Yemisi Izuora
Speaker of the House of Representatives, Yakubu Dogara, has sought the understanding of President Muhammadu Buhari to, as a matter of urgency, sign into law the petroleum industry governance bills (PIGB) passed by the lower legislative chamber when it is harmonised with the senate and transmitted to him.
The House passed the legislation on Wednesday.
Dogara said the new legislation will be transmitted to the president as soon as it is harmonised.
He said the parliament had to move on and pass its own version of the bill following failure of the executive to present a draft bill to the national assembly.
Dogara expressed optimism that with the passage of the bill, the petroleum industry will witness improvement, “as it will attract investors and open up the sector as the Nigerian National Petroleum Corporation (NNPC) would be unbundled with the creation of other bodies”.
On May 27, 2017, the senate passed the Bill and sent it to the lower legislative chamber for concurrence.
The upper legislative chamber broke the bill into four parts to allow easier passage.
The bill is built on recommendations of the Oil and Gas Implementation Committee (OGIC) constituted by former President Olusegun Obasanjo, in 2000.
It was first introduced to the parliament by the late President Umaru Musa Yaradua in 2008.
The PIGB aims to establish the Nigerian petroleum regulatory commission as a one-stop regulator that will be responsible for licensing, monitoring, supervising petroleum operations, as well as enforcing industry laws, regulations and standards.
This means that the president will no longer have the executive power to allocate oil blocks.
It also seeks to establish a fiscal framework that encourages investment in the petroleum industry, and provides a framework that seeks to ensure that host communities are taken care of.
Meanwhile, Senate President Bukola Saraki says the passage of the PIGB will resolve the issues that led to petrol scarcity.
Saraki said the passage of the bill is a historic milestone in Nigeria.
“Yesterday, after nearly two decades of back-and-forth, near-misses and near-passages, the 8th national assembly finally reached a milestone with the passage of the Petroleum Industry Governance Bill — otherwise known as PIGB. This is historic,” he said.
“Many of you will recall that in May 2017, the senate took the first step in this direction, and yesterday, the house of representatives did the same by passing this bill that is aimed at modernizing the petroleum industry and overhauling the entire system – to create a conducive business environment for petroleum industry operations.
“The PIGB will also promote openness and transparency in the industry — by clarifying the rules, processes, and procedures that govern the oil and gas sector. This should eliminate, or at worse, reduce corruption significantly and make the sector more efficient and more productive.
“Most important, with the ongoing fuel scarcity in many parts of the country, Nigerians should know that the PIGB, once it becomes law, will help alleviate those issues that lead to scarcity, such as: the limited supply of premium motor spirit (PMS); the poor import planning schedule that leads to fuel importation constraints; the corruption, diversion and smuggling — that leads to artificial scarcity; and the absence of deregulation in the sector.
“Let me remind our people that this is another promise made and kept by the 8th Assembly.
“Many people people did not give us any chance when we promised to pass the PIB. Now, we have scaled this first major hurdle and we promise to pass the remaining related bills like the Petroleum Host Community Bill and Petroleum Industry Fiscal Bill very soon to complete the circle.”
Similarly, reacting to the PIGB passage, Sarah Muyonga who is Nigeria’s Manager of Natural Resource Governance Institute (NRGI), said the development would entrench transparency and Boost investors confidence in the Industry.
Muyonga in particular observed that unbundling of the NNPC Will and creating a national oil company with authority to embark on full commercial arrangement will bring about enhanced revenue to government.
“I want to believe that the president will give assent to the Bill and again it is important to see a single regulator putting a check on activities of operators. We have observed cases where the DPR operates as the regulator but then the NNPC takes some measure of regulatory control as well as commercial activities and all of these brings some level of inefficiency and lack of accountability in the whole system” she said.
Oriental News Nigeria reports that the NRGI had in one of its reports released last alleged lapses in NNPC.
The report observed that despite what seems to be an improvement in the efforts to enhance transparency in Nigeria’s oil and gas industry, the latest report of the NNPC failed in running its operations in an opaque manner.
The 2017 Resource Governance Index (RGI), assessed “the governance of oil, gas and mining in 81 countries, in policy areas including state-owned enterprises, taxation, licensing, local impact, sovereign wealth funds and sub-national revenue sharing”.
The 2017 RGI was said to have assessed how 81 resource-rich countries govern their oil, gas and mineral wealth and the assessment covered the period 2015-2016.
The report noted that despite some progress in transparency of revenue collection over the past five years, tracking payments from oil and gas companies in Nigeria remains challenging.
According to the report, NNPC, which is the largest state-run oil firm in Africa, achieved a poor governance score of 44 of 100.
The report noted that the corporation mainly scored well on indicators that measure elements of transparency required by EITI reporting, such as transfers to government and production volume disclosure.
It acknowledged that the NNPC has recently strengthened some of its reporting practices, particularly for high-level financial data.
“However, the company does not disclose detailed annual reports on its finances, despite top officials having made a commitment to do so. Little information is publicly available, particularly concerning some of NNPC’s least efficient and most questionable activities, notably earnings by its subsidiaries, the costs of its operations and its significant spending on non-commercial activities.
Government agencies and external auditors have disputed NNPC’s interpretation of rules set in the constitution and the NNPC Act governing monetary transfers between NNPC and the government. Officials exercise significant discretion around how NNPC sells the government’s share of oil production for example, when selecting buyers, pricing exports or transferring sales proceeds to the government,” the report explained