Chairman, Senate Committee on Public Accounts, Senator Matthew Urhoghide has cleared the misconception about the 30 Frontier Basin Fund in the Petroleum Industry Act, PIA in reaction to concerns raised by conspiracy theorists against the piece of legislation.
Recall that President Muhammadu Buhari in August 2021, assented to the Petroleum Industry Bill, which was passed by the 9th National Assembly.
He said, the 30 percent profit from Frontier Basin Fund, is not meant for the Northern Nigeria alone as it was peddled around.
Urhoghide, the Senator representing Edo South Senatorial district disclosed this during a chat at Correspondents’ Chapel Forum of Edo State Council of the Nigeria Union of Journalists.
“First, the misconception that it will be used in the north is not correct. So, there are new areas in where frontier basins have been existing that were not being explored for oil before now; those are what we call the new acreages that are opening within existing frontier basins and that is what the money will be used for. Again, that money is an investment and not a commitment; it is a business venture NNPC Ltd.
“NNPC Ltd is just one business entity owned by the government but it is fully commercialized and that is why we are saying who do we vest NNPC Ltd on, is it the federal ministry of finance, people have come up with or proposed that is should be vested in the Nigeria Sovereign Investment Authority (NSIA) because the NSIA is doing a lot of infrastructural development. NSIA is taking money from outside Nigerian shores.
“They are pockets of places scattered around the country where there are prospective oil. These frontier basins are not limited to chad basins, we have over six basins including Anambra basin, there is one in Kwara and Gombe States.
“For instance, Anambra basin is in Anambra and we have been hearing of crude oil in Anambra State, also there are crude oil deposits in Ebony state. So, these states put together is called Anambra basin.
“If you remember the first Eurobond that was floated by the Nigerian government that is the first external borrowing of N1bn that was supposed to be used for gas to power project, NNPC was supposed to spearhead it but somehow when the money was borrowed, NNPC was supposed to get $600m, which they didn’t get because they were not able to meet some conditions when Okonjo-Iweala was the minister of finance at that time. So, NNPC fell short and they had to source the money. We had borrowed the money to service the loan. Some of that money was given to NSIA, specifically $350million was given to NSIA. So, NSIA was now paying interest on that money.
“What it translates or what it projects to is that NNPC Ltd is committing 30 percent of profits oil will amount to about $320m a year. And if we are going to invest it, what do we mean by frontier basins.
“I watched on TV some of the mistakes regarding these terms and people are saying the National Assembly gave 30 percent to frontier basins and 3 percent to host Communities.
“It only means there is no clear understanding among the public; 30 percent of profit of oil that was accrued from the Nigeria National Petroleum Corporation, NNPC Ltd because they will be the commercial entity that will be set up.
“NNPC will also be involved in business with other International and national oil companies and any other one that is doing a Joint Venture with any subsidiary that probably would be set up by the government.
The House of Representatives passed 5 percent but because we were briefed by the GMD NNPC and the minister of State petroleum, we were more on the issue. It was not that the northern senators doesn’t want to be sympathetic with us from the Niger Delta, but we all wanted to consider it from the business angle.
“When we get the investors, there can be amendment to the law; it can be a clause and then they would have invested and know that the investments they have done are not fair to our people, and it is for them to provide the ambience in which they are doing their activities. Niger Deltan senators wasn’t just sitting down there. There is a place in Gombe that has oil and will soon start exploration. We decided to be dispassionate and allow the investors come before we can amend the law”, Urhoghide stressed.