Oil Communities to Own Petroleum Assets

National News

Oil Communities to Own Petroleum Assets

Web Engineer

January 20, 2010

The Minister of State for Petroleum Resources, H. Odein Ajumogobia has lauded the federal government for taking a bold step towards involving the oil producing communities in the ownership structure of Nigeria’s petroleum assets. He stated this during the inaugural meeting of the Presidential Committee On he Modalities for the Involvement of Host Communities in the Ownership Of Petroleum Assets In Nigeria which was held in the conference room of the Ministry.

The minister said the federal government set up the committee to expeditiously deliberate on examining the constitutional, institutional and legal framework for effecting host communities participation, determine the definition of “host communities” for the purpose of benefiting from the proposal and to examine the level and mechanism by which equity would be acquired by host communities including funding and to make appropriate recommendations to Government amongst others; using the proposal initiated by the Special Adviser to Mr. President On Petroleum Resources, Dr. Emmanuel Egbogah as a guide.

To achieve these goals and objectives, the Minister who is also the Chairman of the Committee stressed that its membership would be expanded to include relevant government agencies, community leaders/traditional rulers and representatives of the militant leaders for an all inclusive engagement. Against this backdrop, the Minister said that he would canvass for one month extension to submit its report to the federal government.

Responding, the initiator of the proposal, Dr. Emmanuel Egbogah opined that it was designed to give the oil producing communities a stake in the ownership of Nigeria’s petroleum assets; using the proposed Incorporated Joint Ventures as the medium for achieving this objective.

Dr. Egbogah explained that the host communities should receive 10% of the net revenue profit from crude oil sales while 41% goes to the Federal Government. The International Oil Companies according to the Special Adviser, would receive 40% of the equity in the existing joint ventures and 9% to Nigerians willing to invest in the Incorporated Joint Ventures ( 7% in the case of SPDC JV), stressing, no single individual would acquire more than 0.1 of the shares of each IJV on the stock market.

While admitting the challenges to be addressed before its implementation, he emphasised that the concept of host communities’ participation in ownership of petroleum assets in oil producing countries has been proven globally as the antidote against violent agitations and militancy.

Other members of the presidential committee present at the meeting include the Minister of State for Finance, Mr. Remi Babalola, representatives from the Presidency and Office of the Secretary to the Government of the Federation. Top Officials of the Ministry including the Permanent Secretary, Mrs. Elizabeth Emuren and Director, Planning Research Statistics also attended the inaugural meeting.

It would be recalled that President Umaru Musa Yar’Adua approved the constitution of the Presidential Committee on the modalities for the involvement of Host Communities in the Ownership of Petroleum Assets in Nigeria as part of its post-amnesty programme. The Committee comprises of the Hon. Minister of State for Petroleum Resources as its Chairman, his counterpart in Ministry of Finance, Special Adviser to Mr. President on Petroleum Matters, Special Adviser to Mr. President on Communications amongst others. The Ministry of Petroleum Resources is to serve as its Secretariat. Also, its sub-committee was inaugurated by Mr. Vice President on 16th December, 2009.