PIB: Untidy passage ll not benefit indigenous players

PIB: Untidy  passage 'll not benefit indigenous players

Legal Oil and Gas expert has warned that untidy passage of PIB  under the current fiscal terms will not be beneficial to Indigenous players ,stressing that it Will prevent development of small stranded fields and Stunt the availability of domestic gas particularly for power generation.

Ms Aderemi Ogunbanjo  of Odujinrin  and Adefulu   gave this warning while speaking on the petroleum industry bill and its impact on indigenous producers at the Energy Institute Producers forum in Lagos.

According to her commitment to a clear timetable with milestones is critical for the development of the industry  and it is better we get it right now than being in a hurry.

She noted that the PIB was made to create a conducive business environment for petroleum operations, optimise domestic gas supply and to establish a progressive fiscal framework that encourages further investment in the petroleum industry while optimising revenues accruing to the Government

Other objectives are to create efficient and effective regulatory agencies; and  to promote transparency and openness in the administration of Nigeria’s petroleum resources .

She maintained that the objectives setting up the PIB must be religiously kept to ensure  we get it right.

This is coming after  the opposing interests inherent  have failed to come to a common ground, and that explains why the ambitious bill, which holds the key to the transformation of the oil and gas industry, and indeed, the Nigerian economy has not seen the light of the day.

Actually ,The Petroleum Industry Bill (PIB) rests delicately on three contending legs: the Federal Government, through the Ministry of Petroleum Resources; the National Assembly and the international oil companies operating in Nigeria. This is a tribod stand on which the PIB is standing.
In fact, the Seventh National Assembly will be heading for a record if it succeeds in passing the bill, which had eluded its predecessors.

Senate President, David Mark, it was, who last month, rekindled the hope of early passage of the PIB when he put the time tag of "very soon".
However, it is yet to be seen how the contending issues in the tripod could be resolved very soon.
Some Northern elements and other interest groups have picked holes in the PIB in its present form.
Governors Dr. Mu'azu Babangida Aliyu and Alhaji Ramalan Yero of Niger State and Kaduna State, respectively, have taken a swipe on the PIB on its provision of 10 per cent host community fund.
Aliyu contends that allocating a fund to host communities was synonymous with creating a fourth tier of government.
He argues that the bill failed to state what actually constitutes a host community or how funds would be conveyed to such communities, adding that with the existence of Niger Delta Development Commission, NDDC, and the 13 per cent derivation, creating host community fund is an attempt to extend such opportunities through the National Assembly. To Yero, he says his people are opposed to the provision.
However, NEITI, the Nigeria Extractive Industry Transparency International (NEITI), is of the opinion that if indeed regulation and administration of the oil industry must be guaranteed, it is imperative to reduce the powers of the Minister of Petroleum Resources and ensure the creation of strong autonomous institutions that would promote effective governance and control in the management of Nigeria's petroleum resources.
Perhaps, the hardest knock comes from the international oil companies (IOCs) under the aegis of Oil Producers Trade Section (OPTS), which is a conglomerate of 18 international, and indigenous oil companies.
To them, although the PIB possesses a unique opportunity to resolve the numerous challenges confronting the oil sector, it only sets out to aggravate it and simultaneously reduce investment potential in the oil sector.
They cited issues of illegal bunkering and sabotage, constant security threats to oil sites and employees, shortfalls in Joint Venture funding, lengthy delays in project among others, which they claim the bill has not addressed.
Resolving these diverse interests, which would bring about speedy passage of the PIB means, all the affected parties should come to the round table.
Although, the Senate says, Nigeria is simply adopting what is obtainable in other countries with similar circumstances, the legislators may need to bend backward to allay the fears of the oil firms.
The oil producing communities may want to exploit the loophole in the constitution which stipulates a minimum of 13 per cent derivation, to press for an increase which is more feasible to achieve, than the request for additional 10 per cent to the host community fund.
On their part, the IOCs should appreciate the efforts the Federal Government has been making in confronting, in recent times, the scourge of illegal bunkering, sabotage, pipeline vandalism and security threats.
There is the need to whittle down the powers of the Petroleum Minister, to accord with their counterparts in other climes, so as to accommodate the views of those who see the present arrangement as inconsistent with the aspiration of developing a healthy and vibrant oil and gas sector in the country.

It could be recalled that The reforms started in April 2000 with the establishment of the Oil and Gas Sector Reform Implementation Committee (OGIC) and the OGIC’s mandate was to harmonise the 16 oil and gas legislations, and produce a comprehensive industry legislation

After various drafts down the line, OGIC presented the PIB to the National Assembly in December 2008 ,The Bill survived two administrations (President Olusegun Obasanjo’s administration and President Umar Yar Adua’s administration) and various redrafts

In January 2012, under President Goodluck Jonathan’s administration, a Special PIB Task Force was set up and another version of the PIB was presented to the National Assembly on 16 July 2012