PIB: Stakeholders seek support for bill’s passage

Oil and gas sector experts believe the passage of the Petroleum Industry Bill (PIB) can rejig the nation’s economy after the COVID-19 pandemic. PHILIP NYAM reports on a recent engagement of stakeholders and the media




Fifteen years after its introduction in the Nigerian parliament, it is not yet Uhuru for the Petroleum Industry Bill (PIB). Unarguably the oldest bill in the history of Nigerian democracy, the fate of the PIB still hangs in the balance.

In spite of the uncertainty surrounding the survival of the bill, many stakeholders in the oil and gas industry believe that it has the potential to rejig the nation’s economy after the economic crisis caused by the novel coronavirus.

It was in the light of this belief that a renowned name in the oil and gas sector, Facility for Oil Sector Transformation (FOSTER), organised a one-day virtual conference in conjunction with the House of Representatives press corps on how best the media can influence the legislature to pass the bill.

FOSTER believes that the time to pass the bill is now and that there could be no better time than now to reform the oil and gas sector if Nigeria is to make a head way post-COVID-19.

The engagement

Making the principal presentation at the conference titled: “An urgent case for reforms in the petroleum sector,” a senior partner, Energy and Commercial Contracts with Primera Africa Legal, Mr. Israel Aye, furnished participating stakeholders with guidelines on how best to reform the oil sector for it to be of utmost value to the Nigerian economy.

He reasoned that with the recent fluctuating price of crude oil in the international market, “we (Nigerians) are seriously under threat.” According to him, it is expected that the scope of reforms should focus on governance of the petroleum sector, the operational institutions in the sector, the upstream, midstream and downstream.

He added that agitations for deregulation of the downstream and subsidy removal appeared sustained because subsidy, which is expected to serve the interest of the masses “is not so, because it is usually misdirected.”

Speaking on efforts to ensure that crude products are refined locally, Aye said private investors should be encouraged. He submitted that “if you are able to consistently point out the benefits of something, people are bound to key in. I will recommend incentives, to make it attractive and compelling for investors.”

Citing what the government did in Liquefied Natural Gas (LNG) and the successes inherent as a practical example, the oil expert, however, argued against campaigns that illegal refineries usually destroyed by security agencies when discovered should be converted to modular ones and upgraded where possible.

He maintained that the operations of such refineries amount to criminal activities and should not be condoned. “I think it is more of a security issue,” he submitted.

On the unfortunate long delay in the passage of the PIB, Aye blamed it on the high rate of turnover of federal lawmakers every four years, leaving room for fresh hands to start the process all over.

“On each of the journeys (of the bill), there were different stories, and it was mainly political reason in the last effort. We understand that the executive team is working on the bill now,” he said, noting that hopes were high that the bill will get to the parliament early enough for consideration.

The bill

The 15 year-old 191-page bill tagged the Petroleum Industry Governance Bill (PIGB), provides for the governance and institutional framework for the petroleum industry and for other related matters. Widely known as the PIB (just a segment) seeks to unbundle the Nigerian National Petroleum Corporation (NNPC) provides for the establishment of Federal Ministry of Petroleum Incorporated, Nigerian Petroleum Regulatory Commission, Nigerian Petroleum Assets Management Company and National Petroleum Company and Petroleum Equalisation Fund.

After more than a decade in the parliament, both chambers passed the bill in 2018. But President Muhammadu Buhari raised issues on some of the provisions on the passed PIGB. The President had withheld his assent to the bill, citing constitutional reasons.

He gave three major reasons including “that the provision of the bill permitting the Petroleum Regulatory Commission to retain as much as 10 per cent of the revenue generated unduly increases the funds accruing to the Petroleum Regulatory Commission to the detriment of the revenue available to the federal, states, Federal capital Territory and local governments in the country; expanding the scope of Petroleum Equalisation Fund and some provisions in divergence from this administration’s policy and indeed conflicting provisions on independent petroleum equalisation fund and some legislative drafting concerns which, if assented to in the form presented will create ambiguity and conflict in interpretation.”

Consequently, in May 2019, both the Senate and House of Representatives re-committed and bill after considering the President’s concerns. The lawmakers removed the provisions Buhari disagreed with. In deleting the contentious provisions, the legislators noted that the President’s observations were germane for the smooth operations of the bills.

However, the bill was not signed into law until the life of the 8th National Assembly elapsed. In September last year, the House of Representatives promised that it would revisit the bill. In fact, Speaker Femi Gbajabiamila, in his inaugural speech listed the PIB as one of the priority bills that his leadership would see to their passage before the end of the 9th Assembly.

Shedding light on the problems of the bill, spokesman for the House, Hon. Hon, Benjamin Kalu, explained that the executive was against the bill for prioritising individual interest over public interest because the proposed retention of 10 per cent of petroleum revenue by the proposed National Petroleum Regulatory Commission despite the fact that its budgetary allocation would reduce the revenue available for sharing among the three tiers of government.

According to him, Buhari also rejected the bill because of the scope of the Petroleum Equalisation Fund under the bill was not in tandem with the policy of his administration on an independent PEF.

Kalu said: “It is clear from the dissonance of stakeholders on the PIGB that the efforts of the 8th Assembly to carry the public along was not sufficient. This is very instructive to us because the 8th Assembly did make considerable efforts in stakeholder engagement. Recall that they went beyond public hearing into stakeholders’ consultation and engagement across the nation and importantly around the oil producing communities.

“The problem, however, is that the committee’s (on PIGB) engagement efforts was limited to the draft of the bill already before them. Building stakeholder consensus is key to passing the legislation, obtaining presidential assent and ensuring that subsequent implementation is effective.

“Going forward, the 9th House of Representatives will seek to achieve this consensus by bringing together the various political and economic constituencies at the earliest stages to harmonise the different proposals under consideration before the legislation is brought to the floor. This way, we hope to overcome the differences that have thus far hindered all prior attempts at reform. One of the considerations is to constitute a committee charged with the responsibility of drafting the bill de novo.

“The process of raising the draft must clearly involve and incorporate the views, as much as possible, of all stakeholders, including their validation of the final draft.”

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