From Adanna Nnamani, Abuja
The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has thrown its weight behind the allocation of three per cent of the oil companies’ operating expenses (OPEX) to the trust fund created for host communities in the recently-passed Petroleum Industry Bill (PIB) currently awaiting presidential assent.
Speaking to reporters at the launch of “PENGASSAN Security Awareness Campaign” in Abuja at the weekend, the National President of the Association, Mr Festus Osifo, said that the three per cent operating expenditures for host communities was a good start regardless of the fact that the figure is mired in controversy. He added that host communities can seek for redress in the long run but should not allow the issue to be bogged down in disputes.
On deregulation, Osifo said the association has never been against the policy as long as it is not dependent on importation.
The association also condemned incessant attacks on its members, stating that it has decided to partner with the various law enforcement agencies to create awareness and find ways to strengthen the security system of the country.
‘When people speak about percentage, they forget to talk about the basics. The question to ask is: three per cent of what? For example, if it is three per cent of profit, it is different from three per cent of the Capital Cost (CAPEX) and different from Operational Cost (OPEX),’ Osifo said.
‘So, if it is three per cent of profit, it means that any year there is no profit, it means there will be no three per cent. But in this case, the National Assembly is talking about three per cent of operating expenditure.
‘That means the three per cent is relatively constant. To me, the National Assembly could have done better to a minimum of five per cent, but looking at where we are coming from, it was zero per cent before now, now it is at three per cent.
‘For us in PENGASSAN, three per cent of operating expenditure is a good place to start. Let the bill be signed to end the uncertainty that shrouded the petroleum industry.
‘The host communities can then seek an amendment. In my rough estimation obtained from the expenditure of the oil companies in the last one year, three per cent translates to about $45 million. The most important thing is how the fund will be administered?
‘How will the fund be applied in such a way that will serve the purpose it is meant for? Corruption must not be allowed to find its way into the administration of the fund so that the host communities will benefit maximally.’
Reacting to the calls by some individuals for the outright sale of the refineries instead of rehabilitating them as being undertaken by the Federal Government, Osifo said: ‘PENGASSAN has never advocated for the refineries to be sold. What we have always advocated for is that there should be a Public-Private partnership in such a way that the government will not be involved in the day-to-day running of the refineries.
‘Why is the Federal Government not exploring the possibility of adopting the LNG model where the government holds a minority 49 per cent while the private sector will take 51 per cent? That model has worked very well. PENGASSAN welcomes the rehabilitation of the refineries.
‘Our advocacy once the rehabilitation work is complete will be to call on the government to divest from the refineries and allow the private sector to run all of them. If we were to sell the refineries the way they are, they will be sold as scraps. If the government fixes the refineries and then divest, the money that the government will get will be reasonable.
‘That is why our position to support the rehabilitation of the refineries is justified. Nigeria will be ripe for full deregulation when the three refineries in the country are fully rehabilitated and are functioning under the private sector that is efficient. With the refineries coming on stream in the next few months and with the Dangote Refinery coming on board as well, Nigeria will soon be self-sufficient in refined petroleum products,’ he explained.