…List condition for realisation of its full benefit
Michael James, Lagos, and Mkpoikana Udoma, Port Harcourt
26 May 2017, Sweetcrude – The umbrella bodies of workers in Nigeria’s oil and gas industry – the Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, and the Nigeria Union of Petroleum and Natural Gas Workers, NUPENG – have commended the Senate for the passage of the Petroleum Industry Bill, PIB, now rechristened the Petroleum Industry Governance Bill, PIGB, 2016.
But, they said the new law approved by the 8th Senate on Thursday will not deliver the full benefits of the intended reforms except the other aspects of the PIB are also legislated.
The workers also said they look forward to the concurrent passage of the PIGB into law by the Federal House of Representatives and the eventual accent to the law by the President of Nigeria.
The chairman of NUPENG and PENGASSAN’s Petroleum Industry Governance Bill Committee, Mr.Mr. Chika Hygenius Onuegbu, described the passage of the bill as a milestone achievement.
“We commend the 8th Senate led by Senate President Senator Bukola Saraki and its Joint Committee on the Petroleum Industry Governance Bill (PIGB) led by Senator Tayo Alasoadura for the passage of the Petroleum industry Governance Bill (PIGB) 2016.
“This is indeed a milestone achievement especially when you consider that the PIGB is not an Executive Bill. Also, when you consider that Nigeria has lost over N235 billion dollars due to its inability to pass the Petroleum Industry Bill into law since the reform in the Nigerian Petroleum industry was kick-started 17 years ago. We therefore look forward to the concurrent passage of the Petroleum Industry Governance Bill (PIGB) into law by the Federal House of Representatives and also eventual accent by the President of Nigeria,” he said.
However, he note that the PIGB only deals with the one aspect of the PIB, that is the governance and institutional framework of the Nigerian Petroleum industry, stressing that his committee look forward to the passage of the other aspect of the Petroleum Industry Bill (PIB), namely The Petroleum Fiscal Framework Bill; The Petroleum Industry Downstream Administration Bill; The Petroleum Industry Revenue Management Framework Bill and the Petroleum Host Community Bill.
“The passage of the PIGB whilst commendable will not deliver the full benefits of the intended reforms except if the other aspects of the PIB are also legislated.
“For instance, we know that there is no mention of the Petroleum Host Community Fund in the PIGB and we know that one of the major challenges facing the industry is host community and Niger Delta issues. Until recently , following the truce of the Acting President when he visited the Niger Delta this year, the Militant Attacks in the Niger Delta led to significant amounts of shut-in production at onshore and shallow offshore fields & frequent declaration of force majeure by oil and gas companies in Nigeria. You will recall for instance that Nigeria’s 2016 budget was based on Crude oil export of 2.2mln bpd with MTEF projections of 2.347mln and 2.469mln bpd for 2017 and 2018 respectively.
“Unfortunately, due to the Militancy in the Niger Delta, Nigeria’s crude oil export in 2016 only averaged some 1.5mln bpd creating a deficit of some 700,000 bpd in export, thereby worsening her economic crises and pushing the country deeper into recession, exchange rate crises, and stagflation,” Mr Onuegbu said.
“Therefore, it is important that any legislation to address the challenges in the Nigerian oil and gas industry must make provisions on how to effectively address the Petroleum Host community issues.
He added that the Fiscal regimes aspect of the PIB is not included in the PIGB, describing it as an aspect that will guide the final decision of the international investors on how much to invest as it has direct impact on the profitability or other wise of the investments in the Nigerian oil and gas sector vis –a-vis other Petroleum host countries.
“Having said that, we must commend the 8thSenate for this feat while looking forward to the passage of the other aspect of the PIB and the concurrent passage by the House of Representatives and accent by the President of Nigeria,” he said