Uche Amunike
Lifeandtimes News Writer
The Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, yesterday, stated that they protested against President Tinubu’s executive order on the direct remittance of oil and gas revenue to the Federation accounts because it would have been an immeasurable impact on the industry’s investments and the welfare of workers of the Nigerian National Petroleum Company Limited (NNPC).
According to the association, the executive order negates the spirit and intent of the Petroleum Industry Act (PIA), which is presently in operation, maintaining that it was capable of scaring away potential international investors.
Speaking, during the opening of the National Executive Council meeting of PENGASSAN, the President, Felix Osifo stated that even though the union supports initiatives that strengthen accountability and transparency in the oil and gas industry, it rejects the adoption of initiatives outside the law.
He also stated that in their bid to resolve the disagreements, they had a meeting with the Federal Government last weekend and that PENGASSAN was scheduled to meet the Presidential Committee on the matter today.
He clarified that the stand taken by the union was that the Federal Government should take the PIA back to the National Assembly for amendment, if it feels there’s a need for it, rather than go against its provision.
His words: ‘Our position is that the issue should be taken to the National Assembly. That is because when you go to the National Assembly, you allow other stakeholders to review the proposed laws, and also to make their position known during the public hearing. So that has been our position since this actually came out.’
President Tinubu’s Executive Order is anchored on Section 44(3) of the Constitution, which grants ownership, control and derivative rights in all minerals, mineral oils, and natural gas in, under, and upon any land in Nigeria. This includes its territorial waters and Exclusive Economic Zone in the government of the Federation.
The directive sets out to restore the constitutional revenue entitlements of the federal, state and local governments, which were removed in 2021 by the PIA.
Under the current PIA framework, NNPC Limited retains 30% of the federation’s oil revenues as a management fee on Profit Oil, and Profit Gas derived from Production Sharing Contracts, Profit Sharing Contracts (PSCs) and Risk Service Contracts, with the aim of eliminating unjustified multiple layers of deductions that erode revenues that should have been accrued to the federation accounts, enabling the tiers of government to pursue critical national priorities.
Osifo, however defended PENGASSAN’s stance against the executive order, stating that the policy failed to provide for the payment management fee to NNPC to cater for operational expenses.
Hear him: ‘Yes, we have said that it negates the PIA, but the government said they are relying on the constitutional provision.’
‘So we are coming from two divergent positions. But beyond the process, we have now moved into the substance and that substance is how will this impact on our members.’
‘Like I said earlier, before PIA, the revenue or the profit oil was paid to the federation account.’
‘For the federation account, we remit back a management fee. It is this management fee that is being used to cater for the salary that the allowance of our members.’
‘The management fee is sent back because there are individuals, there are comrades that are actually carrying out the management of these PSCs that are interfacing with Shell, interfacing with Total Energy, interfacing with Exxon Mobil and all the operators of the PSC. Reconciling accounts, assuring that Nigeria and Nigerians are not cheated.’
‘So these people, their salaries will have to be paid. So that is the conversation that we are having currently and we’ll further it on Wednesday.’
On the way forward, Osifo stated that the union intends to meet with the Federal Government and resolve their differences and from the meetings they have had so far, there are green lights, because their case was made clear, and they have no hidden agenda. He further said that from what they have seen so far, the people on the other side seemed reasonable.
