The House of Representatives, last week, held a public hearing on the Petroleum Industry Bill (PIB) promising to pass the proposed legislation in spite of obvious obstacles. PHILIP NYAM reviews proceedings at the event
The House of Representatives ad hoc committee on the Petroleum Industry Bill (PIB) headed by the Chief Whip, Hon. Mohammed Monguno (APC, Borno) for two days last week conducted a public hearing to aggregate the views of stakeholders and Nigerians on the bill.
The hearing was eventful as participants were given the opportunity to express their views on the proposed legislation. Although, on the second and last day of the exercise, members of the host communities engaged themselves in fisticuffs, the temporary disruption was quickly contained and the hearing eventually ended on a peaceful note.
Declaring open the hearing, Speaker of the House, Hon. Femi Gbajabiamila, vowed that despite the positions of any vested interest, the House of Representatives will ensure that it protects the interest of Nigeria and Nigerians in the Petroleum Industry Bill (PIB). Gbajabiamila added that hough the PIB has been in the National Assembly for decades without much success, the 9th Assembly will ensure that it is passed into law.
The Speaker, who expressed optimism about the process adopted by the House to engage all relevant stakeholders, said he was confident that the Monguno-led ad hoc committee will do a thorough job, promising that the House would do all it can to pass the PIB in April.
He said though it is a national consensus that there should be a comprehensive reform of the oil and gas industry, he bemoaned a situation where “this critical national industry underperforms its potential and our national expectations.”
His words: “For the most part, we all agree on the need for legislative action to make improvements through statutory and regulatory reform. Therefore, it is disappointing and frankly difficult to explain how successive governments have failed to deliver on the promise of reform despite this broad agreement. Ladies and gentlemen, we have an opportunity and an obligation to do better, and we will. “We are not oblivious to the fact of many contending interests in this sector.
These contentions do not need to result in conflict, especially when we know the objective of national prosperity benefits us all. Therefore, the process of engaging with stakeholders will continue beyond this public hearing to accommodate the diversity of interests and ensure all critical views form part of the deliberations that inform the final legislation.
“Regardless of whatever other interests may exist, for this Ad-Hoc Committee and indeed the House of Representatives, Nigeria’s best interest is both our desired outcome and guiding principle. It falls to this Ad- Hoc Committee to engage in a necessary balancing act in the interests of our beloved nation. “This bill has been long coming as the chairman said.
It has been upcoming in the last 20 years. Because of contending and vested interests, we have not been able to reach the desired outcome over the years. A lot of work has gone into the preparation of this Bill, but it’s not straitjacketed.
The idea of a public hearing is to have interests that may have not been accommodated prior to the introduction of the Bill to lend their voices and to understand perhaps the bigger environment where they are coming from.
“So my charge to everyone that will be participating is not to close our minds or our ears to the views and the positions that may be advanced by various interest groups. We are in a world, an economic world, so there must be interest groups, they will be interest groups and we cannot deny that. “But what should guide the outcome of what we do here as we accommodate more views will be what will be in the best interest of the people.
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.”
The Speaker further said the outcome of the bill will determine a lot of things such as the diversification of the economy. According to him, “for you to diversify your economy, you have to invest money, and for you to invest money, the resources you would use to invest and develop your economy, as it is in Nigeria for now comes from the petroleum industry.
Whether you believe in the finite or infiniteness of the product, the point that needs to be made is that we need to derive as much profit for the time when the product is still available. We need to derive as much profit to be able to diversify into other areas.”
He said the bill would provide an opportunity for the country to “meet the obligations owed to the communities that host oil and gas exploration and transportation activities and pay a high environmental price as a consequence.” In his welcome remarks, chairman of the ad hoc committee, Hon. Monguno said the oil and gas industry is very significant to the life of the nation and as such, the House organised the public hearing to enable stakeholders to make their inputs to the bill. He said every contribution would be considered on its merit.
In his keynote address, the Minister of State for Petroleum Resources, Timipre Sylva, expressed joy that after 20 years of its introduction to the National Assembly, both the Senate and the House have shown sustained determination to pass the PIB into law.
Similarly, the Group Managing Director of Nigeria National Petroleum Corporation (NNPC), Mr. Mele Kyari, offered a glimpse of hope, when he declared that oil will still be relevant in the next 30 years. He added that the passage of the bill into law will bring about the needed vigour and transparency that would in turn engender productivity in the petroleum industry.
On his part, 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.
Organised labour was not left out of the show as the Nigerian Labour Congress (NLC) was represented by its President, Comrade Ayuba Wabba just as oil workers were duly represented by the president of Petroleum and Natural Gas Senior Staff Association of Nigeria. (PENGASSAN), who also stood in for Nigeria Union of Petroleum and Natural Gas Workers (NUPENG). The labour unions aligned with most of the provisions in the bill and also declared their support.
They, however, opined that critical stakeholders in the oil and gas industry must be represented in the board of the proposed Nigeria Oil and Gas Commission, saying: “this is against the backdrop of the numerous collective bargaining agreements (CBA) for oil industry remuneration and championed by the industrial Unions affiliates of Congress like NUPENG and PENGASSAN counterpart.”
The Oil Producing Trade Section (OPTS), comprising 30 indigenous and international members that operate about 90 per cent of the total oil and gas production in Nigeria made their presentation through its chairman, Mike Sangster, who expressed concern on the deepwater developments as he complained that the PIB provisions do not provide a favourable environment for future investments and for the launching of new projects.
Sangster suggested that to ensure investors are encouraged to finance Deepwater projects, 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.
In his presentation, Victor Bamidele, Deputy Managing Director of Deepwater Assets, Total Upstream Companies, noted that some versions of the PIB have negatively affected investor sentiment and 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.
Bamidele observed that the governance and administrative reforms in the Bill are far-reaching and ambitious, saying the company’s primary concern is that the fiscal terms in the current Bill are not globally competitive. He also said the deep offshore terms are not competitive as despite lowering the tax rate, the Bill also removes all investment incentives, retains the penalising royalty rates of the Deep Offshore Act and adds significant complexity with a Hydrocarbon Tax that raises little revenue for the Federal Government.
In their various presentations, the oil-producing states also disagreed with some provisions of the bill they feel did not protect their interests and called for the amendment of the same before the passage of the law.
The Rivers State government through the state Commissioner for Energy and Natural Resources, Peter Medee, insisted that the bill be amended to include persons from oil-producing states to be appointed into the boards and executive positions of the agencies created by the PIB while the headquarters of the proposed commission be sited in Rivers considering its role in oil production.
Bayelsa State in a presentation by the Commissioner for Mineral Resources, Ebiere Jones, argued that the 2.5 per cent fund to be received by host communities where oil is explored on the basis of oil companies’ actual operating expenditure of the preceding year is grossly inadequate and recommend an upward to 10 per cent. It was, however, drama, when members of the host communities of crude oil reserves in the Niger Delta region engaged one another in a free for all.
The fight broke out as a result of the struggle by the various oil host communities over who should first speak or make presentation. Nevertheless, calm was restored after police personnel, at the venue, intervened in the matter.
Thereafter, Monguno announced that the host communities would only adopt their memoranda and exit the podium and promised the panel would visit various communities in the coastal region to properly engage them. Chairman of the House of Representatives Committee on Media and Public Affairs, Hon. Benjamin Kalu (APC, Abia), in a statement condemned the fight, saying: “The House is appalled at the scuffle which broke out between certain participants from the host communities at the public hearing of the Petroleum Industry Bill (PIB).” He described their action as contemptuous and constituted a breach of the sanctity of the House.