As the Presidency prepares to re-present the Petroleum Industry Bill to the National Assembly after suffering a stillbirth in the sixth legislature, a resurgence of the plots that shot it down in its first advent is overt, writes  OLUWOLE JOSIAH

 

The attempt to phase out the regime of subsidy for petroleum products as announced by the Petroleum Products Pricing Regulatory Agency on January 1, and the resultant impasse which almost brought the nation to a halt, is the new impetus for the pursuit of the enactment of the Petroleum Industry Bill for a comprehensive legislation for the industry.

 

The PIB, as it is fondly called, is articulated to totally reorganise the nation’s petroleum sector in such a manner that will make it transparent and efficient. The bill, which is over 300 pages, makes extensive revolutionary provisions for the sector.

 

The administration of Umaru Musa Yar’Adua, had proposed the bill despite initial fast-dragging by previous governments, but the bill ran into turbulent waters immediately it arrived at the legislature. The vested interests tore the chambers apart and planted the seed of suspicion everywhere. Several copies of the bill with different variations flooded the National Assembly, making it difficult for members to forge a common front on the bill.

 

The restructuring of the industry as proposed by the PIB would see the establishment of the National Petroleum Commission, which would be run by a board chaired by a federal minister. It will have the overriding responsibility of formulating policies for the administration of the industry. The bill states categorically that the commission under the Act “shall have power to coordinate the activities of the petroleum industry and exercise overall supervisory functions over petroleum operations and all the institutions of the industry.”

 

The bill also provides for the creation of some agencies out of the present Nigerian National Petroleum Commission, while it would transform into the National Oil Company.

 

As the bill provides in clause 138(1-2), “There is established by this Act the Nigerian National Petroleum Company Limited (The National Oil Company), which shall be a body corporate with perpetual succession and a common seal. The National Oil Company shall be incorporated as a private limited liability company by the Attorney General of the Federal Government on the instruction of the Federal Executive Council not later than three months after the effective date. Ownership of the National Oil Company shall be vested solely in the Federal Government of Nigeria.”

 

When the bill becomes effective, the company will be involved in all forms of oil exploration activities, just like any other oil company in the sector. The bill, in this wise, will create a level-playing field for all players in the industry.

 

While the Directorate of Petroleum Resources in the Ministry of Petroleum Resources will be phased out as well as the Petroleum Inspectorate of the NNPC, a new agency, known as the Nigerian Petroleum Inspectorate will be created. It will have the responsibility of maintaining standards and regulating the operations of the industry. It will be industry’s police, enforcing all the policies, laws, and regulations relating to technical aspects of the industry.

 

The Petroleum Products Regulatory Authority has also been proposed by the bill as another agency that will promote the implementation of national commercial policies for the downstream petroleum industry as well as regulate commercial activities of the downstream sector.

 

Another novel creation of the bill is the establishment of the National Petroleum Assets Management Agency, which will have oversight of costing in the upstream petroleum industry so as to maximise the total revenue accruing to the government from the upstream sector.

 

Other creations of the bill include the Petroleum Technology Development Fund, not different from the PTDF still standing today and the Petroleum Producing Host Communities Fund, which will cater for the yearnings of the host communities by protecting their interest in the entire process of administering the industry.

 

However, some aspects of the bill are being contested by international oil companies. They include areas that have to do with tax regimes that tend to put more burdens on them and make them more responsible in the way they do business in Nigeria. Captured under the Nigerian Hydrocarbon Tax, operators would be required to pay taxes on gas products separately as against what it is now.

 

As the National Assembly awaits the arrival of the bill for another circle of debates on its provisions, there are fears that the bill is likely going to witness a repeat of attacks by some stakeholders in the industry and threaten its survival once again.

 

Chairman of the Senate Committee on Petroleum (Downstream), Senator Magnus Abe, bared his mind on the bill. He said it was expected that a revolutionary piece of legislation like the PIB should naturally attract the kind of resistance it encountered in the last legislature.

 

He said, “There is no way you will make such a revolutionary reorganisation of the oil industry in this country without going through challenges. I think it will be naïve of any Nigerian to think so. I know for a fact that there are a lot of interests: economic interests, political interests and social interests that are tied to the oil sector.

 

“In dealing with a subject like the petroleum industry bill which seeks to reshape the industry, recreate it and remake it on a commercial basis, will take out a lot of the waste and the unnecessary patronage that is currently associated with the industry, I don’t think that we can achieve that without some level of turbulence and challenges.”

 

He said one way out of the mess in the oil sector was for the National Assembly to put the interest of Nigeria first, finding a common ground and passing a law that would enable the petroleum industry to develop for the benefit of the people.

 

“I know that oil industry players would have their own interest, which they would like to see written into the law; but we are Nigerians, the resources belong to us and it is in the interest of our people that we should promote over and everything else. And we also have to remember that in promoting the interest of our people, we must make sure that those who participate in the industry can get fair returns for their investments because if they don’t get it, then even trying to get something for your own people will be useless.

 

“It is not rocket science. There are existing models in other societies that they have used and it is working and has worked very well. You can even take the case of Malaysia, we have Petronas; in Brazil, you have Petrolbraz and the Libyan Oil Company. All these are reformed oil sectors that have resulted in the national oil companies themselves becoming major economic and big time players in the industry. They are even investing in other societies outside and bringing home profits from their investments.

 

“But instead, our own NNPC is a source of debt, a source of patronage, is a source of waste; it is a source of mismanagement of the oil industry. So the PIB is supposed to take care of all that and any time you want to change something that people are benefiting from, there is bound to be challenges. You know that that is always the case, people don’t give away their benefits,” Abe said.

 

In spite of his worries over the bill, Abe noted that the National Assembly would certainly determine the final outcome of the bill, while urging that the executive should do all within its powers to get the documents to the NA so that work could start in earnest.

 

President of the Senate, David Mark, has also promised that the bill would be given due attention once it comes before the Senate, noting that “the problem with the PIB was that when it showed up, there were so many versions. As many as three or four versions were in the hands of senators and members of the House of Representatives.”

 

He however said, “If we are to build the sector, we have to get the bill off the ground and this is why it is necessary for cooperation between the legislative and the executive.”

 

His assurances on the bill are captured thus, “We in the present Senate are looking towards expeditious passage of the bill to ensure greater benefits to all stakeholders in good time.” The unassailable fact is that the National Assembly again can become the graveyard of this all important bill, unless some patriotic zeal is manifested by its leadership to push it through, the vested interests notwithstanding.”

 http://www.punchng.com/politics/pib-dealing-with-conflicts-interests-at-nassembly/