A proposed law to force indigenous and foreign oil companies to set aside a certain percentage of their training budgets to fund operations of the Petroleum Technology Development Fund (PTDF) is generating concerns among stakeholders in the industry.

PTDF is the government agency dedicated to manpower development through research and training in relevant oil and gas fields. Its major source of funding is from sums received by the federal government in respect of oil prospecting or mining leases.

But over the years, monies belonging to PTDF in reserve account domiciled with the Central Bank of Nigeria (CBN) have not been made available to the Fund as and when due.

The inconsistent release of these statutory allocations has led to the accumulation of huge and extensive liabilities for the agency. It was against this backdrop that the Chairman of the Senate Committee on Petroleum (Upstream), Senator Tayo Alasoadura, announced at a one-day oil summit in Abuja that as part of ways to make additional funding available to the PTDF, the legislature was considering passing a law that will require oil producing companies to contribute a certain percentage of their training budget to the PTDF.

Hinging the proposed bill on Section 1(C) of the PTDF Act 1964, Alasoadura said “what we have now is voluntary but we want to make it compulsory that such monies should be released to PTDF. We don’t want freely donated anymore; we want it compulsorily given.”

But his statement received strong dissent from local and international oil firms who criticized the proposed bill as another affliction on the companies who are already overburdened by excessive taxes in the oil sector.

An engineer and former presidential assistant on petroleum resources, Dr. Mohammed M. Ibrahim, cautioned the government to be very careful with such a bill in order not to discourage investment.

“Look at the Nigerian petroleum industry for instance, look at the number of institutions that govern the licensees: the ministry of petroleum, DPR, environment, transportation, PPPRA, PEF, PTDF, NOTAP, NCS, NIPC, NIMASA, NOSDRA, NCDMB, NDDC, NPA, every licensee has to deal and relate with all these agencies and even pay fees. So we need to be very careful,” he said.

He suggested rather that a law for a portion of Value Added Tax (VAT) collected from petroleum activities be channeled to the PTDF to build capacity and research. “If the activities derived from Withholding Tax is petroleum related, why don’t you access a portion of that to fund the PTDF?”