Host Communities tackle multinational oil companies over 3% non-remittance operational cost

Multinational Oil Companies are under pressure from the host oil communities in the Niger Delta Region over refusal to remit 3% operational cost to them in line with the Petroleum Industry Act, which was passed into law in 2021.

Two years after the law came into existence, oil companies continue to snub remittances which was in clear breach of law, hence, the host communities are demanding for revocation of of licenses for violating the Nigerian law.

Citing relevant sections of the Petroleum Industry Act (PIA) 2021, particularly, Section 257 ( 2) which came into effect in August 2021, stipulating that Oil and Gas Companies should remit 3% of their annual operational expenditure to affected host communities, and having failed to do so, the HOSTCOM, insisted that the Federal Government should come hard on the multinational oil companies and revoke their licenses.

Speaking at a press conference in Abuja on Wednesday, stakeholders from the affected host communities have cried out, saying, they should not allow the foreign oil companies to treat them with disdain.

The HOSTCOM, which was led by Dr. Benjamin Tamaranebi, expressed dismay that the oil companies have refused to remit the 3% to HOSTCOM two years after the passage of the PIA.

Tamaranebi described the action of the IOCs as 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.