20/01/2022

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Southern Governors reject 30% profit share for oil exploration in Northern Nigeria

2 min read

Southern governors, on Monday, rejected the proposed allocation of at least 30 per cent of the profit generated by the proposed Nigerian National Petroleum Company Limited for the exploration of oil in ‘frontier basins’ as identified by Section 9 of the recently passed Petroleum Industry Bill which will regulate the oil sector if signed by President Muhammadu Buhari.

Although the proposed law doesn’t identify the frontier basins, a statement by the President in 2019 identified the frontier basins as Chad Basin, Gongola Basin, Sokoto Basin, Dahomey Basin, Bida Basin and Benue Trough.

Currently, crude oil is obtained from eight states in the Niger Delta region which include: Abia, Akwa Ibom, Bayelsa, Delta, Edo, Imo, Ondo and Rivers States.

In a communiqué issued on Monday at the end of their meeting in Alausa, Ikeja, Lagos State, the governors commended “the National Assembly for the progress made in the passage of the PIB”.

It partly read, “The Forum rejects the proposed 3% and supports the 5% share of the oil revenue to the host community as recommended by the House of Representatives;

“The forum also rejects the proposed 30% share of profit for the exploration of oil and gas in the basins.

“The forum rejects the ownership structure of the proposed Nigeria National Petroleum Company Limited. The Forum disagrees that the company be vested in the Federal Ministry of Finance but should be held in trust by Nigeria Sovereign Investment Authority since all tiers of Government have stakes in that vehicle.”

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