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Between the European Super League and Nigeria’s PIB

It is remarkable watching the indignation unfold and at the same time drawing parallels between this and Nigeria’s Petroleum Industry Bill, which like the Super…

‘May you live in interesting times,’ they say.

If there were a time this expression of questionable origin has manifested, it would be the last one week with all its attendant drama and hallmark happenings. There have been several exciting news events this week already. Idriss Deby, Chad’s longtime warrior ruler, was killed at the frontline defending his country; Derek Chauvin was convicted of the murder of George Floyd; and the regulars from Nigeria—bandits overrunning a military facility in Niger State, bandits here, terrorist there and the Pantami revelation.

The one that has dominated international news the most since Sunday has been the furore over the creation of a European Super League. There is a lot to romanticise about this story—there is rebellion, there is greed, there is resistance and it may just well end, with the will of the people (or the football fans) prevailing. As I write, the Super League has become the ‘Shrunken League’ with only two of the twelve founding member clubs still standing. The others have all been forced to withdraw by the outrage of their supporters.

It is remarkable watching the indignation unfold and at the same time drawing parallels between this and Nigeria’s Petroleum Industry Bill, which like the Super League is playing in the field of big money.

In Nigeria at least, no two issues generate as much heat as football and oil politics or more precisely the politics of oil money. That is why it is somewhat surprising that the PIB has not generated as much clamour as the Super League has.

Nigeria has been one of the largest suppliers of crude oil in Africa. Its daily production of 1.9 billion barrels per day places it at 15th on the list of the world’s oil producers. The country’s target apparently is to produce four million barrels per day in the nearest future.

Yet, 85 per cent of the oil production is exported. The enormous wealth which accrued from this has unfortunately not translated into significant national development. Those whose business it is to know such things say it is because of insufficient governance, weak sector regulation and inefficiencies in oil operations, among other things. This has created an uncertain investment climate that has resulted in declining investment, incessant fuel shortage and insecurity. And this, they say, is why the Petroleum Industry Bill (PIB) is necessary.

True, the 1969 Petroleum Act has run its course but after 20 years of back and forth over the PIB in its various iterations, we have arrived at a point where the bill now provides for the unbundling of the sector. The bill seeks to establish a dual regulator model, which in essence, could be equated to creating a Super League of sorts in an attempt to make the Champions League obsolete.

To regulate the industry, the bill seeks to establish the Nigerian Upstream Regulatory Commission (the Commission), which will regulate upstream petroleum operations, in other words, exploration and production. The Nigerian Midstream and Downstream Petroleum Regulatory Authority (the Authority) will regulate what its nomenclature suggests—in essence, that means transportation, storage, and wholesale marketing of crude or refined petroleum products.

This will subsume the functions of the Department of Petroleum Resources and the Petroleum Product Pricing and Regulatory Agency.

This dual regulator model suggests that perhaps Nigeria has learnt nothing from divesting its Police Force. The creation of other paramilitaries, such as the National Security and Civil Defence Corps, the Federal Road Safety Corps and others to replicate and perform some of the functions the police should be performing only further weakened the force, leaving the husk of it to crumble into the weak monstrosity we have been left with today.

The solution to a faltering institution is not always to carve out new institutions from it to duplicate its responsibility but to strengthen that institution with the needed resources, manpower and training and improving the laws that establish it so it may perform its functions better.

But Nigeria being Nigeria where governance by committee has become a deeply entrenched culture, it is understandable that this idea would fly. This way, some people will profit from the establishment of this commission and that authority.

One would have thought it would have been more reasonable to create a single regulatory agency to combine the upstream, midstream and downstream, to improve harmony and streamline operations thereby cutting administrative cost.

But this is Nigeria and we often need various committees to work on the same project, postulate over its execution and quibble over who has the right to execute the project before spectacularly failing to accomplish it.

The same situation applies to the continued relevance of the Niger Delta Development Commission (NDDC), that veritable cash cow of a few government appointees from the oil-producing region. Monies meant for the development of that region and the restitution for ecological damages inflicted by oil exploration activities often end up in the pockets of officials who are supposed to ensure the communities get their dues. Only last year, a probe into the ludicrous embezzlement gave us that dramatic Pondei fainting moment, which inspired my very first column in this paper.

Today, the NDDC, like its predecessor, the Oil Mineral Producing Areas Commission (OMPADEC), appears to have failed in the discharge of its duties. To get anything done in that region, the oil companies have had to sign and implement Global Memoranda of Understanding (GMoU) with their host communities to allow them to operate in return for some level of development for these communities.

Despite the existence of the Ministry of the Niger Delta, and the NDDC, the PIB is proposing the creation of the Host Community Fund to which operators will contribute 2.5 per cent of their operating costs incurred in the preceding year.

Of the three per cent of their annual budget these companies already contribute to the NDDC, the PIB has said nothing.

I would think it would have been more reasonable to enforce regulations that would ensure the NDDC is doing what it was established to achieve, arrest and prosecute those who divert the funds rather than establishing yet another agency to perform more or less the same function.

Then there is the issue of the incorporation of NNPC Limited, which will take ownership of rights to gas and petroleum production. If the assumption that the NNPC as a limited liability company will be more efficient and profit-driven, like successful state-owned oil companies around the world such as Petronas and Equinor, it would appear those behind the bill have forgotten a crucial fact. Without the establishment of strong performance culture, and entrenchment of good corporate governance and best practices, and essentially a comprehensive change of mindset, this exercise would only amount to a change of nomenclature and a continuation of business as usual, especially since all equities of NNPC Ltd will be wholly owned by the government.

I admit all of these duplications, repetitions, control delete and control Z Nigeria has been doing over the years, especially with the PIB, is enough to do one’s head in.

For the average Nigerian, the technicality is confusing, which explains the ambivalence of most Nigerians, perhaps except for those from the Niger Delta who resorted to a free-for-all bar brawl at the National Assembly during the PIB public hearing earlier this year.

When considered carefully, this PIB and its duplicity of roles and the many questions it raises might just be the equivalent of creating a Super League. It will make the rich super-rich and not do much for the poor.

Regarding the Super League debacle, FC Barcelona defender Gerard Pique summed up the argument succinctly in a Twitter Post: “Football belongs to the fans. Today more than ever.”

About the PIB, I will paraphrase: Natural resources belong to the people. Today more than ever.

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