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What should be the utmost factor in passing the Petroleum Industry Bill (PIB)? The consensus is that national interest should supersede any other factor, writes SANNI ONOGU

Senate President Ahmed Lawan and Speaker Femi Gbajabiamila have given their words that the Petroleum Industry Bill (PIB) will be passed this year. Minister of State for Petroleum Timipre Sylva and the Group Managing Director of the NNPC, Melee Kyari, said the country needed the PIB badly.

Sylva noted that apart from the COVID-19 pandemic and economic recession, the oil industry is faced with other critical challenges.

“Several nations have announced their intent to comply with the Paris Agreement 2016 and adopted climate change policies by 2050 or 2060. This means that the usefulness of fossil fuel (crude oil) will diminish significantly. Indeed UK, South Korea, China, Brazil and some other nations fall within this category.

“Global financing of fossil fuel projects have also been affected with many investor nations and other major players within the financial ecosystem have reiterated their intention to stop funding projects fitting this description in 2025.

“This will inevitably impact the ability of industry players to access the needed funds with which we will bring assets into production and by extension reduce government’s revenue ordinarily,” Sylva said.


Kyari lamented that the oil industry has not seen significant investments and developments since year 2000 till date. “When we started the journey to PIB in 2000 through the Oil and Gas Reform Committee, that was the beginning of uncertainty in the industry,” he said. “Since 2000 till this moment, I can also confirm that the industry has not seen significant investments and developments.”

The NNPC chief added:  “The reason is very clear. We have stagnated and with that stagnation, we need to exit it like yesterday. Twenty years ago, the topmost companies were oil and gas companies but today the topmost company is a supermarket.


“In more than 30 years to come, we will still be resource-dependent in the sense that it is a developing country and we have 70 per cent of our population below 30 years of age. The PIB will bring us back into the reckoning to take advantage of the resources that we have today so this country can make progress.”

The challenges

Scheming, in-fighting and mistrust have trailed the better side of the consideration of the bill. To the Executive Director, Civil Society and Legislative Advocacy Centre (CISLAC), Auwal Rafsanjani, the Petroleum Industry Bill currently being considered by the National Assembly is good to go “if the content of the bill is based on principles that enshrine fairness, transparency and accountability in the sector then there is nothing to wait for.”


Rafsanjani argues that the bill has a balanced view like putting “the national interest first,  which also includes the survival of the business community, “then they can ignore selfish sentiments and go ahead and pass the bill. You can never please everyone at the same time.” This assertion becomes pertinent as PIB is passing through the crucible in both chambers of the National Assembly once again.

The resolve of both chambers to get the bill done this time may have contributed to the strong representations at recent public hearings on the bill. Some stakeholders saw the public hearing as an opportunity to influence the outcome of the bill. The PIB has been lying fallow in the National Assembly in varied forms since 2007.

It failed to become law apparently due to the inability of the framers of the bill to ensure a balanced bill that would be beneficial to all concerned, including the average Nigerian, the Federal Government, host communities, International Oil Companies and investors.

One thing that is not in doubt about the PIB is the consensus that the nation’s oil sector requires a regulatory, governance and fiscal legislation that would guide the exploration and exploitation of the nation’s hydrocarbon deposits in a profitable manner.


It is generally agreed that the corruption, opacity and lack of transparency and accountability in the sector is largely due to the lack of enabling law that would take into account not only the issue of increased revenue for the federal government, profit for investors, mainstreaming of local content, the security of oil installations and personnel and environmentally friendly operations, remediation of impacted host communities and adequate compensation for the people of the Niger Delta Region.

The Niger Delta people have been vociferous in their agitations over the years for a fair deal in the mining of their mineral endowment often referred to as the Black Gold.


These agitations have manifested in peaceful and violent demonstrations, local and international demonstrations, youth restiveness and breaching of oil pipelines and installations.

No doubt the oil spill and production effluents have negatively impacted the region and rendered the mainstay of the people which is fishing and farming progressively unattractive. Environmental pollution has attended the exploitation of oil resources over the years.

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To the IOCs, their major concerns include adequate return on investments security of oil platforms and personnel and seamless operations and repatriation of accruable dividends.

While fingers have pointed in their direction for the stillbirth suffered by the PIB over the years, they have expressed strong reservations about some provisions in the current bill. The host communities have also come out strongly to advocate for a better deal. While some of them have called for 10 per cent equity shareholding in the three companies that would emerge from the commercialisation of the Nigerian National Petroleum Corporation, others seek the scrapping of the Niger Delta Development Commission, the contribution of 10 per cent operating expenses of oil companies to the proposed Host Communities Development Trust Fund and the direct payment of lawful benefits to host communities and families.


Public hearing

The public hearings in the Senate and House of Representatives have been concluded. Organised by the National Assembly Joint Committees on Petroleum – Upstream, Downstream and Gas – the hearings were interlaced with strong vibes and drama. While the Senate sessions ended on a peaceful note after stakeholders made their point, the House of Representatives hearing witnessed a free for all by opposing factions of host community associations.

Lawan sent a strong message to those who may be out to play the spoilers’ game in the determination of the National Assembly to pass the PIB. To him, the PIB is a task that must be done. He said that the passage of the Bill was long overdue. He said that the 9th National Assembly is eager to pass the PIB and ensure maximum befit for the country in particular and industry players in general before crude oil loses its savour to new technology in renewable energy.


Arguably, according to him, Nigeria’s oil and gas industry has experienced several shocks and challenges over a long period as a result of outdated laws.

He said that the challenges include those dictated by global practices, the persistent calls for the deregulation of the downstream sector, the agitation of the oil-producing communities and the unbundling of the NNPC, which necessitate urgent legislative reform.

“Our determination to pass the Bill is driven by the need to overhaul a system that has refused to operate optimally in line with global standards, resulting in loss of continental competitiveness, transparency, accountability, good governance and economic loss for the petroleum industry and the country.

“More so, the challenges surrounding the future usefulness of petroleum resources and the increased level of uncertainty on oil demand calls for great concerns.


“It is estimated that with the evolving of new technologies, fossil fuel may be less attractive if not of no value in the next 20 years. It is, therefore, time for us to make maximum benefit of our fossil fuel reserves through this reform before it fades away.”

To him, the haste by the National Assembly to get the Bill passed is not far-fetched. “As legislators, we will strive to deliver a Bill that will enhance the growth of our oil and gas industry, modernize our fiscal system and enhance competitiveness, while creating harmony for all stakeholders.

“This is a promise we have made and that we shall achieve. Nigeria must have an Oil and Gas Industry that benefits its people. Equally, our Oil and Gas Industry must be competitive. We must create a sustainable investment climate, where business in the sector will flourish.”

The IOCs

In spite of the hopes that the existence of robust and dynamic legislation like the PIB is required to shore up the revenue if the country and cater to the positive interests of investors and Niger Delta stakeholders, IOCs have strongly objected to the passage of the bill “in its current form.”

The IOCs, represented by the Oil Producers Trade Section (OPTS) of the Lagos Chamber of Commerce and Industry (LCCI), at the session acknowledged the commendable efforts of the Federal Government to enact the all-encompassing legislation but warned that the law may reduce Nigeria’s global competitiveness.

“We fear that if the PIB is passed in its current form, it will not meet the government’s objectives of making Nigeria the leading destination for oil and gas investment and the recent scarcity of investment – only $3bn out of $70bn (representing 4 per cent) in Africa – will continue,” chairman of the OPTS, Mike Sangster declared.

The OPTS boss insisted that the lack of competitiveness was caused in part by the high cost of doing business in Nigeria, with overall project costs and operations costs being 69 per cent and 42 per cent higher than the global average respectively.

“Nigeria’s Government Take also remains high and uncompetitive, exceeding that of most comparable prolific basins, Sangster lamented, while advocating that that “a PIB, which safeguards existing projects and introduces competitive terms, is required to fully utilise the country’s resources for the benefit of all Nigerians.”

Host communities

On their part, the Host Communities of Nigeria Producing Oil and Gas, insisted on 10 per cent equity shareholding in the three companies to emerge from the commercialisation of the NNPC.

The National President of HostCom National, Dr Benjamin Tamaranebi, said: “After 60 years of marginalisation and bearing the brunt of the negative impacts of exploration and exploitation.

“Today some states have started discovering and enjoying their natural resources but the oil-producing states and HostCom are not envious of them therefore our position is sacrosanct.

“It will be very absurd and economically very illogical to deprive HostCom the right to equity shareholding in both the establishment of the NNPC Limited, the Commission, the Authority and the Boards.

“Rather than attempt to sell performing equity as stated in the 2020 PIB, no equity/asset is performing more than our Oil and Gas reserves. This quest to take over complete control of all our National assets by a very unpatriotic few has to stop.”

Tamaranebi later told reporters that the provision that oil companies should contribute 2.5 per cent of their operating expenditure to the Host Community Development Trust Fund should also be increased to 10 per cent.

For the President, Women in Energy Network (WIEN), Funmi Ogbue, the provision that oil companies should contribute 2.5 per cent of their operating cost to the host community development trust fund is exorbitant in view of other taxes they are already saddled with. “WIEN believes that 2.5 per cent is too expensive. WIEN posits that a total of not more than 1% consistent with other statutory provisions like the Nigerian Local Content Act 2010 should replace the current figure captured in the PIB.”

However, according to Rafsanjani, every player in the sector has the right to seek protection for their interest. “The most important thing is to put their requests on the table, objectively look at them critically and figure out if it is borne out of selfish sentiments or an act of progressive advice to help the government sustain the business profitably.”

He noted that while the PIB is over 20 years old, passing the Bill is one thing while the content of the bill is another.

“If the content of the bill is based on principles that enshrine fairness, transparency and accountability in the sector, then, there is nothing to worry about.

“If the bill is based on the national interest which includes the survival of the business community, then they can ignore selfish sentiments and go ahead and pass the bill. You can never please everyone at the same time,” he said.ADVERTISEMENT

The CISLAC chief insisted that agitations, demands and requests are not wrong in themselves.

He added: “Anyone sect has the right to put up one as a stakeholder in the business where the work is on scrutinising the intents and their consequential impact on the wheel of progress of the particular issue under consideration.

“The National Assembly should consider the entire requests, demands and whatever name they come up with but objectively sieve out selfish demands but uphold suggestions that will put the sector and the country at large on a road to success.”

He believes that there is political will, as no one is stopping the country from getting it right this time. However, he insisted that the only challenge is to ensure that the people to administer the provisions of the PIB when passed into law would not usurp it for selfish interest rather than the collective interest.

He asserted that “This brings us to a point where we need to put ourselves together to demand that the people that political will is bestowed upon should use it for the good of the nation, it is everyone’s work.”

He urged that National Assembly to borrow a leaf from international best practices while fashioning in order to give the country a law that would enhance the fortunes of the nation.

He said: “There are models all over the world on how people/countries are managing the sector in their country, it is not rocket science to learn that and implement, Saudi Arabia, UAE, Norway to mention but a few.

“There is need to get the sector out of the political office holders’ influence else the sector will continually be managed to serve one purpose which is a drain pipe for the political class to fund frivolities in governance.”

The ball is now in the court of the two chambers of the National Assembly to pass a PIB that is fair to all and not necessarily agreeable to all concerned. It is hoped that the expressed commitment to pass the Bill already expressed by the leadership of the National Assembly, will give the country the much anticipated PIB this time around.

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