House Of Representatives has emphasised the need for the International Oil Companies (IOCs) Involved In the divestment of assets In the Niger Delta Region to comply with the decommissioning and abandonment regulations and guidelines of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) as enshrined In the Petroleum Industry Act (PIA).
Chairman, Committee on Petroleum Resources (Upstream), Hon. Alhassan Ado-Doguwa gave the charge in Abuja during interactive session held on Thursday at the instance of the joint Committees On Petroleum Resources (Upstream), Host Communities Development and Gas.
While addressing the experts from stakeholder democracy network (SDN) on divestments and Host Community Development Trust (HCDT) processes in the oil and gas sector, Hon. Ado-Doguwa, noted that compliance is crucial for mitigating environmental impacts and ensuring that host communities are not left to bear the brunt of abundant oil infrastructure.
He said: “The insights we gain will help us in crafting more robust legislative actions that promote responsible divestment practices, ensuring that the interests of host communities are protected and that the environment is preserved.
“Our goal is to foster a more harmonious relationship between oil companies and host communities, reducing complex and promoting sustainable development, encourage all members to actively engage in today’s discussions.”
While speaking during the engagement with the lawmakers, SDN’s senior project officer on Environment, Mr. Jude Samuelson observed that divestment has been an issue in recent times due to the progressive departure of oil and gas companies.
“So, divestment actually means the selling off of assets, investments, or sticks. The sale can be partial or 100% divestment is not a crime, it is a normal transaction. It is not a crime. But the issue is that the way it is happening in the Niger Delta has raised concerns because of the associated liabilities.
“That’s why stakeholders are concerned about the future of the people living in the communities where there are oil and gas activities, and also the precedent that will be left for other oil companies that are yet to divest and that’s why divestment has to be taken very seriously. Especially now that the leading IOCs are divesting the assets,” he said.
He emphasized that the legislators need to provide more oversight to how the process is being conducted.
Responding to questions from Committee, Ifeoma Ndekwu, Deputy Program Manager, SDN spoke on how oil spills can be harnessed for the benefit of the host communities.
“We’ve not explored such opportunities on trying to harness oil spilled, you know for economic benefits. Still, I believe that this is where the HCDT comes in, especially if you’re looking towards improving the growth or the development trajectory of host communities”.
“And that is why we are saying that for these first few years, where oil companies and host communities are trying to establish these developmental trusts, it is important that they utilize it for the benefit of the development of host communities. As what we see now where a lot of projects are just centered around infrastructural developments.
“A good way to support the diversification of the region and the host communities is for them to begin to look at areas you know, beyond physical infrastructure, and begin to look at the opportunities that are in these host communities.
“I mean, the gas commercialization plan is perhaps even one way where access to energy can be provided to host communities. It is always amazing when you get to an oil-producing community that has no power. They have something that is called Community generators, where they have no hospitals where they have no energy where they have absolutely nothing. And then you see what they call fuel floating on the sea, where they’re able to buy fuel.
“I think the HCDT presents an opportunity to begin to address some of these underlying issues that have bedeviled the region and perhaps even host communities outside the Niger Delta region. so that for once we can say, you know that people are beginning to reap the benefits of natural resources that they own,” she noted.
On her part, SDN’s Country Director, Mrs. Florence Kayemba who spoke on oil spill harped on the need for compensation for the host communities to cushion the effects of the oil spill in the Niger Delta Region.
She said: “Talking about how oil spills can actually be harnessed for good. Perhaps this waste can be used to either provide fuel or something or the other that can be a benefit to the host communities.
“I like to say that we haven’t explored that as an organization however, we are a member of the Nigerian Circular Economy Working Group, which is actually convened by the Africa Development Bank.
“Members of those groups include some federal ministries departments and agencies, the World Bank, and a few other prominent stakeholders within the country. It’s an area that we would definitely visit and perhaps if we get some ideas, we can share that with you.
“A honourable member talked about backward integration, why are companies being involved in that sort of thing? It’s something we’ve always advocated for it’s an organization particularly harnessing gas. Gas flaring has been a prominent problem in all exploration within the Niger Delta.
“We’re aware that the Minister of Petroleum Resources has resuscitated the gas commercialization program which is something that SDN will sort of get involved in in terms of providing independent monitoring, the results of which eventually we can share when we have a bit more information, we can share that with you.
“And then also in terms of oil spill compensation as an organisation we did attempt to work with legislators to try to amend the land use act to actually make proposals for how compensation should be paid. And we’re basically focused on the polluter pays principle.
“Glad that these are discussions that perhaps we can begin to revive. We can also update some of the frameworks we were actually proposing for adequate oil spill compensation.”
In his closing remarks, the deputy chairman, Petroleum Resources (upstream) Hon. Whingan Sesi who commended SDN for investing a lot of commitment in making sure that we have a safe environment and a safer country to live in.
Among the key issues highlighted during the interactive session was the legacy of environmental pollution caused by the oil companies, and there is no framework as to who will conduct this clean-up of the region.
One of the recommendations was to create a divestment bill that clearly states the principle for responsible divestment. Within this framework is a process that scrutinizes the financial and technical capacity of the new buyers of these assets.
