- Petroleum Act is 50 years old – Expert
The law in operation for the oil sector in Nigeria, Africa’s biggest exporter of crude, is outdated, National Coordinator of Publish What You Pay in Nigeria, Peter Egbule, has said.
He said this in a document, noting that while the global oil sector is being driven by latest technology, the Petroleum Act in use for the sector in Nigeria is 50 year old and this is worsening investment deficit rocking the country.
This and the Illicit Finance Flows (IFFs) are making the country to lose multi-million dollars in FDI.
Governance, he said, is a continuum. “It is one thing to proclaim an interest and another thing to follow it through to ensure that punitive measures are put in place,” he said.
“For the past 20 years, there have been arguments surrounding the Petroleum Industry Bill, which has been divided into four and the four of them have different aspects that need to be controlled within the oil and gas sector. But what we have is an important sector being loosely regulated. The current Petroleum Act is as old as 50 years and we all know that the dynamics then are not same with what we have now, just as the pricing and interests are not the same.”
The energy dynamic across the globe is, according to him, changing by the day, and the mainstay of Nigeria’s economy is oil and gas.
“The question is, what measures are we taking to tackle corruption in the sector? You then have a policy that guides investment and revenue disbursement,” he said.
“The NEITI report indicting NNPC was carried over from 2015 to the 2016 report. NNPC received royalties from the NLNG, which is close to $15b.
“And the law says that the NNPC is operating on behalf of the equity of the Federal Government. Now, the NNPC received on behalf of the Federal Government and decided to spend un-appropriated funds on behalf of the Federal Government without remitting into the Federation Account.
“This is happening because there are no consequences and I believe that some people are benefitting from this dysfunctional situation.”
On the implications of IFFs on our economy, he said: “Financially, we are bleeding to death, as funds that should be used to develop the country are slowly being moved out of this country.”
Beyond that, he said there is lack of confidence on the part of investors.
“Genuine investors would want to invest in a country where they can monitor their transactions; where they think that their money is safe, and where they are policies and institutions that would hold people accountable in the event of defaults.
“So, all these are pointers that the economy is not secure and safe for them to invest in. So, we are losing Foreign Direct Investment (FDI) because of IFF.”
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