MEMORANDUM TO MINISTERIAL SESSION
- Opening:
1.01 The Technical Session of the 8th National Council on Hydrocarbons (HCH) meeting was held at State Event Centre, Asaba, Delta State on Monday 10th – 13th December, 2024. The session was presided over by the Permanent Secretary represented by Engr. Kamoru Busari, the Director Upstream, Ministry of Petroleum Resources (MPR). The theme of the meeting was “The Petroleum Industry Act (PIA) 2021: The Journey So Far”.
1.02 Attendance:
Delegates at the meeting included officials from Federal and State Governments, Security Agencies, Civil Society Organizations, Tertiary institutions, oil and gas agencies and Ministry, International Oil and Gas Companies (Chevron Nigeria, Shell Nigeria), Indigenous Oil and Gas Companies and MDAs including Ministry of Petroleum Resources, Ministry of Industry Trade and Investment, Host Community Development Trust; Delta Ministry of Oil and Gas, Petroleum Training Institute; PTDF, NUPRC, NNRA, NMDPRA etc.
2.0 Highlights of Addresses:
In the opening ceremony, the Honorable Commissioner for Oil and Gas, Delta State, welcomed the participants to the event and describe the event as “a more agenda” encompassing peace, productivity, security etc. He recognized the important of collaboration between the Government and private sectors. He noted that the absence or no recognition of the State Government in the PIA must be reviewed for more inclusivity.
The opening address presented by Permanent Secretary represented by Engr. Kamoru Busari, Director Upstream, stated that the NCH has come to stay as the Ministry’s flagship event aimed at garnering ideas that will propel good policy formulation in our oil and gas sector. The mandate and mission of the Ministry can only be achieved when good and implementable policy are formulated and implemented to letter which is the principal reason we converged annually for this Council. To achieve the Mandate, the Ministry exercises supervisory role over the Parastatals, Operators and Stakeholders to ensure compliance with all applicable laws and regulations in the oil and gas sector.
Finally, the Permanent Secretary urged all to make every moment in this technical session count, as the Council objectively and critically examine all memoranda submitted to ensure that we make quality recommendations to the Council to be part of good policies that shall be fashioned from this gathering to advance our hydrocarbons industry and the Nation at large.
The Goodwill Messages was given by the Principal – Petroleum Training Institute, Dr. Samuel Onoji thanked the State Government for hosting NCH and urged the participants to focus on innovative solutions and actionable recommendations to propel the Oil and gas industries in Nigeria.
The total numbers of Memos reviewed was thirty eight (38) Memoranda and the Memoranda were classified into Five (5) categories:
- Host Communities related Issues
- Issues on Mandate and institutional strengthening within PIA
- Harmonization/ Intuitional Support for the Ministry’s Flagship Program, Nigeria International Energy Summit (NIES) & Nigerian Hydrogen Conference (NHC)
- Gaps in the Implementation of PIA
- Inclusion of Sub-National Government in the PIA
Below are the syndicate group’s suggestions and the recommendation to council for approval
| S/N | SYNDICATE GROUP | SUMMARY OF RECOMMENDATIONS/REQUESTS AS CONTAINED IN MEMOS | RECOMMENDATIONS OF THE TECHNICAL SESSION FOR COUNCIL’S APPROVAL | COUNCIL REMARKS |
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GROUP 1: Host Communities related Issues (Memos attached as Annex I)
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· Non-implementation of the 3% of the PIA: A way forward is considered to be an immediate implementation of the 3% to the Host Communities.
· Short changing of the landlords by the Oil companies: it was recommended that this portion of the PIA should be amended.
· Non-payment of the Gas flare penalty money: it was recommended that there should be immediate payment of the agreed money to Host Communities Central Trust Fund.
· The IOC and DOC have not been carrying out their social responsibilities and it is recommended that they take up their responsibilities by providing required social-amenities for various communities of their operational zone. · Identified professionals and technocrat must be engaged by the Host Communities to execute projects at the grassroots.
· Funds must be paid into the central purse of the HOSCOM, failure to do so, penalty must be meted to the Oil Company involved. |
· Urge the Settlors and the regulators to ensure that the 3% are collected and disbursed to the Host Communities Development Trust (HCDT) as at when due.
· Note the grievances from the HCDTs on the implementation of the HCDT in the PIA,
· Urge the Ministry of Petroleum Resources to formulate, develop policies to govern and monitor the activities of the HCDTs and all relevant stakeholders including the Host Communities should be involved in the policy development process to address the problem now and in the future. |
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| 2. | Group 2: Issues on Mandates and institutional strengthening within PIA | · Reduce ambiguities in the provisions of the Act and over legislating on a few areas such as the role of the Commission and Authority in the regulation of terminal operations and crude oil and gas evacuation and 2% increment on royalty by price.
· Review the administrative challenges relating to the conclusion of the transfer of toxic assets and liabilities of NNPC to the Minister of Finance and Minister of Petroleum Resource for liquidation. · Implement appropriate funding of the governance institutions to enhance smooth implementation and service delivery of the objectives of the Act. · Adequate attention should be given to slippage in the completion of backbone gas infrastructure has hindered the full implementation of the DGDO provisions. · To approve the process for the review and amendment of the Petroleum Industry Act (PIA) 2021 to create a proper funding clause for the Ministry of Petroleum Resources (The Policy institution) like the regulators and commercial entities to balance the tripod on which PIA stands; · Approve in the meantime, the creation of a special funding from the annual appropriation to cater adequately for the effective functionality of the Ministry of Petroleum Resources to enable it discharge the huge responsibilities and special policy mandate placed on it by the PIA pending the review stated in para. (v) Above. · That the strategic nature of petroleum to the Nigerian nation demands that policy formulation and implementation in the sector is not only accorded the highest priority but is conducted in an effective and professional manner through provision of special funding devoted to the Ministry to cater for its staff as well as meet its obligations.
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· Consider and recommend an amendment of the Act as it affects the role of the Commission and Authority in the regulation of terminal operations and crude Oil & Gas evacuation and 2% increment on royalty by price even though the issues has been temporally resolved by the Presidential directives.
· Urge Ministry of Petroleum Incorporated (MOPI) and Ministry of Finance Incorporated (MOFI) in collaboration with NNPCL to conclude the processes of determining and disposing the toxic assets.
· Consider and recommend an amendment of the Act to ensure that the policy institution-MPR and its regulators (NUPRC, NMDPRA, NNRA & PTI) are adequately funded to effectively discharge the assigned responsibilities to them under the Act.
· Approve in the meantime that adequate funding of the Ministry of Petroleum Resources should come from the annual budget as well as from external sources pending the amendment of the law to meet its obligations of supervision and policy formulation and implementation.
· Approve that the continuous implementation of the PIA should be domiciled in the Ministry of Petroleum Resources and to be funded appropriately to address all observed implementation gaps.
· Urge the Federal Government to transfer the assets and liabilities of the defunct PIA Implementation Committee to the Ministry.
· Urge the Ministry of Petroleum Resources to lead in ensuring adequate collaboration and cooperation between the Ministry, the regulatory bodies and other institutions that have significant roles to play in achieving the objectives of the PIA.
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| 3. | GROUP 3: Harmonization/ Intuitional Support for the Ministry’s Flagship Program, Nigeria International Energy Summit (NIES) & National Conference on Hydrogen (NCoH) | · Council should consider and approve a policy for the development of digital regulatory tools in the oil and gas sector.
· To promote transparency and duplication of projects there is need to carry out needs assessment of the host communities. · Council should consider and approve the inclusion of stakeholder’s full participation and sponsorship in NIES and NCoH. |
· Urge the Ministry of Petroleum Resources to develop policy for the development and implementation of digital regulatory tools in the oil and gas sector.
· Urges the regulatory agencies (NUPRC & NMDPRA) to ensure that host community needs assessments are carried out before HCDTs project implementation.
· Note that the first National Conference on Hydrogen (NCoH) and the 7th Nigeria International Energy Summit (NIES) were held successfully in Abuja in 2024
· Urge the stakeholders including International and National Oil Companies to participate and sponsor the 8th NIES & 2nd NCoH as a demonstration of their commitment to the development of oil and gas sector and the Nigerian economy at large.
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| 4. | GROUP 4: Gaps in the Implementation of the PIA | · Review and amend the PIA to include and capture the roles of State and LGAs in the PIA.
· The host community development trust fund should participate in the budget approval process of the settlor and NMDPRA/NUPRC. · Involve States and LGAs in the PIA implementation. · Review conflicts of functions between some laws and the Settlors (Sections 242(a)-(c). 23 24: · The Settlor is given the powers to appoint a secretary to the Board without specific mention who cannot be appointed. Hence, Settlors have resorted to appointing their staff who cannot act against their interests. · Review conflicts in the management of development funds for the Host Community by the BOT and Management Committee, there should be a transparent process to determine the fund distribution matrix and declaration of the OPEX 3% of the IOCs which should form part of the transparent fund matrix for the HCDTS, with the audited companies” account. · Strategic research and development institutions such as the Federal University of Petroleum Resources, Effurun (FUPRE); Petroleum Training Institute (PTI); Institute for Petroleum Studies (IPS), University of Port Harcourt; Ahmadu Bello University (ABU), Zaria, amongst other stakeholders should be encouraged to develop appropriate technologies for marginal field operations and associated refining capacity. · PTI should be involved in field development plan (FDP) programs as enshrined in section 79, sub-section 21(ki) of PIA in alignment with the PTI Act to enhance local recruitment and training plans for the oil and gas sector of Nigeria. · PTI should be funded from the oil and gas production i.e. 0.25 cent per barrel produced as the foremost oil and gas training institution in the sub-Sahara African, most especially in this era of divestment of international oil company onshore portfolios to the indigenes of oil and gas industry. · PTI should be empowered to contribute critical research insight that can improve regulatory capacity of NUPRC and NMDPRA. · The PIA should be amended to remove the suspension placed on the weights and measures department of Federal Ministry of Industry, Trade and Investment to remove any encumbrance in the implementation of the Weight and Measure Act. Particularly section 7(2) and section 16(3) of the pre-shipment inspection of Exports Act. |
· Urge the Universities and other relevant institutions to collaborate with NCDMB in local content/capacity development so as to enable them to participate in bidding and win oil blocks.
· Urge for further engagements and consultations between Ministry of Petroleum Resources, Weight and Measures Department of the Federal Industry, Trade and Industry and other relevant MDAs to address observed gaps in the implementation of the PIA.
· Urge MPR to review and implement the committee report on repositioning of the Petroleum Training Institute (PTI)
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| 5. | Group 5: Inclusion of Sub-National Governments in the PIA implementation | · State & Local Government of oil and gas producing states be recognised as members of the HCDT by PIA.
· The recognition and inclusion of state Ministries vested with oil and gas portfolio in joint investigation visit (JIVs) when oil spills and related incidents occur. · Women should be included in the management of the host community development trust. · There should be a quick development of infrastructures around the Kolmani oil field for ease of accessibility. |
· Consider and recommend the review and amendment of the PIA to include the roles of oil producing and host States and LGAs.
· Urge the minister of petroleum resources to include state ministries vested with oil and gas portfolio and HCDT in joint investigation visit (JIVs) when oil spills and related incidents occur.
· Urge the Ministry of Petroleum Resources to develop a policy to address the inclusion of women in the Management of HCDT.
· Urge the Ministry to develop a policy to guide in the implementation of the frontier exploration fund. |
