New NNPC As It Affects Host Communities Development, by Ismaila Jimoh

It was during the tenure of Former President Olusegun Obasanjo between the year 1999 – 2007 that the journey to what is now known as the new Nigerian National Petroleum Company Limited started.

Before now, Petroleum Industry Bill [PIB] which gave birth to the NNPC Limited had suffer series of setbacks before it finally scale through with the assent of President Muhammadu Buhari last September.

The old NNPC, since inception in 1977 has been a state- owned and state- run corporation, the new Petroleum Industry Act [PIA 2021] also makes the new NNPC enjoy the same status, but section 53 [5-8] of PIA2021 evinces government’s intention to set in motion the process of immediate commercialization and privatization of not only the operation, but also a possible future private ownership of share in the new NNPC Limited.

As a matter of fact, to show the seriousness the government attached to the success of the NNPC Limited, the express provision made by the PIA2021 for the Minister of Petroleum Resources to cause the NNPC Limited to be incorporated with the Corporate Affairs Commission [CAC] within 6 months from the commencement of Act was achieved within 6 weeks of signing the PIA into an Act.

That clearly demonstrated government eagerness to implement the statutory and structural changes to the NNPC to make the new NNPC a world – Class Company.

Among the 5 chapters Petroleum Industry Act 2021 contains is that of host communities development. These host communities can be found within states like Rivers, Delta, Bayelsa, Akwaibom amongst others.

It a well – known fact that most of the host communities are having a peculiar problems ranging from slow poisoning of the waters of the areas and the destruction of vegetation and agricultural land and good water source by oil spills which occur during petroleum operations.

This implies that the local communities have to bear the burden of living with polluted water, infertile farmland, lost of biodiversity and all the rest of it.

In a bid to tackling environmental problems associated with host communities in respect of all petroleum operations, the Petroleum Industry Act 2021 which the NNPC Limited relies on has set aside 3 percent operating expenditure of oil firms to host communities. This 3 percent has nothing to do with the 13 percent derivation fund as enshrined in section 162 sub – section 2 of the Nigerian Constitution for the oil producing communities.

Unlike the 13 percent of oil revenue that will go to communities through the state government, the 3 percent allocated by the PIA2021 will come from the oil company’s operating expenses to the special trust fund created for host communities.

It is expected that the special trust fund would fostering peace and cordial relationship between licensees and lessees and the host communities.

To reciprocate the gesture, on the part of the host communities, they are now going to be held responsible for any act of pipeline vandalism and civil unrest in their areas unless if such interruption is caused by technical or natural cause, if not, the cost of such is going to be removed from the host community development fund.

Certainly, Petroleum Industry Act 2021 has come with a paradigm shift from the old order of doing things and the on- going reform holds a lot of promises if well implemented especially in the area of catering for the welfare of the people in the oil producing communities.

Those saddle with the responsibility to ensure that NNPC Limited live up to the expectations of positive transformation includes: Senator Ifeaanyi Ararume as the chairman of the board, Mele Kolo Kyari as Chief Executive Officer, Umar Ajiya, Chief Financial Officer, respresentative of the six geo- political zones includes: Tajudeen Umar [North East], Lami Ahmed [North Central], Mohammed Lawal [North West], Margaret Chuba Okadigbo [South East], Pius Akinyelure [South West] and Constance Harry Marshal [ South South].

With the caliber of personalities that constituted the board of NNPC Limited, one can be rest assure that this new arrangement is going to yield a positive result for all.