PIB: Lawan Laments $30 Per Barrel Oil Production Cost

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Host communities exchange blows at public hearing

Deji Elumoye and Udora Orizu in Abuja

President of the Senate, Dr. Ahmad Lawan yesterday rejected the $30 per barrel production cost of the nation’s crude oil, saying it is too high when compared to what is obtainable in other oil producing nations.

He has, therefore, canvassed a reduction in the crude oil production cost by International Oil Companies (IOCs) operating in Nigeria.

Lawan, who spoke yesterday when he played host to a delegation of Oil Producers Trade Section (OPTS) in his office, declared that the new Petroleum Industry Bill (PIB) presently before the National Assembly would accommodate provisions to ensure reduction in the crude oil production cost when the bill is eventually considered and passed by the end of the first quarter of this year.

This is coming as a coalition of Civil Society Organisations (CSOs) and oil-producing communities in the Niger Delta yesterday rejected the PIB, 2020, currently before the National Assembly.

The host communities also exchanged blows at the public hearing.

Lawan said: “The cost of production in Nigeria is a major concern in the oil industry. My colleagues in the committees that are oil and gas related know better.

“But from the little I understand, when Saudi Arabia maybe spends $5 to produce a barrel, we spend about $30 to produce the barrel in some cases.

“The time has come for us to ensure that the cost of production is beaten down to a more meaningful and profitable production cost”

The Senate President also made case for the host communities saying the welfare of the communities should be paramount in PIB provisions.

His words: “I believe that the Petroleum Industry Bill, making provision for funds to go into the host community funds, would probably this time around get
us a better deal with the communities.

“We must do everything possible together to ensure that the host communities benefit wherever they are supposed to benefit, not only the host community development fund, but in the Niger Delta Development Commission (NDDC) and other areas of government intervention – the Amnesty Programme and Ministry of Niger Delta Affairs

“How do the host communities benefit, because we need to stabilise those areas so that we have cheaper production costs”.

Speaking earlier, leader of the OPTS delegation, Mr. Mike Sangster of Total, said the purpose of the visit was to engage the National Assembly on ways to modify the PIB to ensure its success when passed and signed into law.

While extending the delegation’s support to the ongoing effort to provide a legal framework for the oil and gas industry in Nigeria, Sangster prevailed on the National Assembly to accommodate provisions in the PIB that would protect the existing investments of foreign investors.

Meanwhile, at the public hearing, some CSOs and host communities said that the proposed legislation does not protect the interest of communities from which the federal government and oil mining companies, extract petroleum resources.

Speaking, the spokesperson of the CSOs and host communities in the Niger Delta, Mr. Botti Isaac accused the House of Representatives’ Adhoc Committee on PIB, of ignoring the interest of host communities.

He also accused the National Assembly of not allowing a fair and adequate opportunity for vulnerable stakeholders in the region to have a say in the legislative processes towards passing the PIB, as both chambers denied their members access to the public hearing hall.

Meanwhile, making its presentation at the hearing, the Chairman, Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC), Mr. Elias Mbam told the lawmakers that the bill may cut the flow of revenue to the federal government.

Corroborating Mbam’s position, the Minister of State for Budget and National Planning, Mr. Clement Agba cautioned against losing tomorrow’s future for today’s gains.

Earlier, before the commencement of the day two of the hearing, members of the host communities engaged in physical altercation.

The fight broke out when the Host Communities of Nigeria Producing Oil and Gas (HOSTCOM) was called to the podium to make presentation by the Chairman of the Ad-hoc Committee on PIB, Hon. Mohammed Monguno, but there was disagreement amongst them leading to exchange of blows until security operatives intervened.

To this end, lawmakers and other participants scampered for safety, and reconvened after the dust settled.

One of the men involved in the fight, who identified himself, as High Chief Benjamin Tamaranebi, speaking to journalists said the fight was all about the demand for 10 per cent equity shares by the host communities