A Review of the Nigerian Energy Industry

Fresh concerns mount over Petroleum Industry Bill

Diezani-PIB18 March 2014, Lagos – As Nigerians wait eagerly for the passage of the Petroleum Industry Bill, PIB, there are fresh concerns that the current National Assembly, like the previous one, may not have the political capacity and will to pass the reform bill.

The joint Senate Committee on Petroleum Upstream, Downstream, Gas, Judiciary and Legal Matters had in November 2013 concluded its public hearing on the bill, promising that it would be passed into law.

But a source close to the committee said at the weekend that the bill would not be passed until all contending interests were accommodated.

“The truth is that nobody has ever been in a hurry to pass the bill into law, no matter the noise all over the place. This bill is too important to Nigerians and perhaps the most important bill to the economy of this country. It is also the most controversial bill in the life of this present civilian rule, more controversial than even the Electoral Law.

“This is a bill that was kick-started in 2000 and is yet to be passed into law. No bill has generated much interest and courted controversy like the PIB. So, it is not a bill you can pass into law overnight without addressing the various concerns,” he said.

A consultant geoscientist and Managing Director and Chief Executive Officer, Subsurface Consulting, Mr. Jasper Nwachukwu, told THISDAY that it would be “a miracle” for the current National Assembly to pass the PIB.

“I am not sure that even the executive wants the PIB to be passed because if it is passed, it will dispossess them of the control of the NNPC, which is their cash cow. The non-oil producing communities will not allow the PIB to be passed because of the 10 per cent that is provided for the oil-producing communities.

“The APC members in the National Assembly will not allow the PIB to be passed because it will be a scorecard for the Jonathan administration. In fact, the National Assembly is not united to pass such an all-important bill at this time. The issue of the members that decamped, the 2015 elections and the National Conference are already distracting them,” he said.

A top executive of one of the International oil companies (IOCs) said that the National Assembly did not have the political will and capacity to pass the reform bill.

“It is no longer the issue of the IOCs lobbying to stop the passage of the bill. Nobody is lobbying again. Even the government is no longer enthusiastic about the bill because everybody now has interest. If the PIB is passed, there will be no issue of missing money because a good accounting policy will be put in place.

“But perhaps the greatest challenge is the northern interest. The north has the majority in the National Assembly and they won’t support the passage of the bill because they feel that the oil-producing communities are getting too much from the oil revenue, while the north is impoverished” he said.

Though 10 per cent Host Community Fund has been provided for the oil-producing region in PIB, the region has kicked against the proposed granting of “excessive” powers to the Minister of Petroleum Resources in the PIB and insisted that the PIB “should not be made to be a Personal Industry Bill for upcoming petroleum ministers.”

The north is however, against the 10 per cent fund as the region argues that the Niger Delta is already getting too much from oil revenue.

The IOCs have on several occasions restated their opposition to certain provisions of the bill, saying that the fiscal terms in the reform bill would put investments in deepwater at risk.

The companies stated that the PIB would make Nigerian fiscals “extremely uncompetitive.”

According to the IOCs, the Nigerian Joint Venture fiscal terms are already among the harshest in the world, in addition to the high risks and costs due to security and bunkering in the oil-producing communities.

Comparing Nigeria’s deepwater regime with global deepwater regimes, the companies said the Federal Government take for Production Sharing Contracts (PSCs) would also be among the highest in the world.


– Ejiofor Alike, This Day

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