Oscarline Onwuemenyi
10 June 2017, Sweetcrude, Abuja – Reactions have continued to trail the passage of the Petroleum Industry Governance Bill, PIGB, as stakeholders refer to the bill as a right direction to recover the industry’s past glory. Recall that after 17 years of attempts, the Senate had two weeks ago approved the passage of the PIGB, which had created much debate and tension across the industry, oil producing communities and the nation at large even as the House of Representatives is expected to pass its own version of the bill soon.
Speaking on the rational for the passage of the Bill, the Chairman, Senate Committee on Petroleum (Upstream), Sen. Tayo Alasoadura, in a recent interview with our correspondent, said the Petroleum Industry Governance Bill held immense benefits for all Nigerians.
Sen. Alasoadura remarked that the Bill would help to create more jobs for Nigerians, and foster an environment conducive for business for petroleum operations when made law. “Under the PIGB, it would become illegal to employ foreigners for certain skills that could be sourced locally. Where such skills are sourced abroad due to unavailability locally, it will be mandatory for Nigerians to understudy such individual.”
He explained that the PIGB would enhance exploitation and exploration of petroleum resources in the country for the benefit of all Nigerians, adding that it would also increase power generation and industrial development capacity of Nigeria through abundant domestic gas supply. He said the law would also create profit-driven oil entities, encourage investment in the nation’s petroleum industry and greatly increase government’s revenue.
“Government revenue from oil industry will increase. This means more funds in the hands of government to engage in developmental activities. “The downstream sector will become fully deregulated. In other words, the subsidy will be totally removed,” he said.
Alasoadura also said the bill would bring about full deregulated and liberalized downstream petroleum sector, create efficient and effective regulatory agencies and promote the development of Nigerian local content in the oil industry. Besides, he said, the emphasis on local content would not only be in the area of skills but would also be applicable to materials sourcing.
According to hum, “This means more jobs for Nigerian local contractors, especially those from the oil producing regions. The PIGB vests ownership and management of all petroleum resources, offshore or onshore, in the Federal Government of Nigeria, which is to manage them on behalf of all Nigerians. “This means that irrespective of where the oil is found, it belongs to the government of Nigeria. Of course, equity calls for special consideration for localities where the resources are mined.”
Meanwhile, major unions in the oil and gas sector have also described the passage of the PIGB as a welcome development, noting that it will increase the inflow of foreign investment. The unions, including the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) and the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), stressed that the nation’s oil and gas industry was long overdue for reforms, which the bill aims to achieve.
General Secretary of NUPENG, Mr. Joseph Ogbebor, told Sweetcrude Reports that the passage of the bill was long overdue. Ogbebor said that it was a welcome development for the oil and gas sector as the union had been campaigning for the passage of the bill for over 15 years. He said that the bill, if finally passed into law by the president would attract more foreign investors and boost accountability and transparency.
On the unbundling of Nigeria National Petroleum Corporation (NNPC), the NUPENG scribe said that the union would resist any attempt to sack workers without adequate settlement. He advised the Federal Government to be cautious on industrial relation issues and ensure that all labour matters were properly addressed.
On his own part, acting General-Secretary of PENGASSAN, Mr. Lumumba Okugbawa, also noted that the development was a step forward to addressing the issues in the oil and gas sector. Okugbawa said that the bill was part of the entire PIB, adding that it was necessary to pass it to create a law to regulate activities in the industry.
Furthermore, the leadership of Independent Petroleum Marketers Association of Nigeria, IPMAN, commended the 8th Senate for speedy passage of PIGB. Reacting to the passage of the bill, the National President, IPMAN, Mr. Sanusi Fari, stated that, “It is very commendable for the Senate to have passed the PIGB in less than two years of inauguration. This bill has spent over 10 years with the past Assemblies but with no success. It shows that Senate President, Senator Bukola Saraki, Chairman, Joint Committee on PIGB, Senator Tayo Alasoadura, and other Senators should be commended for a job well done.”
Fari also urged the House of Representatives to do the needful by harmonizing the PIGB for onward transmission to the Acting President, Prof. Yemi Osinbajo to append his signature. According to him, “You know that before a bill becomes law, the two chambers (both Senate and House of Representatives) must harmonize a bill before the President can sign it into law. We hereby call on the House of Representatives, because they were duly represented in the Joint Committee, to ensure quick harmonization of the bill so that the Acting President can sign it into law.”
Also speaking, the National Deputy President, IPMAN, Dr. Kola Adewoyin, stated that passing the PIGB is very important in attracting foreign direct investment into the oil and gas sector. “The Senate must commence in earnest, the process of passing the other parts of the old PIB which was split into four. Recall that the old PIB was split into The PIGB, The Petroleum Fiscal Framework Bill (PFFB); The Petroleum Industry Downstream Administration Bill (PIDAB); The Petroleum Industry Revenue Management Framework Bill (PIRMFB), and the Petroleum Host Community Bill PHCB). The National Assembly will do the nation great favour if these bills could be given speedy consideration.”
Adewoyin also urged the Presidency to ensure full compliance of the PIGB when it finally becomes law. “Enforcing compliance by the Presidency is also very important and the government must ensure all stakeholders comply with the bill when it becomes law. There is also the need for the National Assembly and the Presidency to always engage IPMAN when formulating policies that affects the oil and gas sector, considering our role in the industry.
“As at today, we control over 90 per cent of the downstream sector which is very critical in maintaining and sustaining healthy business environment for both local and foreign investors. We have become a major stakeholder and we will continue to invest more in the industry to further complement the ‘Change Agenda’ of President Muhammadu Buhari,” he stated.
Also reacting to the passage of the PIGB, the Council Chairman, Society of Petroleum Engineers (SPE) Nigeria, Mr. Saka Matemilola, said the passage of the PIGB is a step in the right direction. He stated: “The industry is also eagerly awaiting the passage of the fiscal policy bill. That is what will ultimately quell the lingering uncertainty that has negatively affected the decision on new investments by most of the major IOCs (International Oil Companies).”
He argued, however, that the PIGB is by no means a magic wand that will solve the many problems facing the petroleum industry, adding that it would be unrealistic to expect the bill as passed, to satisfy all stakeholders.
Nevertheless, he stated, “starting with passage of the governance bill was a good decision and hopefully, the momentum will be sustained to ensure the other bills are similarly passed quite soon. Beyond passage of the PIGB, it is important that the proposed restructuring is carried out in the true spirit of the bill, ensuring that personal interests are not allowed to determine or derail the implementation. This is the only way that the country can derive the desired benefits.”
For Chairman, Petroleum Technology Association of Nigeria, PETAN, Mr. Bank-Anthony Okoroafor, PIGB is an Act to provide for the governance and institutional framework for the petroleum industry and for other related matters. His words: “The bill shows that for once there is light on the other side of the tunnel. This PIBG bill is an Act to provide for the governance and institutional framework for the petroleum industry and for other related matters.
“We need the governance bill to set up the framework for the following as stated in the governance bill document – Create efficient and effective governing institutions with clear and separate roles, establish a framework for the creation of commercially oriented and profit driven entities, promote transparency and accountability and finally foster a conducive business environment.”
Also commenting on the bill, former Chairman of the Petroleum Technology Association of Nigeria, PETAN, Engr. Emeka Ene, said, “Passing the PIB is very welcome news for the industry primarily because, it aligns policy and regulations and updates the legislation to reflect the realities of the oil business in the 21st century. “The impact of the PIB will depend on what exactly was passed. The fiscal aspects will drive new projects, particularly in deepwater. The structural aspects will improve efficiency.”
However, it has not only been praises and commendations for the passage of the PIB. Several groups, notably from the Niger Delta region, have condemned aspects of the bill, as well as the non-inclusion of others.
For instance, the Ijaw Youths Council, IYC, said it “rejected in totality” the PIGB, describing it as insensitive. The group noted that passing such version of the Petroleum Industry Bill, PIB, which failed to provide special funds for oil-producing communities would not guarantee peace in the Niger Delta region.
The IYC in a statement signed by its spokesperson, Mr. Henry Iyalla, said the PIGB is a calculated move aimed at making laws for the smooth governance of exploitation and exploration of the Niger Delta region against the interest of the people.
Iyalla said passing such version of the PIB portrayed members of the Senate as insensitive lawmakers, even as he insited that the only PIB that would ensure peace in the region and calm frayed nerves must include the Petroleum Host Communities Fund Act.
According to the statement, “We condemn the show of insensitivity by the Nigerian Senate on the recent passage of the Petroleum Industry Governance Bill, PIGB, which makes it clear that the only interest the government has in the Niger Delta Region is control of her oil.
“It is unfortunate that at a time when we expect the Government to show commitment in the development of the region we have to contend with the celebration of an ill-conceived idea to divide the Petroleum Industry Bill into greed-driven mushroom bits.”
IYC in the statement also said all relevant arms of Government ought to know that the singular passage of the PIGB will not deliver the full benefits of the intended reforms except the other aspects of the Petroleum Industry Bill are legislated upon.
The Ijaw group said only the Petroleum Host Community Act would give the Niger Delta people a stake in the industry and provide avenues to alleviate the suffering of the people in the region adding that without such funds any governance structure put in place in the region would fail.
“It must be stated that for oil and gas related activities to operate smoothly within the Niger Delta Region, the National Assembly saddled with the responsibility of law-making should immediately take further steps for the quick passage of the Host Community Bill. This is to guarantee 10% of the net profit of upstream oil companies on both onshore areas and offshore shallow areas to the community.
“Otherwise, the Niger Delta would see the recent passage of the PIGB as a calculated move aimed at making laws for the smooth governance of exploitation and exploration of the abundant oil reserve within the region without any consideration to host communities. The Ijaw Youth Council would not be part of a divide and rule method of governance within the oil and gas operations in the region,” it stated.
According to the group, the passage of the complete Petroleum Industry Bill (PIB) is the only guarantee for a smooth and conducive operational environment in the Niger Delta, as the people of the region cannot guarantee conducive operational base without the protection of their interest.
Another group, the Ndokwa National Youth Movement, NNYM, has condemned the removal of the host community development funds from the Petroleum Industry Governance Bill, PIGB, passed by the Senate, describing it as anti-Niger Delta and a slap on the face of oil bearing communities in the region.
NNYM, in a statement by its National Secretary, Presley Idi, lamented the silence on the enforcement of the Local Content Act in the bill, saying its passage “has further confirmed our belief that Nigeria hates anything that concerns the Niger Delta.
“How can we explain the removal of funds that were supposed to be set aside for the development of our communities that are being devastated and left in ruins by oil exploration and production, with the effect lasting for generations. Is this not the height of wickedness and to think that we also have legislators from the region who are part of the Senate is only making us feel worthless,” it noted in a statement made available to Sweetcrude Reports.
The group added that, “The 10 per cent of whatever these companies make that was earlier earmarked to be set aside for the development of the host communities is nothing compared to the sufferings our people go through on a daily basis, the health risks, the environmental hazards, the water pollution, and the many other crisis arising from their presence in our communities. So the host community development funds and the total implementation of the Local Content Act are the minimum our people deserve.
“There is nothing worth celebrating. So, anyone, especially those from the Niger Delta, jumping up in excitement that this bill has been passed, should know that they are only rejoicing that our people have been pushed deeper into bondage,” it said. “If truly this All Progressives Congress, APC government is interested in securing lasting peace in the region, the bill should be redrafted with a very clear provision made for both the Host Community Development Funds and the Local Content Act.”
Representatives of the Ijaw nation have described the Senate’s passage of the Petroleum Industry Governance Bill, PIGB, as a display of government disregard for oil host communities. Ijaw nation which made the observation through the Izon-Ebe Oil and Gas Producing Communities Association, IOGPCA, in Warri, Delta State, said, the PIGB as passed by the Senate is a direct opposite of the original Petroleum Industry Bill, PIB.
The Ijaw body stated: “In the original PIB, 2% was set aside for host communities. Surprisingly, it was removed from the PIGB. On composition of governing board, no reference was made to host communities, but that it will be composed by the President. Clear concession would have been accorded host communities.”
Referring the 8th Senate to Ijaw National Congress’s recommendations to the 6th and 7th senates during past public hearings in the days of the PIB, the Ijaws called on the current Senate to immediately commence re-amendment of the PIGB to reflect host communities interests.
On his part, national president of the Foundation for Human Rights And Anti-Corruption Crusade, FHRACC, Mr. Alaowei Cleric, has described the passage of the PIGB as a rude shock to indignes of the oil-rich Niger Delta region. He said, “The passage of the long awaited Petroleum Industry Bill into law by the Senate was a rude shock to us. After carefully reading the Act as passed by the upper legislative chamber, we found out that the Niger Delta region, or rather the oil producing communities, have no place in the Act.”
According to Cleric in a recent interview, “The Senate has indeed made good its vexatious and incisive plan to remove the host communities’ funds, otherwise known as the 10 percent equity shares for the oil bearing communities from the bill. What else do the oil communities have to celebrate the Act when their interest is not protected? The Act as passed, to us, is not different from the existing obnoxious, draconian and inimical laws that governed the petroleum industry.”
He added that new Petroleum Industry Governance Act is still enacted to colonize the Niger Delta people for the Federal Government to continue plunder the region. “The ecologically bastardized and degraded communities in the region have no hope of assuaging their sufferings in the Act. Why must we celebrate a law that designed to keep us in perpetual attrition in midst of vast oil wealth?
“Will the new Act curb the coastal erosions that have been ravaging Okerenkoko, Ogidigben, Sokebulou, Ogulagha, Agge, Ezetu, Bilabiri, Ekeni, Furupa, Akassa, Brass, Nembe City, Bonny and other numerous coastal communities in the Niger Delta region? The answer is definitely no. The 10 percent host communities’ fund was the main trust of the bill. Now that the upper legislative chamber has ungraciously removed it, then the purpose of the bill is defeated.
“The bill as proposed by late President Yar’Adua in 2008 was primarily to address the apathy of oil governance in the Niger Delta region. That was the reason why 10 percent equity shares were voted for the oil communities. We are not concerned about the merger of agencies under the NNPC as such cannot address the problems of the environmental degradation and despoliation as well as the economic deprivation and marginalisation of the oil producing communities.
“What the Senate has done is to stoke the flame of discord between the region and the Federal Government. We will not accept the Act as passed by the upper chamber. We are calling on the House of Representatives to reject the Senate version since its own version has incorporated the much talked host communities funds. No host communities funds, no Petroleum Industry Act,” the group added.
