Reforms in oil & gas dangling, await Buhari’s pledge on PIB

As part of the “change” mantra stressed in their 2015 campaigns, President Muhammadu Buhari and his party promised far-reaching reforms in the oil and gas sector.

They particularly pledged speedy passage of the Petroleum Industry Bill (PIB) which had seen a 17-year delay.

The promised PIB is supposed to improve transparency, attract investors, stimulate growth and increase government revenues. Five years on, this has remained a promise.

The bill was split into four parts during the first four-year term of the administration, but none saw the light of day.

Although one part of the PIB – the Petroleum Industry and Governance Bill (PIGB) – went close to being signed into law after it was passed in 2018, it was eventually denied assent by the president.

On the back of the feats recorded in the oil and gas sector 2019 such as the Amendment of the Deep Offshore (and Inland Basin Production Sharing Contact) Act, signing of the Final Investment Decision (FID) on the Nigeria LNG Train 7 project, as well as the discovery of crude oil in the North, President Buhari who doubles as the Minister of Petroleum Resources, set the tone for the development of the industry in 2020 through his Minister of State, Timipre Sylva, announced the government’s plans to pass the PIB by the middle of 2020.

The minister had said the team working on the PIB was at the final stage of the harmonisation of all the existing versions from 2000 to date (2009, 2012, and 2018) with consideration to the concerns raised by the industry players.

Counting on the current harmony between the executive and legislative, Sylva said at a press briefing early February, 2020, that the Federal Government was optimistic that the PIB would be passed within the first anniversary of the administration, but this has not been done so far.

Sylva recently insisted that work had been concluded on the PIB and that the petroleum ministry was on the verge of presenting the bill to the president and the Federal Executive Council (FEC) for approval before presenting it to the National Assembly.

This followed calls by a consortium of Civil Society Organisations (CSOs) seeking the reform of the oil and gas industry. They called on the Federal Government to conclude work on the PIB to mitigate the impact of the outbreak of the COVID-19 pandemic and the resultant shocks on the global economy and crude oil prices at the international market.

A former Minister of State for Petroleum, Ibe Kachikwu, said Nigeria lost investments as much as $15bn yearly due to the delay in the passage of the PIB, which also means the losses may rise in the aftermath of COVID-19.

The CSOs: Civil Society Legislative Advocacy Centre (CISLAC), BudgIT, Centre for the Study of the Economies of Africa (CSEA), Nigeria Natural Resource Charter (NNRC), OrderPaper Advocacy Initiative, Women in Extractives (WIE), Connected Development (CODE), Centre for Transparency Advocacy (CTA) and seven others, in a joint statement after a virtual meeting to appraise the effects of recent events and the implications on the Nigerian petroleum industry, said while the conclusion of work on the PIB was being awaited, the government should  take steps to delineate the roles of policy formulation, regulation and enforcement, as well as operations in the industry.

The CSOs said, “We suggest policy directions should be left under the purview of the Minister of Petroleum Resources, with the presidency and Minister of Petroleum Resources and Minister of State for Petroleum Resources lending their support to the declarations by the GMD of NNPC to give weight and establish trust between the government and the people.”