Petroleum Industry Bill (PIB) update
The newly drafted Petroleum Industry Bill (PIB),reportedly provides for the establishment of Petroleum Host Communities Fund (PHCF) to be utilised for the development of the economic and social infrastructure of the communities.
The latest draft PIB, if passed into law, shall mandate each upstream petroleum company to remit on a monthly basis 10 per cent of the net profit derived from petroleum operations in onshore areas and in the offshore shallow water areas directly into the PHCF
It was however provided that where an act of vandalism, sabotage or other civil unrest occurs that causes damage to the upstream facilities allocated to a community, such community shall forfeit its entitlement to the portion of the PHCF for repair and remediation of the damage.
The bill also provides that profit derived from petroleum operations in deepwater areas shall be remitted directly in equal shares to each state governments of the eight littoral states of the Federation.
Each upstream petroleum company, under the yet –to-be passed bill will be required to at the end of the fiscal year, shall reconcile its remittance as provided, with its actual filed tax return to the service and settle any such difference.
It was further provided that contributions made by each upstream petroleum company will constitute an immediate credit to its total fiscal rent obligations as defined in the Act.