High production cost: Senate seeks relocation of oil firms to host communities
The Senate has mandated its committees on Petroleum Resources Upstream, Downstream Petroleum Sector and Gas to liaise with the Ministry of Petroleum Resources and the Presidential Implementation Committee on the Petroleum Industry Act (PIA), to facilitate the relocation of oil and gas companies in Nigeria to their various operational bases in host communities to ensure smooth operations.
The upper chamber reached the resolution after it considered a motion on the “Urgent need to encourage all Multinational and Nigerian Oil and Gas Companies to relocate to their Operational Bases.”
The motion was sponsored by Senator Albert Bassey Akpan (PDP, Akwa Ibom North East) and co-sponsored by 23 other Senators.
Bassey in his motion said, “The senate notes with concern that multinational and Nigeria oil and gas companies have over the years been operating from their respective operational bases until militancy and insecurity in the host communities in the Niger delta became the order of the day.
“Also notes that the reason proffered by the oil and gas companies for not relocating to their host communities has always been due to insecurity and hostilities in the host communities.
“Aware that operating outside the host communities and operational base is the reason for the high cost of production which has been the bane of the country’s oil and gas industry, militating against maximum revenue from crude oil and gas sales to the federation account;
“Recalls that this high cost of production has been one of the most contentious elements of our industry value chain;
“Convinced that the recent passage and signing into law of the Petroleum Industry Act, 2021(PIA) by the National Assembly and the President of the Federal Republic of Nigeria respectively, is a major milestone towards the restoration of a lasting peace in the host communities;
“Further convinced that the Petroleum Industry Act, 2021, now places certain responsibilities on the security, peace and safety of oil and gas infrastructure on the host communities to safeguard and ensure peaceful coexistence between oil and gas companies and their host communities;
“Further convinced that is an opportunity to restore, recover and rehabilitate the massive and huge infrastructural facilities abandoned by the various oil and gas companies in their various operational bases to ensure their full utilization; and
“Assured that the relocation of these companies to their host communities will further boost development in those areas and enhance the corporate social relationships and strengthen out collective resolve to considerably reduce the contentious cost of production and ensure adequate returns to federation account.”
Accordingly, the Senate mandated its committees on Petroleum Resources Upstream, Downstream Petroleum Sector and Gas to liaise with the Ministry of Petroleum Resources and the Presidential Implementation Committee on the Petroleum Industry Act (PIA), to facilitate the relocation of oil and gas companies in Nigeria to their various operational bases to ensure smooth operations.
Contributing, Senator Biobarakuma Degi-Eremienyo (Bayelsa East) said the agitations and problems within the oil and gas producing communities was as a result of their inability to easily access the management of the multinational companies to table complaints.
“I believe that if this motion is passed and implemented, it will go a long way to assuage the yearnings and apprehension of the people within these host communities.
“Mr. President, as a matter of fact, the cause of this situation is that the government of these areas are not even benefitting from the revenue, that is, payment of tax, within the localities that they are exploiting this oil and gas, because the workers will claim that they are not resident in these areas.
“The payee is not accruable to the state government. These are some of the things the people suffer on account of locating the headquarters away from the source of the raw materials,” he said.
The lawmaker stressed that the full benefits of the Petroleum Industry Act would not accrue to the Federal Government if effort isn’t made to have the multinational companies relocate to the host communities where oil and gas is produced.
