PIA: Host Communities take on multinational oil companies over refusal to pay 3% operating cost

***Presses for revocation of licenses for violation of the Nigerian law

Two years after the enactment of the Petroleum Industry Act (PIA) 2021 the host communities (HOSTCOM) producing oil and gas have condemned the deliberate violation of the Act by oil companies operating in their area who have refused to remmit the 3% operating cost as stipulated by the act.

Section 257 ( 2) of the Petroleum Industry Act, which came into effect in August 2021, stipulates that Oil and Gas Companies should remit 3% of their annual operational expenditure to affected host communities .

But two years after the provision of the law, none of the Oil Producing Companies has complied with it , prompting  stakeholders from the affected host communities to cry out in Abuja on Wednesday

National President of HOSTCOM, Dr. Benjamin Tamaranebi, at a press conference on Wednesday in Abuja, expressed dismay that the oil companies have refused to remit the 3% to HOSTCOM two years after the passage of the PIA.

He said the action of the IOCs was unacceptable, adding that it is a precursor to crisis in the affected communities .

Although Dr. Benjamin passed a vote of confidence on the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), a creation of PIA, for tackling the challenges facing the HOSTCOM, he said the regulatory agency needs to 

HOSTCOM, therefore, called on the federal government to compel oil companies operating the region to pay their 3% operating derivation to HOSTCOM as stipulated by the Petroleum-based Industry Act (PIA).

Tamaranebi who was joined at the press conference  by other stakeholders from the Host Communities, called on the Nigerian Upstream Petroleum Regulatory Commission ( NUPRC) to do the needful against the defaulting oil companies in line with relevant provisions of the PIA .

He declared that each of the defaulting oil companies has a penalty of $ 1,825 million to pay on the rate of $2,500 per day as stipulated by PIA .

“We call on all meaningful stakeholders to join hands with the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to facilitate the speedy implementation of the 3% OPEX, which is overdue by the settlors.

“In fact, we call on the NUPRC to list out all the settlors who have refused to comply with the PIA 2021 or else we will have no choice than to escalate the issue of noncompliance to section 234 of the PIA 2021 and the Host Communities Development Regulation No 114 of 2022 to the President who is the Federal Minister of Petroleum Resources for the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to invoke the revocation of their licenses for violating the extant regulatory Laws of Nigeria and protocols of the United Nations Framework Convention on Climate Change (UNFCCC) Clean Development Mechanism (CDM) green house gas (ghg).

“The 3% is needed by the various host communities since all the former MoUs they had with the oil companies have been set aside by the provisions of the PIA .

“Stakeholders across the affected host communities have been trying their best to maintain peace which however may be jeopardized with continued violation of the 3% remittance by IOCs,” he said.

He added that the required Host Communities Development Trusts ( HCDTs) for management of the 3% remittance have been set up by 84 out of the 135 communities.

On the issue of oil theft and pipeline vandalism, one of the stakeholders , Engineer George Bucknor called on government to widen the scope of community oriented approach by engaging more of the locals , on pipeline and oil installations protection .

“The Tompolo example has given the desired results , more of such , should be done by government,” he said .