Spaces for Change Report Highlights Challenges and Progress in Transitioning Oil Companies’ Agreements
Oil and gas industry stakeholders, including Spaces for Change (S4C), with support from the Ford Foundation, have urged the National Assembly to remove section 257 (2) from the Petroleum Industry Act (PIA). This call was made during the unveiling of a report by S4C, titled “Transitioning from GMOU to HCDT: Wins, Challenges, and Further Actions,” which outlines the hurdles, successes, and suggested actions regarding oil companies transitioning Global Memorandum of Understanding (GMOU) to Host Communities Development Trusts (HCDTs).
Key figures supporting the removal of section 257 (2) include Dumnamene Dekor, chairman of the House of Representatives committee on host communities, and Bubaraye Dakolo, the King of Ekpetiama Kingdom in Bayelsa.
Section 257 (2) has been a subject of controversy as it addresses conditions under which a host oil community may lose its three percent financial entitlements. It also places responsibility for damage, vandalism, or sabotage on the communities, requiring them to repair or replace damaged oil facilities and cover operating expenditures during production shutdowns.
Chairman Dumnamene Dekor pledged to collaborate with fellow lawmakers to repeal this part of the law. The event also marked the launch of the progress report on the host communities fund document.
Dumnamene emphasized the importance of addressing grey areas in the PIA, particularly the clause compelling communities to protect pipelines or risk losing their funds. He highlighted that the well-being of host communities is crucial to Nigeria’s collective goal of progress and prosperity, considering the significant role the oil and gas sector plays in government revenue and export earnings.
Dumnamene stressed the need to effectively deliver the benefits of resource exploitation to host communities, citing the historical failure to do so for nearly seven decades.
The report, presented by S4C’s executive director, Victoria Ibezim-Ohaeri, assessed the extent to which indigenous and international petroleum companies fulfilled their obligations in delivering development to oil-producing areas under the HCDT. The report highlighted challenges, wins, and practices emerging from the transition from GMOU to HCDT.
The stakeholders called for the repeal of Section 257(2) of the PIA, which they believe places the responsibility of securing oil and gas installations in the hands of unarmed host communities. They emphasized the failure of existing security entities in fulfilling this duty.
Bubaraye Dakolo added that the ‘criminalization’ of host communities in Section 257 of the PIA should be removed, and Hart Cyril, representing Bonny/Degema Federal Constituency, called for increased efficiency in enforcing regulations on host communities.