…Recommends unbundling of fiscal provisions in Bill
27 May 2015, Sweetcrude, Abuja – Stakeholders in the Nigerian oil and gas industry have urged the out-going National Assembly to ensure that it passes the Petroleum Industry Bill, PIB, in the next three days before the end of the current legislative session.
In a Communiqué made available to our correspondent in Abuja, at the end of a Round-Table on the ‘Nigeria Energy Policy Framework: Expected Impact of Petroleum Industry Bill,’ organised by the Centre for Petroleum and Mineral Law Research, the stakeholders also said that “the NNPC must be unbundled and commercialized as a true private enterprise with no government day-to-day interference.”
The group concluded that the PIB is highly important for the enhanced local participation of Nigerians in the oil and gas upstream and down stream sectors.
It noted that the House of Representatives and Senate ought to do all within its powers to pass the PIB into law within its remaining legislative days for the benefits of Nigerians.
The Round Table emphasized the importance the House of Representatives attaches to passage of PIB and its desire to pass the Bill in that Chamber of the National Assembly.
It pointed out that the new Bill as amended by the House Ad – Hoc Committee on the PIB has addressed the abuse of discretionary powers by the Minister issuing authorities and the executive branch of federal government of Nigeria in award of oil blocks, operational and management issues in the petroleum industry. The Round Table therefore commended the effective corporate governance initiatives introduced by the PIB.
The Round Table concluded that the PIB must not just promote openness and transparency in the Nigerian oil and gas industry in the letters of the Bill but in its spirit of implementation and enforcements.
In the light of recent acute scarcity of petroleum products, the Round-Table noted that the downstream petroleum sector must be properly deregulated to ensure availability of PMS and other refined petroleum products.
Hon. Ali Ahmed, Chairman, House of Representative Committee on Justice, who chaired the Round Table, recounted the history of Petroleum Act of 1969, and efforts made over the years to amend it. He explained that tt has taken close to 50 years for a concerted effort like the PIB in the efforts of amending the Petroleum Act.
On the fiscal issues in the Bill, the group concluded that there is need to unbundle the fiscal sections of the PIB to become a stand-alone legislation. More appropriately, it noted, the fiscal section of PIB may be an amendment and inserted in the existing Petroleum Profit Tax Act (PPTA).
It stressed the duplicity and complexity of the tax regimes in the Petroleum Industry, pointing out noted that the PIB has not addressed the issues of taxation holistically and specifically for the growth of the industry and smooth operations of the industry players.
The Round Table further noted that the issue of pioneer status has been controversial as it pertains to its utilization by upstream petroleum companies. It therefore noted that there is need to address clearly who qualifies for Pioneer Status and its extension to the upstream petroleum sector.
According to the group, the Pioneer Status ought to be made for Nigerian companies who need a hand-up in growth in the highly competitive Petroleum Industry.
According to the group, another tool for growth of the Petroleum industry is the partnership of Nigerian companies and Nigerian States with other sovereign states or companies to develop Nigeria’s natural resources.
It noted the Nigeria-Sao Tome Principe Joint Development Authority (JDA) petroleum licence templates, including the licensing and contractual synergies deplored in maximizing the natural resources between the sovereign states that share territorial waters or geographical boundaries.
The communique noted the local content rationale for the PIB, but also addressed the encouragement of Foreign Direct investment by creating economic space for foreign players to invest in the nation’s petroleum industry.
It noted that, “In a global economy such as the Petroleum Industry, Nigerians cannot afford to close its doors to capital and credits that foreign may invest in the Petroleum Industry for its effective growth.”
The Round Table concluded that the fiscal regime in the petroleum industry must be reformed to maximize the potentials of corporate and individual excellence of Nigerians.
Discussions at the round-table was led by Hon. Ali Ahmed, Chairman, House of Representatives Committee on Justice. Mr. Ahmed Yabo, Legal Adviser, Nigeria- Sao Tome and Principe JDA spoke on the Impact on the Upstream Oil and Gas Sector, while Mr. Mark Dike, the President of Chartered Institute of taxation of Nigeria (CITN), represented by Azeez Alatoye, Chairman, Oil and Gas Faculty of CITN spoke on the Impact of the fiscal regime on Petroleum production, the downstream and gas.
Dr. Perisuo Dema, Director, Centre for Petroleum and Mineral Law Research moderated the round-table.
Other contributors include Samuel Andrews Esq, of Suffolk University Law School, Boston, USA; Emmanuel Idoko of Enrst & Young; Tom-George Ibiso of Central Bank of Nigeria; Nwankwo Chidi of Nigerian Nuclear Regulatory Authority, Azeez Alatoye representing the President, Chartered Institute of Taxation of Nigeria and Dr.Perisuo Dema were all discussants at the round-table.