NewStats: 3,264,382 , 8,183,563 topics. Date: Tuesday, 10 June 2025 at 08:44 PM d6f5h

PIA: WHEN 3% IS GREATER THAN 30%

For a legislation that was about 20 years in the making, the Petroleum Industry Act still strikes many as injudicious at best. While in its long journey as the Petroleum Industry Bill and after it was signed into law by the President, Major-General Muhammadu Buhari (retd), the act has generated headlines that point to another front in Nigeria’s political fissure:

>>Problem may start in Niger Delta if Buhari signs PIB with 3% derivation – Tee Mac

>>New petroleum law, injustice to South-South—(Dan) Orbih

>>New definition of ‘host community’ in ed PIB, a day-break robbery –Rivers Rep, Dagogo

>>PIB: Oil-producing communities short-changed, raped with 3% share, says [Bismarck]Rewane

In an interview with The PUNCH in late July, Dr Tee Mac OmatsholaIsele, the musician-turned-mining executive, put the brewing fissure in the context of Nigeria’s recent history and current distress.

“When the youth were called to the million march of Abacha to Abuja and they saw the level of development, which was funded from money from the Niger Delta oil, they decided to start the war in the Niger Delta, which lasted nearly 10 years and made Nigeria to lose billions of US dollars, which could have been used for developmental projects. They do not mind starting again,” OmatsholaIsele said while commenting on the then pending bill. “But Nigeria, being broke now, cannot afford the Boko Haram problem up North, the Fulani herdsmen palaver all over Nigeria and another war in the Niger Delta.”

As the excerpted headlines above indicate, the bases for the objections are varied. However, a particularly sore issue is that while host communities in the established oil industry will get three per cent, those in the “frontier basins” will get 30 per cent. It just happens that the established industry is in the South and “frontier basins” largely in the North.

To Mele Kyari, the Group Managing Director of the Nigerian National Petroleum Corporation, the seemingly absurd difference is a mathematical illusion.

“The percentages appear very outrageous but 30 per cent of what? Nobody has sat down to look at it,” he said on Tuesday on NTA’s ‘Good Morning Nigeria.’ “When you say profit (from) oil 30 per cent, it probably comes down to less than $400 million per annum. But when you come to the host communities, you have three per cent of our operating expense. We spent about $16 billion in fiscal 2020 in our operating expense across the industry. So when you take three per cent of that number it comes above $500 million far above the budget of NDDC.”

To drive home this point with less heft, let me narrate a recent conversation with a friend and erstwhile colleague. As a recent retiree, he has decided to write and market short fiction, and his target market is highbrow magazines such as the New Yorker. He asked me to be his pre-submission editor and wondered what I would charge.

I told him I couldn’t charge a friend of many years for a service I provide freely to other associates. But he insisted, arguing that he wanted to formalise and routinise the arrangement. So, I counter-offered that he share a percentage that we would agree on.

To which he broke into a loud and sustained laughter. “Bere, you can have 100 per cent,” he eventually said, still laughing. “100 per cent of nothing is nothing.”

You see, my friend wasn’t expecting to earn much from the endeavour. It was more for creative pastime and self-satisfaction. So, the percentage amount meant nothing.

That’s more or less Kyari’s point. Host communities in the established oil industry will get three per cent of a much larger amount than that of the “frontier” communities. That is, three per cent of the NNPC’s operating expense, as opposed to 30 per cent of profits. So, it’s a case where three per cent is actually higher than 30 percent. Well, maybe. It all depends. Let’s get back to my friend’s point about 100 per cent of nothing. It was based on his assumption that his stories might not get published at all (it’s a brutal market) and if published would earn him little. But then there is also the scenario of ultimate optimism: One of his short stories not only gets published but is turned into a movie that grosses tens of millions of dollars. In that scenario, even one per cent could make me a millionaire.

Same logic applies to Kyari’s math. It is based on conservative assumptions of the prospects of the oil explorations in the frontier communities. Yet, it is within reason to conjecture the alternative: that the explorations become so profitable that 30 per cent becomes an even greater bonanza that the figures suggest. In that case, opposition to the act would be vindicated.

The math aside, there is also the issue of attention to political sensitivities and restiveness. Why even legislate and sign into law a bill with stipulations that on the surface seem discriminatory and in reality could be? Why not broaden the stipulations so as to be region- and resource-neutral?

In any case, the discrepancy in percentage figures is but one issue. There is the question of the definition of host communities to include areas where pipelines run through. That would mean that the three per cent would be shared among many more communities beyond the locales of exploration and operations.

“It is very unfortunate. It is a day-break robbery that cannot stand,” said Farah Dagogo, a representative for Degema/Bonny constituency at the federal House of Representatives, in an interview with The PUNCH. “It is … an uncharitable act designed to heat up the polity because the host communities are not ignorant of this fact, and I am sure they may react.”

Certainly, compensation may be due to areas where pipelines run through, but at a much smaller rate and not if the said communities are supplied by the pipelines.

In the larger context, there is always the question of utilisation. It is one thing to get a larger share of the cake, it is another to use it to raise the people’s standard of living. "What is more important for the oil communities is the transparency of the money that is spent and the impact it has rather than having a tea party,” Bismarck Rewane, the Managing Director of Financial Derivatives Company Limited, has said on Channels Television.

The new law is expected to enhance Nigeria’s oil revenue by attracting foreign investors and subjecting the NNPC to corporate standards of operations, among other things. But the expected benefits will be counteracted if the law leads to renewed insurgency in the Niger Delta. And that can be prevented with a quick revision of the problematic.

Source:
https://punchng.com/pia-when-3-is-greater-than-30/

Ok

Na them know

Human needs are insatiable. No matter the formula you use in sharing resources, you cannot satisfy everybody.

Fraudulent bill to rob some citizens of their resources in order to bless others in the north ....a case of robbing Peter to pay Paul....all shades of wrong policy bourne out of nepotism been practiced by this buhari led istration malistration!
What is the need of expending huge budgets on exploration in a northern region that doesn't have history of crude oil mineral? Why wasn't this kind of exploration policy put to law for other regions when gold was found in a northern state? SMH.

Nbotee:
Imagine giving 30% of exploration costs to basin frontiers from money generated from host communities.. And who are those basin frontiers? Ur guess is as gud as mine

Very anyhow policy....fraudulent to say the least.

RealLordZeus:
To read is a problem to you guys




What they mean in simpler is
3% of 30,000 Is greater than 30% of 300
Where they are calculating the percentage also matters.

And coming from the punch, it sounds credible

Your own problem is lack of ability to comprehend!....next time read slowly to comprehend comments.
My comment isn't based on what is shared or not shared....be guided.

1000angstroms:
What concerns them with any percentage in the first place, didn't the oil explorers use their own money to explore for oil, so why using our oil money to go waste on a cursed barren land.

Trumann:


How much of Zamfara's gold is remitted to the federal coffers?

Johnrake69:
Robbery. Why waste so much money searching for oil when you haven't been able to add value to the oil readily available to us at the moment.

Apt comments from critical reasoning.

WE NEED YOUNG VISIONARY LEADERS IN NIGERIA!

@SENIORWRITER

Imagine giving 30% of exploration costs to basin frontiers from money generated from host communities.. And who are those basin frontiers? Ur guess is as gud as mine

Why not allow is applicable to the south be in the north? Why 3% here and 30% there are we not in the same country?

So I finally took my time to read and research fully on this pub bill to know what the controversies is all about.
Here's 2 thing causing controversy.

Frontier Exploration Fund: 30 per cent of NNPC Limited profit×
They are asking of 30% of the funds to NNPC limited profit which is about $15billion yearly to explore other basin where oil is being discovered. Chad, benue, Niger and zamfara basin.
If you ask me, I'll say it's too much.

Host communities to get 3% of NNPC profit for community develop
development
that's about $1.9 billion to be shared amongst communities annually..
That's small if you ask me.

Now the real controversies is that the presidency is proposing 30% Frontier Exploration while the national assembly us proposing 10%. Seems like the president won on this.

Also for host communities southern senators are proposing 5% while northern senators are proposing 3%.
Innitially the bill suggested a 2.5%.

COVID-19
HEARDSMENS
BOKO HARAM
BUBU

This are Nigeria problem.

The point is that the 3% is greater than the 30%

Blakjewelry:
Why not allow is applicable to the south be in the north? Why 3% here and 30% there are we not in the same country?

Crying over spilled milk....

- When it was being ed where were your reps, the other southern regions even revolted more than the SS?...
- The 30% exploration and 3% pipeline host favours various regions according to the discretion of presidents on oil exploration, so regional for the SS across board may be minimal honestly.

It's unfortunate that many critics don't criticize based on the factual reasoning but emotional gragra.

APC govt reasoning through their anus

Don't blame the North.... If all the Southern House of Rep had voted no, the bill wouldn't have ed.

Some decided to vote for it for whatever reason or reasons.... I heard they collected bribe to it, I don't know how true it is.

Nigerians react emotionally without reading and clarifying

b

Robbery. Why waste so much money searching for oil when you haven't been able to add value to the oil readily available to us at the moment.

The more you look the less you see

Just like send a child message with 5naira to buy something of 10naira then asked the child to bring 25naira change. With depleting oil revenue and low proceeds we are dragging how to share the profits.

If it's the North they would sign 40 to 50%....See I just Feel bad for those shortchanging the ND..

They'll just be churning out figures to confuse everyone and obfuscate clear issues.

If I may ask, who's sharing the proceed of sales of cows with the herders? Shouldn't they also pay the host communities including every communities they graze through?

Who's Zamfara sharing the proceed of her gold with?

Shebi they want the madness to kwantinu ni

Northgeria again?
Don't just disintegrate, pieces this country so that Nkerefi in Nkanu East, Enugu will be a country of its own

As a nigER delTA that I am, I prefer all these grammar to being with Igbos.
Make aboki fvck me all they want. I hate Igbos

To read is a problem to you guys

Seniorwriter:
Fraudulent bill to rob some citizens of their resources in order to bless others in the north ....a case of robbing Peter to pay Paul....all shades of wrong policy bourne out of nepotism been practiced by this

WE NEED YOUNG VISIONARY LEADERS IN NIGERIA!

@SENIORWRITER

Blakjewelry:
Why not allow is applicable to the south be in the north? Why 3% here and 30% there are we not in the same country?

What they mean in simpler is
3% of 30,000 Is greater than 30% of 300
Where they are calculating the percentage also matters.

And coming from the punch, it sounds credible

Majority of those against the PIA have not read a single section of the act. They should answer these questions first:


1. If the 30% of NNPC running cost is to be used at the frontier basins, how much is the NNPC running cost and what is 30% of it?



2. Host communities will get their 3% from the oil exploration companies running costs, how many Companies do we have their and what is 3% of their running cost.



3. Critics say the 30% was a ploy to develop the north:


a. Are all the frontier basins in the north?


b. Can searching for oil be described as "Development"? ( Potential development might be correct).



c. If oil is discovered in the north, will the proceeds not increase the funds accrued to the federation , to be shared by all states and FCT?

GardenOfGod:
The point is that the 3% is greater than the 30%

How much of Zamfara's gold is remitted to the federal coffers?

Why does the North need any kobo from oil?

Interesting read.

Check my profile for phone deals.

who is talking about Nigeria again


Nigeria is dead please let bury it as any other dead things


some people still have hope in Nigeria


amazing !

The North has NEVER been the problem of the South. Infact, Southern founding fathers begged the North into this useless 'independent' contraption, when the North insisted they were not ready for independence in the 50s. Instead of going their way, they literally begged the North!
Southerners are weak, greedy and stupid. Northerners know all they need to do is 'bribe' a few Southern politicians to get what they want. The Southern politicians know they only need to throw a few crumbs at a few Southern elders, youths and thugs to achieve the Northern agenda.
Sadly, this has been the fomula for Northern dominance in Nigeria. It will not end anytime soon, unless Southerners unite and face their real enemy... THE SOUTHERN GREEDY BETRAYERS!
HOW DO YOU EXPLAIN THE FACT THAT NIGER DELTAN LEGISLATORS AND EXECUTIVE SAT TO SEE THI ACT ED! No protest, lobbying, litigation, etc?!!! It is sad that the South is the South's problem!