As the Petroleum Industry Governance Bill (PIGB) was laid on the floor of the Senate by the joint committees on petroleum (downstream and upstream) and gas, stakeholders and experts have warned of the dangers of passing the bill in tranches and non-incorporation of the demands of host communities.
They also stressed the need for the Federal Government to insist on favourable fiscal incentives for the country, emphasizing the need for quick passage of the bill.
They believed that the Petroleum Industry Bill (PIB), which has been renamed PIGB, provided for a new legal framework for the sector, a new fiscal regime, governance and regulatory framework for the petroleum industry.
It also defined who gets what and how between government and investors on various business arrangements common in the sector. Unfortunately, the debate on the bill at the National Assembly has been characterised by controversies until last week Thursday, when it achieved the new feat, raising hopes that the bill may be passed soon.
The main objectives of the Bill, according to the Minister of State for Petroleum Resources, Ibe Kachikwu, include the creation of efficient and effective governing institutions with clear and separate roles for the petroleum industry; establishment of a framework for the creation of commercially oriented and profit driven entities that will ensure value-add and internationalization of the petroleum industry.
Others are the promotion of transparency and accountability in the petroleum industry; and the creation of a conducive business environment for operators in the petroleum industry.
Speaking on the need for quick passage of the bill, Petroleum and Natural Gas Workers (NUPENG), President and General Secretary, Igwe Achese, called on the National Assembly to expedite action on the passage of the bill, to return the industry to the path of growth.
He said that NUPENG has examined the progress so far made in the passage of the Petroleum Industry Governance Bill and other components of the proposed Petroleum Industry Bill, and expressed disappointment at the slow pace of work in the passage despite the assurance given by the leadership of the National Assembly that the bill will receive accelerated hearing and passage.
An Oil and Gas Analyst, Ifeayi Izeze, emphasised the need for the Federal Government to ensure that the new bill addresses the desires of the Niger Delta communities.
Essentially, he said the passage of the bill in tranches could delay efforts at addressing issues relating to the interest of the oil communities, which may endanger the peace in the Niger Delta, saying PIGB must ensure that interests of the people of the region are addressed.
Izeze stated: “It is wise for the government to ensure that the bill properly addresses the needs of the oil producing communities.
Their desires to pass the bill in tranches, which may delay the aspect of community development, may lead to Niger Delta crises. The Federal Government should also ensure that it insists on earning higher revenue from the crude oil resources. The International Oil Companies (IOCs) have cheated the country for too long in respect to fiscal policy. If they are not ready to agree with the government’s fiscal policy, it is better they sell off their assets and leave the country.”
The Director, Centre for Petroleum Energy Economics and Law, University of Ibadan, Prof. Adeola Adenikinju, said unbundling the NNPC as contained in the PIB, would allow the new national oil company to operate independently and more efficiently.
Chairman of Petroleum Technology Association of Nigeria (PETAN), Bank Anthony Okoroafor, said Nigeria has lost $10 billion fresh investments to the non-passage of the PIB.
According to him, passing the PIB will help to establish a new framework for good governance and best practices.
Okoroafor said the law would enhance government revenue and block leakages through better tax codes and undo the harm done by the Producing Sharing Companies contracts of 1993.