17 November 2015, Sweetcrude, Abuja – The National Assembly on Monday asked President Muhammadu Buhari to quickly transmit a new Petroleum Industry Bill (PIB) to the parliament for consideration and passage into law.
The Speaker, House of Representatives, Hon. Yakubu Dogara, who made the call at the opening ceremony of the National Assembly Dialogue on Economy, Security and Development in Abuja, described the PIB as one of the most important pieces of legislation that should be quickly considered and passed in the interest of the country.
Dogara stressed that investment decisions in the petroleum sector could no longer wait, adding that government cannot ignore efforts to rearrange the sector in a manner that would benefit the nation.
The Speaker noted that it was important for President Buhari, as Minister of Petroleum, to transmit a new PIB to the National Assembly for consideration and passage into law.
He said the immediate transmission of a new PIB to the National Assembly had become even more compelling because oil and gas still accounts for over 70 per cent of the country’s foreign exchange earnings despite the rapid drop in oil prices.
The Federal Government stated a few weeks ago that it would split the long-awaited Petroleum Industry Bill, PIB, to speed up its passage through parliament, potentially unlocking billions of dollars in frozen investments.
The highly controversial bill has been gathering dust since 2008 because of disagreements between the government and global oil majors over its terms.
The newly-appointed Minister of State for Petroleum Resources, and Group Managing Director of the Nigerian National Petroleum Corporation (NNPC) Emmanuel Kachikwu, said recently the delay was hurting the economy.
He noted that, “The average source of volumes in investments that we are losing on an annual basis because of the lack of PIB is in excess of $15 billion (13.7 billion euros),” he told senators.
“The non-passage of the bill in whatever form over the years has created a level of uncertainty that no international investor wants to grapple with.”
According to Kachikwu, the National Assembly needs to “find a way of working with us and go ahead and pass those elements of (the) PIB where there’s not much contention,” he added.
NNPC spokesman, Ohi Alegbe said the PIB was currently being fine-tuned before it is resubmitted to parliament early next year.
“The vice president (Yemi Osinbajo) and Dr. Kachikwu have made a commitment the PIB will be split into sections. This is necessary to move forward,” he said.
Analysts believe the PIB would help redefine the fiscal terms in the oil and gas industry, increase Nigeria’s share of revenue and also help restructure the state-run NNPC.
Muda Yusuf, director-general of Lagos Chamber of Commerce and Industry (LCCI), said cherry-picking parts of the wide-ranging bill made sense in the current economic climate.
“Our current economic problems have roots in the global oil crash. If the PIB is in place, the oil majors will be encouraged to invest more in the industry,” said Yusuf.
The latest proposals have created uncertainty among many expatriate oil workers at a time of wider disquiet about the Nigerian economy among investors.
But a senior executive of the Oil Producers Trade Section (OPTC) of the LCCI, who asked not to be identified, said oil firms would be happy if the grey areas were addressed.
“The PIB in its current form should be reviewed and broken down in such a way that the grey areas are resolved.
“The delay in passing this important law is hurting our business, hurting the economy,” he said.
The PIB as proposed would see international oil companies pay 10 percent of their net profits to a “Petroleum Host Community Fund” to benefit oil- and gas-producing areas.
Oil majors, though, have balked at the prospect of their profits being cut, complaining the terms were too harsh and could stymie investment.
Companies such as Shell, Total and Chevron have in recent years been selling off assets in Nigeria while new investments have stalled.
At the same time, areas that would benefit from the increased revenue are mainly in the oil-producing south, creating opposition in other parts of Nigeria.
Politicians in the impoverished Muslim-majority north already claim the largely Christian south already gets more than its fair share of oil revenue.
Both complaints have contributed to the delay.
White collar unions have also said the terms in areas such as the extent of Nigerian firms’ involvement in the sector needs to be addressed.
Nigeria — Africa’s number one crude producer and biggest economy — depends on oil for more than 90 percent of government revenues.
But the global crash in crude prices since mid-2014 has seen revenues fall by 70 percent in that time, weakening the naira currency and depleting foreign reserves.
The forum was organized by the National Institute for Legislative Studies (NILS).