House of Reps Public Hearing Day 2 – Pandef, PCTS & Ovia Ethnic Nationality

Petroleum Contractors Trade Section

  • Give consideration to global competitiveness
  • Adverse impact of the fiscal terms on deepwater will have a significant impact on jobs in the industry


  • Hostcom should be empowered to set up the National host community trust fund
  • 10% equity contribution with 5% taken from NNPC and 5% from the IOCs

Ovia Ethnic Community

  • Communities to be shareholders in the oil and gas companies
  • Shares should be given to Nigerians
  • Host communities should be properly identified
  • Headquarters of oil companies should be where oil is produced

House Public Hearing Day 2 – Bayelsa State Government

  • 10% equity stakeholding for communities
  • gas flaring penalties to be paid to the host communities
  • headquarters to be located where the oil producing companies have their highest production
  • oil producing companies must establish institutes of training in the states where they are located
  • final solution lies in operating a truly federal government

House of Reps Public Hearing Day 2 – Itsekiri Ethnic Nationality

  • recognise and appreciate the effort taken thus far
  • Host community should be involved in the appointment of trustees
  • recognition should be for ethnic nationalities
  • it should not be based on headcount but on the quantum of resources derived from the community
  • the contribution to the host community fund should be 7.5% of the production of the settlor
  •  recognise the difference between contributions to host communities as opposed to impacted communities

House of Reps Public Hearing Day 2 – Host Community Oil and Gas

  • Incorporate a National host community trust fund
  • trustees should be appointed by the Host Communities of Nigeria
  • existing CSR obligations should not be migrated but continued
  • 10% equity participation to be paid to the Host Community Trust Fund
  • adopt the constitution of the National Host Communities of Nigeria
  • gas flare penalties to be included in the trust

House of Reps Public Hearing Day 2 – NNPC

  • Ownership of oil and gas should be explicitly vested in the State
  • The bills should incentivise the development of oil and gas in the country
  • Simplify fiscal systems for ease of administration
  • Regulatory issues should not be included in the Bill but left for the Regulator
  • The government should be able to clawback where there are excess profits
  • Should not legislate on issues which should be dealt with by contract

House of Reps Public Hearing Day 2 – Nigerian Gas Association

  • Significant improvement on previous bills, but needs to address gas in a way to realise its potential
  • Gas should be treated as an enabler rather than a source of tax revenue
  • If gas is used properly it has a significant leverage effect on the economy
  • Incentives similar to AGFA should be put in place
  • Cost efficiency factor should not apply to gas
  • Gas royalties should be paid in Naira
  • Condensate should be treated as gas
  • A clearer definition of upstream, midstream and downstream
  • Sample calculation tables should be included in the bill to avoid disputes with the FIRS
  • All royalties should be in tranches
  • Marginal fields should be specifically protected

Public Hearing Day 2- Spaces for Change

    • Obligations to establish trust should not be by the oil companies
    • What happens when there is more than one company operating in a host community?
    • The obligation to establish the trusts should be placed on the community
    • NPRC should have the power to determine which communities fall within their areas of operations
    • Consider including local government authorities
    • Oil companies should not appoint the board of trustees
    • Bill is silent on the composition of the board of trustees
    • Increase contributions to 5%
    • Contributions should not be deductible
    • Disbursement procedures to be clarified
    • No reference to environmental protection

House of Reps Public Hearing Day 2 – IPPG

IPPG Chairman

  • Pleased with clarity in the bill
  • PIFB
    • PIT – onshore and shallow water tax should be the same
    • Re-examine the fiscal terms for gas development
    • Assessment of royalties includes elements that cannot be controlled by producers
    • Production allowances should be available to all players
    • Cost efficiency factor should not measure costs that are outside the control of the producers. Should exclude statutory charges, CHA
    • APIT trigger price should be US$ 80
    • Exploration requires incentives to grow Nigeria’s reserves
    • Lease rental appears to be arbitrary
    • Existing frontier basins need to be grandfathered into the Bills
    • Pass the Bill now
  •  PHICB
    • Definition of Host and Impacted Community needs to be tightened up
    • Timelines for the establishment of the trust should be revised