The outbreak of fisticuffs last week during the public hearing on the Petroleum Industry Bill (PIB) at the House of Representatives offered a cursory glimpse into the hurdles that stalled the bill’s passage since introduction 12 years ago.
It exposed the various socioeconomic and political interests which characterised the opposition to the bill on one hand and support for it on the other.
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Successive National Assemblies had made frantic efforts to get the bill passed and assented to but failed. No wonder, the Senate President Ahmad Lawan likened it to a “demon”.
“The PIB is like a demon,” Lawan said in a speech delivered when members of the Senate Press Corps paid him a visit to mark the occasion of his 62nd birthday celebration in Abuja.
The metaphorical demons, if the words of the Senate President are anything to go by, are foreign forces and their local collaborators working desperately to frustrate the consideration and passage of the bill.
“There are people both inside and outside the country, who would work against it, but it is going to take the strength of our patriotism to pass it,” he said.
The oil and gas reforms began in April 2000 when the then President Olusegun Obasanjo inaugurated the Oil and Gas Reform Implementation Committee.
The work of the reform committee culminated into the Petroleum Industry Bill which was transmitted to the 6th Senate in September, 2008 and since then, it had suffered series of setbacks.
It came closer to passage in the 8th Assembly but suffered the same fate as its passage was jettisoned in the twilight of the life of the 8th Assembly.
Again, the Muhammadu Buhari’s administration presented the PIB to the National Assembly.
The bill, among other things, seeks to scrap the Petroleum Equalisation Fund (PEF) and Petroleum Products Pricing Regulatory Agency (PPPRA).
It proposed the creation of a new agency to be called Nigerian Midstream and Downstream Regulatory Authority (NMDRA) as a replacement.
The new agency shall be responsible for technical and commercial regulations regarding operations in midstream and downstream petroleum sectors of Nigeria’s oil industry.
It is also seeking to establish another agency, the Nigerian Upstream Regulatory Commission which will be responsible for technical and commercial regulations in the upstream petroleum operations.
The bill also proposes that the Nigerian National Petroleum Corporation (NNPC) should be incorporated as a commercial entity under the Companies and Allied Matters Act by the Minister of petroleum and renamed Nigerian National Petroleum Company (NNPC)
9th NASS picks the gauntlet
The ninth National Assembly had, on several occasions, vowed to defeat the ‘demons’ frustrating the passage and presidential assent to the PIB this year.
The Senate President said it took the firm resolve of the National Assembly to pass the Deep Offshore and Inland Basin Production Sharing Contract Bill in 2019. The same approach, he said, would be deployed for the consideration and eventual passage of the Petroleum Industry Bill (PIB).
“The patriotic zeal, sheer determination and unity of purpose by all serving senators across party lines to do this latest by the end of first quarter of this year, will be deployed on the bill immediately the Senate resumes the way it did with Deep Offshore Oil Production Sharing Contracts”, Lawan said.
Also, the Speaker, Rep. Femi Gbajabiamila had in an opening remark at the public hearing on Wednesday assured that the Bill passage won’t be delayed.
“More importantly, we intend to pass this Bill by April. That is a commitment we have made. Some may call it a tall order, but we will do it and we will do it with every sense of responsibility without compromising the thoroughness of the work that will be done,” he said.
The stakeholders’ stance
The public hearings held by the two chambers of the National Assembly exposed the intricacies involved in the reforms sought by the PIB which go beyond the economic and administrative aspects.
While the major oil industry players expressed their concerns with the regulations that will open up the sector to make it competitive, oil producing states and communities are eyeing more largesse from what they are getting as the PIB open doors for increased revenues.
On their parts, environmental activists want the authorities to clear the mess created by oil activities and possibly compensate losses suffered by the communities affected as well as raise their stakes to become a part of the lucrative enterprise.
Other stakeholders also gave their stance on the provision of the bill to promote or protect their interests.
Oil Producing Trade Section (OPTS) and other stakeholders expressed concern over some clauses in the Petroleum Industry Bill (PIB) that are not favourable for competitiveness and investments.
The OPTS is a group comprising of 30 indigenous and international players in the Nigerian oil industry responsible for about 90% of the total oil and gas production in Nigeria.
Making a submission on behalf of other members at the two-day public hearing held by the House, OPTS chairman, Mike Sangster said, they were not satisfied with some sections of proposed amendment in the PIB.
He said some of the PIB provisions did not provide a favourable environment for future investments and for the launching of new projects.
Sangster suggested that the PIB should grant deepwater oil projects a full royalty relief during the first five years of production or a graduated royalty scheme as detailed in their submission.
He said that will encourage investors to finance deepwater projects.
Similarly, Deputy Managing Director, Deepwater Assets, Total Upstream Companies, Victor Bandele said, some versions of the PIB have negatively affected investors’ sentiment.
He said the current PIB should reverse this trend and be forward looking as the global energy transition is shifting investment away from fossil fuels and into renewables and Iow-carbon sources.
NNPC, FIRS optimistic
On his part, the Minister of State for Petroleum Resources, Timipre Sylva commended the senate and the House of Representatives for their commitment and tenacity towards the bill 20 years after its introduction to the National Assembly.
Similarly, the Group Managing Director, (GMD), Nigerian National Petroleum Corporation (NNPC), Mele Kyari said the passage of the bill offers a new hope.
He said that, the bill will revolutionalise the oil industry which he said will still be relevant in the next 30 years despite the emergence of alternative energy sources.
According to him, it will bring the needed transparency and competitiveness that would enhance productivity and investment in the petroleum industry.
In his presentation, the Chairman, Federal Inland Revenue Service (FIRS), Mohammed Nami said the bill when passed into law will promote economic growth and make the petroleum sector competitive.
“FIRS is in total support to develop the oil and gas industry in line with the international best practices”, he said.
RMAFC, Finance Ministry concerned
While making their presentations at the hearing on Thursday, the Chairman, Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC), Elias Mbam and the Minister of State for Finance, Budget and National Planning, Clement Agba made observations on the implications of the Bill on government revenues and finances.
Mbam said some provisions in the PIB may reduce or in some instances cut revenue inflows to the federal government.
On his part, the Minister of State for Finance, Budget and National Planning, Clement Agba warned against losing tomorrow’s future for today’s gains.
Oil producing communities want more stakes
The Host Communities (HOSTCOM) producing oil and gas is set for showdown with the federal government over equity shares.
While the federal government in the bill is proposing 2.5% share for the Host Communities (HOSTCOM), leaders from the various communities are kicking against it, insisting on 10% equity participation as share holding.
HOSTCOM president, High Chief Benjamin Style Tamaranebi declared that an offer of 10 percent equity shares to the host communities in the Petroleum Industry Bill PIB would bring lasting peace to troubled oil and gas producing communities.
“So, we want to be part and parcel of it. Let us be shareholders in the industry. That will guarantee security in our local communities that are producing oil and gas,” he said.
CSOs in the PIB fray
Speaking on behalf of a coalition of Civil Society Organisations (CSOs), the Program Officer, Democracy and Governance, Prince Edegbuo said, the PIB as it is, will promote environmental impunity in the oil industry and “exacerbate social dislocation in the oil bearing communities in the Niger Delta”.
“We are concerned that, the National Assembly has not allowed a fair hearing and adequate opportunity for vulnerable stakeholders to have a say in the legislative process towards passing the PIB,” he said.
Leader of Niger Delta Dialogue, the think tank of the Pan Niger Delta Elders Forum (PANDEF), Barrister Inibehe Effiong faulted the PIB saying that, it did not clearly define “host communities”.
“This is unacceptable and we will continue to demand that if this so called host fund that they want to provide for is going to translate into anything, there has to be a significant conversation with the people of the region,” he said.
With the limited time frame and the intricacies involved, it seems the 9th Assembly has an enormous task for the PIB to be passed.
Whether their efforts and determination will surmount the intricacies of the interests involved as the first quarter approaches, all eyes will be on what comes out after the public hearing when the lawmakers return from their recess and what transpired afterwards.
