NPDC's non-compliance with PIA hampering development in Delta host communities

EDITORIAL: FocalPoint on Niger Delta Development 

By Ezekiel Kagbala

The Nigerian Petroleum Development Company (NPDC) Ltd is a fully-owned subsidiary of the Nigerian National Petroleum Corporation (NNPC) that was expected to speedily implement the Petroleum Industry Act, 2021 (“PIA”).

Delta State, where NPDC has many assets has, for some time come under surveillance of the Focalpoint pursuant to the enactment of the Petroleum Industry Act, 2021 (PIA), almost two (2) years ago.

However, from the look of things across Delta host communities, it is disheartening that NPDC seems to be more cosmetic and theoretical with the implementation processes, thus further hampering development and impoverishing the people.

An instance comprise stakeholders in one of the asset, OML-42 who have been expecting deliberate efforts from NPDC to ensure the implementation of the PIA in a manner that would achieve developmental objectives in line with the yearnings and aspirations of those whose lives are meant to be impacted.

Ironically, NPDC seems to be setting a terrible example of slowness and docility where it is expected to be proactive.

Observers are of the firm belief that NPDC's inaction could reduce the regulator's boldness to confront the non implementation of the legislation by private investors who are ready but lack the backing and frontline leadership of the supposed government outfit.

Fact checks into the incessant protests by some host communities, specifically those at the OML 42 asset managed by NPDC Neconde JV in Warri South-West Local Government Area of Delta State have revealed that the stakeholders have always been calling on the oil companies to implement aspects of the Petroleum Industry Act (PIA) in the host communities, to no avail.

It was further gathered that the private partners tried to initiated a process that was obliterated bit it failed.

Also, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) recently threatened to revoke licenses of oil and gas operators over failure to remit the statutory three per cent to host communities in the Niger Delta region by the end of September, 2023.

Yet, as things look like, there is no form of preparedness to consider the implementation.

Currently, communities are decrying oil companies non-compliance with the Petroleum Industry Act (PIA) 2021, which stipulates that oil firms must remit three per cent of their running cost to fund the development of the oil-bearing host communities.

Unfortunately, it seems as if NPDC  has became cold to the point that all assets under the Company are performing poorly and deficiently, even when the partners initiate the process for the PIA implementation.

First Hydrocarbon Nigeria (FHN), for instance, is a partner to NPDC in OML 26, with producing fields at Ogini, Isoko and Ozoro. There is no record of PIA implementation to date. 

Also, OML 34 is located in Ughelli producing fields with Utorogu, ND Western and they are partners to NPDC. No PIA implementation in the community. Similarly, at OML 40 located in Warri North, Elcrestis is the partner to NPDC. No PIA implementation. At OML 42, having a total of seven flow stations in Warri South-West, there has been no PIA implementation. And so many other instances without PIA implementation. It is quite unfortunate that there is no implementation of any aspect of the PIA on most of the assets being managed by NPDC as the operator in the entire Delta State!

Even though succour came to the host communities when PIA was signed into law and directives given for the implementation outline, it was gathered from an anonymous source that NPDC opposed to the process which Neconde Energy proposed for the PIA implementation in line with the act.

Neconde reportedly resorted to field by field PIA implementation process agreed upon by the host communities. But they eventually failed due to NPDC alleged unwillingness to support the process claiming that they are the operators when Jones Creek, Batan, Egwa, Odidi Fields. nominated their various memberships into the committees such as the Board of Trustees (BOT) Management Committees and Advisory committees.

With the situation as it is, Focalpoint is compelled to call on the Nigeria Upstream Petroleum Regulatory Commission (NUPRC) to prevail on NPDC not to frustrate the PIA and ensure that it works for the benefit of the host communities.

The Regulatory Commission should further prevail on NPDC to also ensure that the objectives of the Act are fully complied with.

NPDC should be made to know that those who are supposed to benefit under the PIA are taken care of and their entitlements fully implemented thus de-escalating tension, violence and gross injustice that the host communities have continued to suffer as a result of the extractive activities.

Editorial by Ezekiel Kagbala-------Feedback: 08038905146