Behold! Bauchi As An Oil Producing State?

By Tahir Ibrahim Tahir

The rains weren’t going to come this year and I was quite petrified, seeing that the sector with the largest contribution to our GDP has been the non oil sector; with agric leading the fray. The clouds would gather and the thunderstorms would rage on, but then they would just disappear and clear away. In my home state, the Emir had to call for special prayer sessions, so that the rains could come, and come to stay. The Almighty answered our prayers and the rains came.

They also came with flooding too! — but we prayed hard for the rain to come, so we dare not complain. We thank God for the rains. The rains came with other blessings too, like the passage of the Petroleum Industry Bill, which has been on a back and forth, between the executive and the legislature. PMB finally signed the bill into law, which seeks to overhaul every aspect of the country’s oil and gas production. The bill is essentially tailored to encourage capital inflow for fossil fuel development in the country. There is also a whopping 3% of operating cost of oil companies, to go to the host communities.

This has been misunderstood greatly as 3% of profit, as against the 3% of operating cost which is quite huge. This is aside the 13% derivation which the governors of oil producing states have been joyful with. It is to be managed by a host communities board with proper representation from the host communities.

Now back to my prayerful Bauchi. Just after the passage of the PIB by the House of Representatives, the honorable member representing Bauchi, Hon. Yakubu Abdullahi, stood up and raised a motion for the Federal Government to declare and classify Bauchi as an oil and gas producing state. There was a bit of drama in the house at the time and the speaker had to take his time to give it to the ays or the nays. Eventually he gavelled and declared that the ays have it. There has been a lot of oil exploration in Bauchi state, and PMB had instructed the NNPC to extend its exploration to six other basins in the country.

Sections 68, 238, 239 and 240 of the new PIB law 2021, describes the benefits that the host communities stand to gain. Aware that any community from whose location oil is produced is entitled to a number of extra revenue, which is also in terms of special attention for the sake of its environment, infrastructure and health impact; Hon. Yakubu Abdullahi drew the attention of the house to the fact that exploration has been going on in Bauchi for many decades, especially lately; from 2018 to date. It is the statutory function of the parliament to enact law in any sector of the economy and take measures in order to create an environment for certainty, confidence and assurance for equitable treatment of the people.

The House has therefore resolved to: (I) Mandate the committee on Petroleum resources (upstream), to invite the NNPC to give comprehensive representation on the level of work in the oil exploration, currently undertaken in Alkaleri local government area of Bauchi state; and the successes recorded so far. (II) Mandate the committee on Legislative Compliance to ensure implementation.

The new PIB law is bringing a lot of attention to the host communities that produce oil for the commonwealth of the country. 3% operating cost of host communities from oil communities is in the region of 500 million dollars annually for the host communities.

So Bauchi stands to be included in the 13% derivation fund, and the 3% host communities operating cost. Bauchi also stands to be included in the NDDC which is mainly an oil producing states’ commission, that also gets a chunk of government revenue for the development of host communities. Bauchi is in the X list of impoverished states in the country, with a low standard of living as defined by a very low average real gross domestic product per capita. Bauchi’s IGR is quite poor too and cannot sustain itself without the monthly FAAC allocations. Farming is the mainstay of your ordinary Bauchi man, aside the 130,000 or so civil servants who live off government payroll.

Hon. Yakubu Abdullahi’s intervention was quite timely, because the new PIB law will bring into effect, many changes in the structure and operations of the oil giant NNPC. The PIB will also restructure how revenues from oil would be channeled and classified; detailing new spending and allocation. Even before the 2018 explorations, gas had been found in Bauchi, in great commercial quantity. The oil aspect is what the house of representatives would be inviting the NNPC to come forward with its details. If Bauchi is certified oil producing state, then of course it would be difficult for it to be left out as one. But someone has to kick start the process of Bauchi’s inclusion, and Hon. Abdullahi just did. The rest is left to the NNPC and the house committee on petroleum (upstream). Who knows, maybe our Bauchi Emir’s prayers for rain, came answered with ‘oil rain’, as revenue for Bauchi state as a host community and oil producing state.

–Tahir is Talban Bauchi