DELTA NORTH: UTILIZING THE 3% PIA REMITTANCE TO BUILD A BETTER FUTURE, BY SENATOR NED NWOKO

The Delta North Senatorial District has yet to feel the impact of the International Oil Companies (IOCs) and Local Oil Companies (LOCs) operating within its region, despite the implementation of the Petroleum Industry Act (PIA) since 2021. The 3% development fund allocated to host communities under the PIA has not translated into meaningful progress for the oil-producing communities in Delta North.

The enactment of the PIA was a landmark moment, aimed at addressing years of environmental degradation, neglect, and lack of Corporate Social Responsibility (CSR) in host communities. For Delta North, this law was supposed to usher in a new era of rapid infrastructural development and improved living conditions. Unfortunately, this promise remains largely unfulfilled.

The PIA, signed into law by President Muhammadu Buhari on August 16, 2021, created a legal framework for governance, regulation, and fiscal responsibility in the petroleum industry. It mandates that 3% of the annual operating expenditure of oil companies be remitted to the Consolidated Revenue Fund (CRF) for the development of host communities. According to the Executive Director of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Engr. Gbenga Komolafe, oil companies have consistently remitted these funds since 2021, amounting to hundreds of billions of naira.

Transparency and Accountability in Fund Management

The neglect and marginalization of Delta North’s oil-producing communities are glaring. Decades of environmental hazards, poor CSR implementation, and inadequate Environmental Impact Assessments (EIA) have left these communities struggling with poor healthcare, substandard infrastructure, and environmental degradation. Despite these challenges, there has been no significant development to show for the 3% PIA remittance intended to improve their living standards.

The NUPRC, alongside other regulatory bodies like the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), must ensure that the funds accrued under the PIA are transparently managed and utilized for the intended purpose. As custodians of this framework, they are obligated to ensure that host communities benefit directly from these resources.

Delta North’s Oil and Gas Assets

Delta North Senatorial District is home to several upstream and downstream oil companies, including:

• Nigerian Agip Oil Company (OML60) now Oando Energy Resources – Ndokwa East
• Platform Petroleum Limited (OML38) – Ukwuani
• Sterling Energy Exploration Production Company (OML143) – Ndokwa East
• Pan Ocean Oil Cooperation (OML147) – Ika North East
• Midwestern Oil Company (OML56) – Ndokwa West
• Pillar Oil Limited (OML56) – Ndokwa West
• Energia Limited (OML56) – Ndokwa West
• Chorus Energy Limited (OML56) – Ndokwa East
• Ashtavinayak Hydrocarbon Limited (downstream) – Ndokwa West
• Opac Refinery (downstream) – Ndokwa West
• PowerGas Ebedei Limited (downstream) – Ukwuani

The cumulative 3% remittance from these companies amounts to an estimated 30% of their operational costs annually. Over four years, this represents approximately 120% of their combined operating expenditures remitted into the CRF designated account supervised by NUPRC, totaling hundreds of billions of naira. These funds are more than sufficient to address critical projects like the Okpai Independent Power Plant (IPP) and the Ogwashi-Uku Dam, as well as to improve healthcare, education, road networks, and electricity in the region.

The lack of visible development from these funds raises serious concerns about transparency and accountability. As your senator, I am committed to ensuring that the NUPRC and other regulatory bodies expedite the disbursement of these funds and that they are judiciously utilized for the growth and development of our host communities.

To build trust and accountability, I will engage with the relevant Senate Committees and invite the management of these oil companies to provide detailed reports on their contributions and how the funds are being allocated. Furthermore, I will work closely with the inaugurated board members of our host communities to guarantee that these resources are used to address the specific needs of the people.

Delta North cannot continue to suffer neglect while billions of naira intended for its development remain stockpiled in the CRF. Together, we will ensure that these funds are put to work for the benefit of our communities, paving the way for a brighter and more prosperous future for all.

Senator Prince Ned Munir Nwoko
Senator, Delta North Senatorial District