Oil Producing States Waste N7.3Trillion in 14 Years-Senators

Northern senators have accused states benefiting from 13 per cent derivation fund for oil-producing states of squandering N7.3 trillion since 1999 when the fund was established.

The accusation was the highlight of the debates on the general principles of the sensitive Petroleum Industry Bill (PIB) which provides for the establishment of a Petroleum Host Communities Fund, an exploration agency to seek new oil finds, and the perceived unlimited powers of the petroleum minister topping deliberations.

Ahmed Lawan (Yobe, ANPP)  leading mainly senators of northern extraction faulted the PIB’s provision which earmarked 10 per cent of the net profits of oil companies for petroleum host communities.

Lawan said that the proposed Petroleum Host Communities Fund was out of place as the current 13 per cent derivation was supposed to be for the benefit of host communities but state governments have misappropriated the extra funds in the last 14 years.

Also, northern senators faulted the structure of the proposed National Oil Exploration Frontier - touted as a largely northern-driven bargain as part of ongoing ethnic/political positioning on the PIB.

At present, the exploration frontier will function as a department under the proposed Petroleum Technical Bureau, an arrangement northern senators faulted,  insisting that the oil exploration frontier must be established as a “stand-alone” agency to effectively pursue new oil finds reportedly in the north and other regions of the country.

Senators Ali Ndume (Borno,ANPP), Isa Galoudo (Kebbi, PDP) faulted the seeming enormous powers of the petroleum minister and the implication of the proposed Petroleum Host Communities Fund on the revenue accruing to the three tiers of government.

 Galoudo said the fund would unduly short-change beneficiaries of the country’s consolidated revenue account.

However, Senator BukolaSaraki (Kwara,PDP) cautioned lawmakers against dwelling on divisive and contentious areas of the PIB at the risk of losing billions of dollar investments which have been withheld by international oil companies (IOCs) seeking sure footing on the direction of the PIB.

Saraki suggested that deliberations be tailored to strengthen the PIB to block leakages in Nigeria’s crude oil outputs. He said a situation where IOCs determine and dictate Nigeria’s product figures must be corrected by the new PIB, if passed.

Senate leader Victor Ndoma-Egba, in lead debates, said the Seventh Senate chases history if it passes the PIB after past ill-fated attempts.

Ndoma-Egba however noted that the provision for the source of funding for the Petroleum Technology Development Fund (PTDF) was “inadvertently or deliberately” omitted in the current PIB.