The bill can be divided into fiscal, administration, governance and institutions, and host communities components.
The funds are to be used for the exploration of some of the basins across the country. Some of the basins are the Benue Trough, Chad Basin and Sokoto Basin. Section 53 provides that the ownership of all shares in the incorporated NNPC shall be vested with the government, and the Ministries of Finance and Petroleum shall hold the shares on behalf of the government. The shares are not transferable.
As part of its responsibilities, NNPC Limited will manage all petroleum sharing contracts on behalf of the government, lift and sell royalty and tax oil on behalf of the commission and will be vested with the right to natural gas under the production sharing contracts entered into, prior to the commencement of the bill.This section has been the most contentious part of the bill.
“The 2.5 per cent as proposed in the PIB is fair and of course, I speak as a member of a host community. But if you have to look at it properly, you will see that 10 per cent of profit is different from 10 per cent of operating expenditure. Clause 242 gives the licence holder the powers to determine the procedure of meeting, discipline, qualification remuneration, suspension and removal of members of the board of trustees. Furthermore, board members may not necessarily be from the host community.
Clause 256 exempts the Host Communities Development Trust from tax. Also, Clause 257 provides that in the event of vandalism, the host community trust will forfeit its entitlement to the extent of the repairs of the damages to oil asset within their domain. Perhaps as a way of compromise, the House committee heavily amended this part of the bill as against what the Executive proposed. Several sections were deleted by the lawmakers.
For the 42.5 per cent tax for onshore area mining lease and licence, the committee reduced it to 30 per cent, while 15 per cent was adopted for a prospecting mining lease in shallow water.
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