22nd October, 2013
In 2008, when the idea of initiating a bill that will correct perceived flaws in the petroleum industry and address structural, policy and managerial issues in the Nigerian oil and gas sector came up, it elicited much hope. The bill awakened the enthusiasm of stakeholders and raised the hope of a better future for the industry. However, five years on, the PIB is yet to fulfill the purpose for which it was intended while the slow approach to the passage of the bill has become worrisome.
The Nigerian petroleum industry, no doubt, is the cash cow for the Nigerian economy. Since the discovery of petroleum in the 1950s, the management of the resources and the industry have been marred by inefficiency and lack of transparency, hence the need to put in place a legal, fiscal and regulatory frame work for the industry and other related matters. The PIB was drafted to achieve this.
Both the government and stakeholders in the industry engaged in long standing consultations and concluded it was imperative to address issues relating to funding, environment, accountability, transparency and efficiency in the industry through the PIB. The proposed bill is expected to address fundamental issues affecting the proper use of Nigeria’s crude oil reserves and production, benefit and welfare of Nigerians, through increased participation of local communities in the process, improve investments in exploration and production within a competitive business environment.
The final draft of the bill, presented to the National Assembly in 2008 has since been generating hot debate and controversies at the Senate.
The twist to the PIB saga started with the emergence of several versions of the bill and the debate on whose interest the bill seeks to protect. Other controversies that have trailed the discussion on the bill include the proposed ultimate powers given to the president and the petroleum minister in the award and revocation of licences and the proposed 10 percent host community fund for oil-producing communities, which recently polarised the National Assembly into North versus South.
Some analysts believe that passage of the bill is being stalled by the personal and political interests of some forces in the legislature, the executive and some multinational companies. As a result, the public hearing of the PIB has suffered serious setback in the Senate from the last assembly till the present one.
As it becomes uncertain when the bill is going to be passed, the PIB nevertheless, has been greeted with a larger support. The gains are perceived to be more than the pains. As indicated by the oil and gas report of Business Monitor International, BMI, passage of the bill is a strong way to convince investors that the sector is prepared for change and growth.
Bearing in mind the need for the government to reposition the oil and gas industry and create a friendly environment and framework to attract investments, it becomes expedient for the National Assembly to speedily tackle all the grey areas and give an accelerated hearing of the bills in the overall interest of the growth of the sector irrespective of the vested interest of some individuals and corporate entities. Failure to pass the bill will forestall the reform of the Nigeria oil and gas sector.
On monthly basis, Nigeria is said to lose $1 billion to oil theft. Does this not connote that the industry is in danger? Considering the effect of this on the revenue accruing to the country, stakeholders in the petroleum sector — private entities and unions — need to compel the legislative and the executive arms of government, all government agencies and ministries concerned and the minister of petroleum to wake up to their statutory functions and ensure that the PIB is passed into law.