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Stakeholders in the nation’s oil and gas sector have given divergent positions on the three Petroleum Industry Bills.
The bills include the Petroleum Industry Fiscal Framework Bill (PIFB), Petroleum Industry Administration Bill (PIAB) and Petroleum Industry Host and Impacted Communities Bill.
At a public hearing on the bills, organised by the Joint Committee on PIB in Abuja on Monday, some stakeholders opposed discretionary powers of the President to award oil blocks and licenses.
While the PIAB seeks to transform the administration of the upstream, midstream and downstream sectors of the Nigerian petroleum industry, PIFB aims to enhance Nigeria’s competitiveness by making the country a choice destination for oil and gas investors, even as the Petroleum Host and Impacted Communities Bill provides a legal framework for the development of the petroleum host communities.
In his presentation, the Group Managing Director (GMD) Nigeria National Petroleum Corporation (NNPC), Maikanti Baru, said the state oil firm is in ‘full agreement’ with the bills as initiated by the National Assembly.
Represented by the Corporation’s Chief Operating Officer, Gas and Power, Saidu Mohammed, Baru said government is in support of bills that will ensure a win-win situation for all stakeholders.
“It has always been known that it is government desire to put in place a robust and desirable legislation that engender transparency, accountability and fairness in the regulatory, operational and administrative aspect of the entire oil and gas industry,” Baru stated.
While advocating for the ownership of the oil in the states, the NNPC GMD said: “Incentivising oil and gas operations in other to attract investment is very key to us. The growth of this industry depends on injection of large sums of amount of money to develop both exploration and exploitation of this vast resources.
“We are also advocating that the fiscal systems be simplified for ease of implementation.
“At the same time, we also want the bills to ensure that regulatory issues are taken out of the legislation so that we allow the regulator or the Commission to regulate the industry effectively.
“As much as possible, we want the bills to guarantee that government takes benefit from all sides. This pertains to the fiscal bill in particular.
“We want as much as possible to discourage legislation of issues that bother on contacts between the industry players.
“We also want to say that the funding and administration of the Host Community Trust does not place a burden on the licencee”.
This comes as the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) and Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) have opposed discretionary powers of the President to award oil blocks and licenses.
Speaking on the Petroleum Industry Administration Bill, Chairman, PENGASSAN and NUPENG PIB Committee, Hyginus Onuegbu, expressed concern over the excessive powers granted to the Nigerian Petroleum Regulatory Commission (NPRC).
In veiled reference to the current situation where Nigerian President, Muhammadu Buhari doubles as Minister of Petroleum Resources, Onuegbu said: “We are worried that given the wide powers of the Commission, we may witness a situation where a serving Nigerian President may appoint himself/herself as the Chairman of the Commission.
The combined powers of the Commission under the Petroleum Industry Governance Bill, the Petroleum Industry Fiscal Bill and the Petroleum industry Administration bills are too expansive and should be curtailed as the concentration of such powers in one body will create not only unnecessary bureaucratic bottlenecks but can also lead to abuse”.
On the discretionary powers of the President to award oil blocks and licenses, he opposed Section 8 (7) of the PIAB which provides that the President may direct the Commission to negotiate and award petroleum licenses to qualified investors outside of the bidding process.
“Although the section explains that any such awards may only be for strategic and bilateral purposes, it may still be subject to abuse. More so, as we have had occasions in the past when Nigerian Presidents and their Petroleum Ministers awarded lucrative oil blocks to themselves or their cronies. Routinely also, contracts and licenses are awarded as political patronage or personal favours This section, though qualified, provides a loophole for the continuation of such abuses. We therefore demand that this section be deleted in its entirety,” the chairman submitted.
In his presentation, the Executive Secretary, Nigerian Content Development and Monitoring Board (NCDMD), Simbi Wabote, said failure to comply with local content should be among the grounds for revocation of license in the PIAB.
Wabote said compliance with local content requirement in accordance with the Nigerian Oil and Gas Industry Content Development Act should be one of the guidelines for revocation of license.
Declaring the public hearing open, Senate President Bukola Saraki assured that the Senate will pass the three bills before the National Assembly embarks on annual recess.
The National Assembly is expected to embark on long break by end of July.
The Senate President also assured that the harmonised Petroleum Industry Governance Bill (PIGB), which was last week last referred to the conference committee for further legislative work, will submit its report this week.
The Senate President also expressed disappointment over the absence of the government ministries, departments and agencies at the public hearing on the bills expected to introduce reforms in the oil and gas sector of the nation’s economy.
Those absent at the event include the Ministry of Petroleum Resources, Central Bank of Nigeria (CBN), Ministry of Finance, Petroleum Products Pricing Regulatory Agency (PPPRA), Department of Petroleum Resources (DPR), Petroleum Equalisation Fund Board, Niger Delta Development Commission (NDDC), Amnesty Programme, Accountant General of the Federation among others.
The joint committee comprises of three standing committees of the Senate. They include: Committees on Petroleum Resources (Upstream), Petroleum Resources (Downstream) and Gas Resources.
Saraki said the will boost economic growth and lead to a more efficient oil sector that is globally competitive.
He noted that the Petroleum Industry Fiscal Bill, aims to fix the anomalies in the nation’s existing fiscal framework for the petroleum industry which is outdated, especially with regards to royalty and tax regimes.
“For instance, billions of dollars have been lost through non-invocation of provisions in subsisting laws, at those times when crude oil price crosses certain thresholds,” Saraki said. “The Bill will fix this as well as remove difficulties and uncertainties surrounding our tax assessment and collection system.
“Additionally, it will remove distortions created by the Associated Gas Framework Agreement; and provide comprehensive fiscal terms for the development of our abundant natural gas resources.
“Perhaps the most critical objective of the Petroleum Industry Fiscal Bill is that it will enhance our international competitiveness and make Nigeria a choice destination for oil and gas investors,” he stated.
The Petroleum Host and Impacted Communities Bill, according to him, provides for a legal framework for the development of the petroleum host and impacted communities.
“It is a pan-Nigeria Bill that will cater for communities that are hosts to upstream assets, as well as significant midstream and downstream assets and infrastructure.
“The Petroleum Host and Impacted Communities Bill is unique because it overcomes the pitfalls of past efforts; and is structured to bring funding for the development of host communities, under the direct control of the communities themselves.
“We expect the Bill to make for greater harmony and partnership among the various stakeholders in the sector. I urge everyone to pay particular attention to presentations by representatives of host communities,” he said.
He stated further that the bills are critical to the growth of the nation’s economy, the livelihood of all Nigerians and the interests of investors.
OWEDE AGBAJILEKE, Abuja
