• Union meets FG today to resolve dispute
Onyebuchi Ezigbo in Abuja
The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) yesterday reiterated that the reason it was protesting against President Bola Tinubu’s Executive Order on the direct remittance of oil and gas revenue to the Federation accounts was that it would have an immeasurable impact on the industry’s investments and the welfare of workers of the Nigeria National Petroleum Company Limited (NNPC).
It said the Executive Order was a negation of the spirit and intent of the Petroleum Industry Act (PIA), which is currently in operation, arguing that it was capable of scaring away potential international investors.
Speaking at the opening of the National Executive Council meeting of the union in Abuja, PENGASSAN President, Festus Osifo, said while the union supports any initiative to deepen accountability and transparency in the oil and gas industry, it rejects the adoption of initiatives outside the law.
As part of efforts to resolve the disagreement, Osifo said there was an engagement with the federal government last weekend and that PENGASSAN was scheduled to meet the Presidential Committee on the matter today.
He said the position of the union was that the federal government should take the PIA back to the National Assembly for amendment if it feels there was a need for it, rather than go against its provision.
“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,” he said.
The president’s Executive Order is anchored on Section 44(3) of the Constitution, which vests ownership, control, and derivative rights in all minerals, mineral oils, and natural gas in, under, and upon any land in Nigeria, including its territorial waters and Exclusive Economic Zone, in the Government of the Federation.
The directive seeks 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 per cent 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.
The objective is to eliminate unjustified multiple layers of deductions that erode revenues that ought to accrue to the Federation Account, enabling the three tiers of government to pursue critical national priorities.
However, Osifo defended the union’s stance against the Executive Order, saying that the policy failed to provide for the payment management fee to NNPC to cater for operational expenses.
“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,” he said.
On the way forward, Osifo said the union intends to meet with the federal government to resolve the differences.
“We had engagement on Sunday. We had engagement yesterday. We are going to further the engagement on Wednesday by meeting the Presidential Implementation Committee of the elective order to raise our concerns.
“And from the engagements we’ve had, we think there are some green lights because our case was made clear. For us, there is no hidden agenda.
“For us, we don’t politicise issues. We purely look at how those issues are going to affect first our members, secondly the industry, and lastly Nigerians. So that is what we have been doing since we addressed the press on Thursday last week.
“So the engagement is going to be further tomorrow and we believe from what we’ve seen that the people on the other side, they are quite reasonable.
“From the engagement, it’s been fruitful so far and we think that we’ll be able to close the gap,” she said.
The PENGASSAN president used the opportunity to comment on the state of affairs in the country.
While acknowledging the gradual drop in cost of food prices in the country, Osifo said inflationary figures are still high, adding that the country’s exchange rate was yet witness appreciable drop.
Osifo also welcomed the federal government’s plan to divest from the refineries, but urged that the facilities be kept up and running while the divestment plans are pursued.
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