Reps Threaten to Revoke IOCs Licenses Over 3% OPEX Non-Remittance

October 18, 2023
Nigerian crude oil

By Adedapo Adesanya

The House of Representatives has threatened to institute the revocation of the licenses of some International Oil Companies (IOCs) over the non-remittance of the mandatory 3 per cent annual Operational Expenditure (OPEX) to oil and gas-producing host communities.

A lawmaker, Mr Victor Obuzor, in a motion, said that the defaulters were breaching Section 240 of the Petroleum Industry Act (PIA), which stipulates that oil and gas companies should remit the 3 per cent share of their annual operational expenditure to their host communities via the Host Community Development Trust Fund.

He lamented that since the PIA came into effect in 2021, the companies have deliberately refused to make the necessary remittance as mandated by the act, adding that this has sparked agitation within the host communities as they feel shortchanged.

He warned that this went against the main objective of the relationship between the IOCs and their host, which is to foster sustainable prosperity, provide direct social and economic benefits, and enhance harmonious co-existence.

He said the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), which is mandated to facilitate speedy implementation of the 3 per cent OPEX, has awarded a penalty of $1.825 billion to the defaulting oil companies, to be paid at the rate of N52,500 per day as stipulated by the PIA.

On his part, Mr Sada Soli, in contributing to the debate, wondered why after the passage of the Petroleum Industry Act (PIA), IOCs still seek to flaunt the provision of the PIA and called on the National Assembly to ensure the relevant agency that should enforce this provision does its job.

The House urged the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to revoke the licenses of defaulting IOCs for violation of extant Laws and protocols of the United Nations Framework Convention on Climate Change (UNFCCC) Clean Development Mechanism (CDM) Green House Gas (GHG).

The lower chamber also mandated the Committees on Host Communities Petroleum Resources (Downstream) and Petroleum Resources (Midstream) to investigate the non-remittance of 3 per cent of their annual OPEX to the Host Community Development Trust Fund within six weeks for further legislative action.

The Speaker of the House, Mr Abbas Tajudeen, urged relevant committees of the House to ensure they sanction erring agencies and use the stick instead of the carrot at times.

Adedapo Adesanya

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

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