Stakeholders in the nation’s oil and gas industry have said the passage of the Petroleum Industry Bill will present opportunities for the nation’s oil and gas industry.
They spoke at a breakfast lecture, entitled ‘Petroleum Industry Bill: Challenges and opportunities,’ organised by the Island Club, Onikan, Lagos.
The PIB, which has been in the works since 2008 when it was first introduced to the legislature, suffered setbacks in the 6th and 7th National Assembly.
The Lead Partner, Legal Advisory Partnership and a Senior Advocate of Nigeria, Anthony Idigbe, said the PIB was formulated to bring under one law the various legislative, regulatory and fiscal policies, instruments and institutions governing the Nigerian petroleum industry.
He said the bill proposed the introduction of new operational and fiscal terms for revenue management to enable the Nigerian government to retain a higher proportion of the revenues derived from operations in the petroleum industry.
“Passage of the bill in a form that will promote transparency and accountability is imperative. However, it is necessary to be vigilant so that the laws that will be passed to govern the oil and gas sector are not watered down but that they meet the requirements of international best practice.”
According to him, the law should ensure competitive, open, non-discretionary licensing and tender processes; independent regulator insulated from political interference; elimination of discretionary powers to the President and minister of petroleum, and establishment of petroleum host community fund to be used for the development of economic and social infrastructure of the communities within the oil producing areas, among others.
He said the PIGB only dealt with one aspect of the PIB, the governance and institutional framework of the industry, and as such would not deliver the full benefits of the intended reforms except the other aspects of the PIB were also passed into law.
“For instance, we know that one of the major challenges facing the Nigerian petroleum industry is the host community and Niger Delta issue. Until the recent peace diplomacy to the oil region by the Vice President, Yemi Osinbajo (when he was Acting President), the militant attacks in the Niger Delta led to significant amounts of shut-in production at onshore and shallow offshore fields and frequent declaration of force majeure by oil and gas companies in Nigeria,” he said.
The Chief Executive Officer, Yinka Folawiyo Petroleum Company Limited, Dr. Tunde Folawiyo, described gas flaring as one of the major challenges in the industry, saying there should be a provision in the PIB to reduce flaring.
“No provision about ownership of pipelines, depots and other assets of government. Nothing is also mentioned in terms of pricing mechanism for downstream sub-sector,” he said.
According to him, opportunities abound in the bill, described as a great start for the oil industry.
The Head, Energy Desk, Wema Bank, Mr. Segun Oderinde, stated that the PIGB was meant to separate the minister from the industry and the industry from the minister.
“The PIB is to ensure that producers key their supply obligations on gas. This is an opportunity because over 28 per cent of banking sector loan portfolio was devoted to the oil and gas sector,” he said.
The Chairman, The Island Club, Mr. Banji Oladapo, said members of the club were already working hard to take full advantage of the opportunities inherent in the PIGB.
The Senate on May 25, 2015 passed the PIGB, which seeks to unbundle the Nigerian National Petroleum Corporation and merged its subsidiaries into an entity.
The Senate President, Dr. Bukola Saraki, said last month that the upper chamber would fast-track the passage of the other bills, Petroleum Industry Administration Bill, Petroleum Industry Fiscal Bill and Petroleum Host Community Bill.
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