A Review of the Nigerian Energy Industry

‎Is PIB (non-passage) Jonathan’s biggest failure?

Former President Goodluck Jonathan
Former President Goodluck Jonathan

Oscarline Onwuemenyi

06 June 2015, Sweetcrude, Abuja – For an industry which has suffered from inadequate accountability in its nearly sixty years of existence, it is no surprise that the last regime is given a pass on explaining to Nigerians why it was unable to pass the Petroleum Industry Bill (PIB), after six years in power, and eight years since the bill was first introduced.

The PIB was designed to move the country away from the mindless profligacy of public servants to the more rational approach which deregulation represents. Currently in its eight year awaiting passage, it takes the record as the most maligned bill to pass through Nigeria’s legislature, as yet another National Assembly expired without getting it passed.

The general belief among several industry players was that the Goodluck Jonathan-led administration did not believe in the spirit of the PIB, or lacked the gumption to get it passed, despite its rhetoric otherwise.

Many think that given its unique chance to make history by the passage and implementation of the contents of the Bill, and thus spearhead the revolution in the nation’s oil and gas industry, the Jonathan administration relented and let the opportunity slip.

“It’s amazing when you consider the resources at the government’s disposal, if really it is committed to the passage of a bill that is purported to transform the industry, and the entire national economy. So, despite what they posit as reasons for not trying enough, it is clear to industry watchers the lack of commitment,” a source close to the last administration, who desired to speak anonymously, told our correspondent.

He remarked that given all her lofty speeches about transforming the industry and creating transparency and efficiency within the Nigerian National Petroleum Corporation (NNPC), the past Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke practically abandoned lobbying the legislators over the PIB.

“For someone with her clout and persuasive abilities, and the resources at her disposal, there was no justification for the hands-off approach her office adopted with regards to the PIB. She simply didn’t care so much, or the forces she was responding to preferred the status quo,” our source noted.

Writing last week in his column in the Vanguard, respected commentator on national issues, Dele Sobowale said the out-gone President missed a chance to make history by setting the course of the oil and gas industry, and the peoples of the Niger Delta, right.

He reminded Nigerians that President Jonathan and his Minister of Petroleum Resources, Mrs Alison Deziani Madueke, actually promoted the first PIB, PIB 1, while he was finishing President Musa Yar’Adua’s term in 2010-2011. “From 2010 May till May 29, 2011, the President and the Minister actively tried to promote PIB 1, which gave more concessions to the International Oil Companies, IOCs, than to Nigeria. On a state visit in February 2011, Jonathan assured the Turkish President that he would sign the PIB 1 into law before May 29, 2011.

“But, by March 2011, it was clear to us that PIB1 would never get passed. The President and the Minister simply dumped PIB 1 on the NASS and turned their backs leaving us to slug it out with the IOCs. That made it easier to simply bottle PIB 1 up in the NASS until it passed into history.

“Shortly after the 2011 Elections, the Minister of Petroleum Resources, once again, presented an amended PIB, PIB 2, to the National Assembly. However, it was pointed out that PIB 2 might never be passed because the President and the Minister could not be relied upon to lead the battle. In fact, it was bluntly stated that they would simply dump the bill and allow its opponents to defeat it by bottling it up,” he stated.

Even Jonathan claimed everything was going well and that the Bill will be passed. Speaking during a visit to the Netherlands last year, Jonathan gave the assurance that PIB will be passed into law.

He said he had been assured by the National Assembly that the seventh National Assembly would be able to complete the process of passing the bill. “The National Assembly will, as soon as it completes work on the 2014 budget, continue with the PIB as their inability to ensure its passage into law at this time will amount to its transfer to the eighth Assembly.

“This is a situation that will not be seen as being popular, since the bill was brought forward from the sixth assembly,’’ Jonathan was quoted to have said.

And in a last minute display of useless resolve, the just-expired House of Reps’ Ad-Hoc Committee woke up from its year-long slumber to consider the report on the PIB, and eventually pass the Bill.

This comes after a flurry of Bills (46 in total) were passed by the Senate at the twilight of its existence and same were transmitted to the House of Reps. Out of the number, 14 of said Bills were also passed by the House of Reps today.

However, the House of Reps’ passage of the PIB comes to little or no avail as the 7th Assembly wrapped up hours later without being considered by the Senate. The Bill would have also required passage by the Senate.
Indeed, Senate president, David Mark, in his End-of-Assembly speech, admitted the lawmakers failure to pass the Bill.

The Managing Director/CEO, Relentech Integrated Services Ltd and newly-elected member of the House of Representatives to represent Esan North-East/Esan South-East of Edo State, Mr. Sergius Oseasochie noted in a recent interview that there is no justification for the inability of government to pass the PIB all these years.

He noted that, “The seventh Assembly should have passed the Petroleum Industry Bill given the volume of work already done by the sixth Assembly on the recommendations of the Oil and Gas Industry Committee (OGIC), with the impact and benefits of such reform in a high oil price regime.”

He added that, “The impasse in the passage of PIB has led to uncertainty in the investment climate in Nigeria and the ability of the oil and gas companies to guarantee returns on investment based on their portfolio across other regions of the world. Within the lull of the non-passage, most investment that should have come to Nigeria found a safe alternative in Mozambique, and additional development of oil in Ghana, Sierra Leone, Kenya, Tanzania and Uganda. All these amount to about $50bn.”

Rivers State Chairman of the Trade Union Congress, TUC, Comrade Hyginus Chika said in a statement that the ‎failure of the last President and National Assembly to pass the bill means that incoming National Assembly and President would have to start afresh in the legislative process which he described as unfortunate.

Comrade Chika added that the none passage of the PIB has resulted to the lose of hundreds of billion US dollar investment in Nigeria’s oil and gas industry noting that investors has adopted a “wait-and-see” attitude which as stalled further investment.

‎”Since 2009 when the Yar’Adua government first introduced the PIB, no new Final Investment Decision (FID) has been taken on any oil and gas project in Nigeria, not even on the government-promoted, Brass LNG project.

“While we are dithering in Nigeria, there are new oil discoveries all over Africa, drawing in investors just as new technology is making hitherto unreachable and uneconomic hydrocarbon deposits accessible in Europe and North America thus attracting investors to those environments,” he said.

According to Sobowale, “if ever there was one great damage President Jonathan did to the people of the Niger Delta, it would have to be his failure to get the Petroleum Industry Bill, PIB, passed twice – first in 2011 and again in 2015.”

He noted that if there is one legacy which can be regarded as inexcusable it is the death of PIB 2. “In short, from 2010 to 2015, President Jonathan, members of the NASS from the Niger Delta (irrespective of political party), Governors and State Houses of Assembly in the Niger Delta, as well as “professional” public opinion leaders from the ND, had betrayed their people. The major culprit was President Jonathan,” he wrote.

He added that it would have been inconceivable for the people of the Niger Delta, until it happened, that one of their sons would be in Aso Rock for eight years, three as Vice-President and five as President, and fail to push for the passage of the one bill that would provide for more equitable distribution of revenue accruing from oil and gas exploration and export.

“Today, as Jonathan gets set to move out, that is the unfortunate reality. That reality will cost the Niger Delta immeasurable fortune and lost job creation opportunities in years to come. With this golden opportunity lost, the oil producing areas of the region face innumerable years before they can regain the initiative.”

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