A Review of the Nigerian Energy Industry

PIB splits Nigerian Senate as discussion commences

07 March 2013, Abuja – Members of the Nigerian Senate, Tuesday split along Southern and Northern regional line when discussions on the new Petroleum Industry Bill, PIB, commenced on the floor of the Senate.
Tuesday’s proceedings marks the beginning of a three-day debate on the bill.

Members shouted down one another when the discussions started. The session was only prevented from being rowdy by the maturity of the senators, the entire session would have been rowdy as

The contentious issues in the proposed law were the host community development fund and the national frontier exploration agency.

Northern Senators challenged the 10 percent allocation for host communities and the structuring of the national frontier exploration agency.

The discussions opened when Senate Leader, Victor Ndoma-Egba, presented for discussion a Bill for an Act to provide for the Establishment of a Legal, Fiscal and Regulatory Framework for the Petroleum Industry in Nigeria and for Other Related Matters for Second reading.

Majority of the senators who spoke, regretted that despite the huge funds received by the region for development so far, there was nothing to show in terms of infrastructural development, especially in communities where oil was being produced.

There were accusations of mismanagement of 13 percent derivation fund and Niger Delta Development Commission, NDDC, fund amounting to the tune of N11.3 trillion, against the Niger Delta region governors since 1999.
Senators obviously became influenced by this observation to oppose the Host Communities Fund provided for in the Petroleum Industry Bill, PIB.

Before Tuesday’s plenary on a Bill for an Act to provide for the Establishment of a Legal, Fiscal and Regulatory Framework for the Petroleum Industry in Nigeria and for Other Related Matters, the senate, there had been one failed attempt to debate the PIB.

It was Senator Ahmed Lawan, ANPP, Yobe North, who first opposed the provision of 10 percent fund for the host communities in the bill, on the grounds that the extant laws did not only make provision for 13 percent as derivation fund but NDDC and other sources of funding for the Niger Delta States.

According to him, though he was in full support of the bill, there was undue financial attention on the Niger Delta region. Citing newspaper interview with Ijaw leader and elder statesman, Edwin Clark, and other newspaper references, Senator Lawan insisted that the region had so far received a total of N11 trillion between 1999 and date.

Lawan expressed regret that those at the helm of affairs in the region had refused to carry out commensurate development, especially in the oil host communities, saying “I am in full support of the bill but with some massive reservation.”

He also regretted that at present, Nigeria has not been able to disclose the real quantity of crude oil it was producing or the amount the country was realising on oil to its citizens. He contended that oil companies should be transparent and free from government interventions.

He demanded a research exploration to be carried out across the country, even as he urged his colleagues to strongly oppose the 10 percent for the host communities, adding that it shouldn’t have any room in the PIB as the current 13 percent derivation fund should take care of such.

His remark that most governors of the region had failed to live up to expectations, in spite of the huge amount made available to the region since 1999, attracted reaction from Senator James Manager, PDP, Delta South.

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  • The impression we come away with is that the PIB has not been adopted as a policy supported by the ruling PDP. The party enjoys a commanding majority in both the Senate and the House of Representatives and if the executive branch of government is unable to get the party to rally behind the bill, it portrays the executive as incapable of building consensus, and the party as ill equiped to govern. The significance of this bill cannot be over-emphasised and so, if the executive, the legislature and the party in power cannot find unanimity of purpose, let them be forthright enough to maintain the status quo ante. If leaders who find themselves in charge at any given point in time cannot add value to the system, then it will be obtuse to deplete whatever value the system has in place.

  • The impression we come away with is that the PIB has not been adopted as a policy supported by the ruling PDP. The party enjoys a commanding majority in both the Senate and the House of Representatives and if the executive branch of government is unable to get the party to rally behind the bill, it portrays the executive as incapable of building consensus, and the party as ill equiped to govern. The significance of this bill cannot be over-emphasised and so, if the executive, the legislature and the party in power cannot find unanimity of purpose, let them be forthright enough to maintain the status quo ante. If leaders who find themselves in charge at any given point in time cannot add value to the system, then it will be obtuse to deplete whatever value the system has in place.