as the interests of investors: “The objective of the Petroleum Industry Administration Bill is to transform the administration of the upstream, midstream and downstream sectors of the Nigerian petroleum industry.”

“The objective of the Petroleum Industry Fiscal Bill is that it will enhance our international competitiveness and make Nigeria a choice destination for oil and gas investors,” he added.

The current penalties for gas flaring are practically non-existent as international oil companies pay ‘charges’ which can be offset against their tax, rather than ‘penalties’.

However once the PIB becomes law, it will become more stringent for those flaring gas. The PIB public hearing is part of the Nigerian senate’s strategy to progress the PIB, which a year ago was unbundled into three separate bills, through its legislative stages to adoption.source:NGW; by Omono Okonkwo

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