- Oil rig platform in the Niger Delta
After several futile attempts to pass the Petroleum Industry Bill (PIB), into law to no avail, stakeholders have taken the blessed assurances given by the Minister of State for Petroleum Resources, Timipre Sylva of a possible passage of the bill in the first quarter of 2021 with a pinch of salt, arguing that the takeoff date may not materialise after all. Ibrahim Apekhade Yusuf in this report examines the issues
Is there any hope for a woman who has suffered stillbirths for over 20 years with every prospect for childbearing getting dimmer at every attempt?
The foregoing anecdote becomes apposite in describing what has been the fate of the much hyped Petroleum Industry Bill (PIB).
Is the PIB ill-fated?
To say the passage of the PIB has lingered for nearly 20 years is stating the obvious. Since the idea of the PIB was first mooted by the Olusegun Obasanjo administration (1999-2007), it has survived two legislative circles.
According to economic pundits, the passage of the bill, which would have paved the way for massive investment in the country’s oil and gas sector, has remained bottled up in the National Assembly with successive leadership of the legislature making efforts, with the accompanying horse-trading, to attempt a passage of the bill.
Lamentably, even when some Assembly sessions passed the bill, the Presidency had been variously arm-twisted to withhold assent, thus making the PIB remains the oldest bill in the National Assembly since 1999.
In the view of analysts, the best and latest effort made so far in the passage of the bill has been that of the 8th National Assembly, under the leadership of Senator Bukola Saraki and Hon. Yakubu Dogara which, in the quest to make the passage easier and less contentious, broke it down into four different components, namely; the Petroleum Industry Governance Bill (PIGB), the Petroleum Industry Administration Bill (PIAB), the Petroleum Industry Fiscal Bill (PIFB) and the Petroleum Host and Impacted Communities Bill (PHICB).
nfortunately, only the PIGB was passed by the Nigerian Senate in May 2017 and the House of Representatives in January 2018, but was subsequently rejected by the Presidency.
The Petroleum Industry Governance Bill (PIGB) originally seeks to establish a framework for the creation of commercially, oriented and profit-driven petroleum entities, to ensure value addition and internationalisation of the petroleum industry, through the creation of efficient and effective governing institutions with clear and separate roles for the petroleum industry.
The new PIB will have two regulators, one for the upstream and the other for the midstream and downstream sectors of the industry.
NASS to the rescue
In the opinion of the Minister of State for Petroleum Resources, Timipre Sylva, at the centre of the actualisation of the passage of the PIB is the role of the National Assembly.
Bearing any last minute hitch, the PIB may be passed into law in the first quarter of 2021, the minister emphasised.
The minister, who was giving an update on the status of the PIB currently undergoing legislative processes in the National Assembly, recently, revealed that the government was happy with the pace of work by the legislators on the document.
“The PIB is out of the executive’s hand right now. We completed our own part by drafting the Bill. It is currently with the National Assembly. The process has already passed the second reading in the Senate. They have sent the draft to the relevant Committees for consideration.
“The House of Representatives would take up from there and look at it next week. We are expecting that both Chambers would go through the committee stages by the first quarter of next year and pass it into law.
“I am not saying categorically and conclusively that the PIB will be passed then. But, what I am saying is that from the pace of work we can see the National Assembly working so far, everything being equal, we are projecting that the PIB will be passed latest by the first quarter of 2021,” he said.
The minister said everything depends on the pace of the legislative process by the National Assembly, noting that if the two chambers of the National Assembly could pass second readings and hold public hearings, there is high optimism that it could be passed within the first quarter of next year.
He said the government has been engaging the leadership of the National Assembly on the matter, adding that the outcome of that engagement was very encouraging.
“Everybody concerned feel this is the best time to get the PIB passed to stimulate progress in the oil and gas industry. The passage of the PIB will involve a lot. But, we believe that will actually be a major foundation to move the petroleum industry forward from where it is at the moment.
“Since the beginning of the oil industry in Nigeria in the 1950s, this is the first major rehabilitation process being undertaken by any administration in the oil industry. There is no doubt that the PIB will help resolve some of the knotty issues that constituted the contradictions in the industry all these years. When all these issues are smoothened out, it would have laid a solid foundation for the growth of the petroleum industry,” he said.
LCCI making a case for PIB
To enjoy a chunk of investment flow into Africa, the Lagos Chamber of Commerce and Industry (LCCI), has impressed on the federal government the need to step up efforts to actualise the implementation of the Petroleum Industry Bill (PIB)
According to the chamber, the proposed legislation should seek to protect existing investments from value erosion, noting that assets and operations therefrom were the foundation upon which new projects could be built.
Minister of State, Petroleum, Chief Timipre Sylva
It also acknowledged that the bill mandates that Ministries, Departments and Agencies (MDAs) consult with the commission prior to introducing overlapping legislation which will impact the oil and gas industry, allows for consultation with industry stakeholders before making regulations and commercialisation of NNPC to improve business efficiency and effectiveness, especially in relation to joint venture activities
The chamber, however, noted that some of these improvements appear insufficient to deliver the true value which the bill aims to achieve.
Director General of the chamber, Dr. Muda Yusuf, who stated this recently, explained that Nigeria, with the largest oil and gas reserves in Africa, has huge untapped potential to achieve its economic development goals including gas-to-power ambitions.
He said despite having the largest reserves in Africa, the country only received four per cent ($3 billion) of $75 billion invested on the continent between 2015 and 2019, which underscores the need to create a competitive environment to attract investment to the oil and gas sector.
The Lagos chamber urged the National Assembly to put in place a law that would promote a more effective and efficient governance, administration, host community development and fiscal framework for the petroleum industry.
“A competitive bill would help preserve the integrity of the existing projects and also encourage future growth of production and make Nigeria an investment destination of choice.”
The LCCI boss, while noting that some sections of the bill were harmful to the growth of industries, said the deepwater provisions do not provide a favourable environment for future investments and initiation of new projects, saying the PIB should grant new deepwater oil projects full royalty relief during the first five years of production and should outlaw Hydrocarbon Tax (HT) since companies will still be subject to CITA.
IOCs and local conspiracies
There are several conspiracy theories been pushed at different quarters about the complicity of some influential multinational oil companies (IOCs) working in connivance with their local partners to put all measures in place to thwart efforts to get the PIB passed into law.
While reacting to Commenting While reacting to insinuation that the PIB did not see the light of the day because of the interference of the IOC’s, Prof. Adeola Adenikinju said such allegation is not at all surprising.
According to him, “Whether the IOC’s are influencing the passage of the bill, and as an interested party, they have to push to ensure that it favours them. But the National Assembly are the representative of the people, so it is mandatory for the National Assembly to ensure that what comes out it is to the benefit of the Nigerian people whom they are representing. No matter how much influence the IOC’S have, it is expedient on the NASS to protect the interest of the people.”
Adenikinju, who is the former President of the Nigeria Association for Energy Economics and currently the Director, Centre for Petroleum, Energy Economics and Law (CPEEL), a MacArthur Foundation Regional Centre of Excellence at the University of Ibadan that provides training, research and consultancy on all aspects of energy, said, “If the PIB is not passed and signed into law this year, it will be a big shame on Nigeria. It was passed initially, but the Executive complained and now that the Executive presented this, it will be suicidal and very disastrous for the economy.”
