• OPEC says it will open door to new investment
• Host communities kick, decry exclusion
• PDP decries Presidential assent despite outcry, seeks urgent amendment
After five decades of operating an obsolete Petroleum Act, President Muhammadu Buhari, yesterday, signed into law, the Petroleum Industry Bill (PIB), not minding the controversial sections and criticisms that trailed the bill.
Working from home in compliance to the five days quarantine as required by the Presidential Steering Committee on COVID-19 after his return from London last Friday, the President assented to the Bill, while the ceremonial part of the new legislation will be done tomorrow (Wednesday), after the days of mandatory isolation would have been fulfilled.
The Petroleum Industry Act provides legal, governance, regulatory and fiscal framework for the Nigerian petroleum industry, development of host communities, and related matters.
The Senate had passed the Bill on July 15, 2021, while the House of Representatives did same on July 16, thus, ending a long wait for regulation of the sector since early 2000.
By assenting, the President possibly aligned with positions of the National Assembly, which proposes a 30 per cent revenue allocation for the development of frontier inland basins that are mainly in the North, dismal allocation to host communities, possible duopoly in the downstream sector, a 10 per cent management fee and other issues on Production Sharing Contract (PSC) as well as Joint Venture obligations.
In a letter to President Buhari, the Secretary-General of the Organisation of the Petroleum Exporting Countries (OPEC), Mohammad Barkindo, commended the signing, stating that the law will enhance the Nigerian petroleum industry’s reputation, open the door to new investment, and ultimately strengthen its position to meet the world’s growing demand for energy.
“The enactment of this legislation is especially timely as the investment outlook becomes clouded by efforts aimed at accelerating a lower-carbon future. Furthermore, the new law will help harness Nigeria’s potential to achieve its programme of raising oil production to 4mb/d and oil reserves to 40 billion barrels, while also drawing on the country’s vast natural gas reserves to provide clean and efficient energy.
“In addition, these resources will be vital to supplying world markets with a broad portfolio of energy options, and support global efforts to alleviate energy poverty as outlined in the United Nations’ Sustainable Development Goal 7,” he added.
The new legislation, despite the gaps, however, provide needed clarity on laws guiding the operations of the oil and gas sector, and equally tests the capacity of the government to implement its laws, especially as it relates to downstream deregulation, particularly, subsidy removal.
Having been in limbo for over 20 years, non-passage of the legislation has cost the country an estimated $200 billion revenue loss.
Managing partner, The Chancery Associates Solicitors, Emeka Okwuosa, said it was regrettable that the bill was assented to without taking on board the apprehension of host communities as well as the huge allocation to frontier inland basins.
Noting that the development is encouraging, years after being a mirage, Okwuosa said the new legislation would led to more investment flow into the sector.
According to him, the development would encourage transparency and accountability in the oil and gas industry, stressing that the “PIB has been long overdue and bodes well for the oil industry, irrespective of the slight and minor shortcomings.”
Chairman of Petroleum Technology Association of Nigeria (PETAN), Bank-Anthony Okoroafor, who described the move as a good step, said: “At least, we have a law that will bring clarity to the fiscal terms in the Nigerian oil and gas.”
Renowned energy scholar at the University of Ibadan and Head of its Department of Economics, Adeola Adenikinju, described the development as exciting news, after such a long wait to update the 1969 Petroleum Act.
The immediate past Director of UI Centre for Petroleum Economics, Energy and Law (CPEEL) maintained that while the PIB is undoubtedly imperfect, it nevertheless, provides stakeholders with clarity about the institutions and legal structures for the industry.
“This will help promote investment across the value chain, enhance performance efficiency of the national oil company, streamline governance structure in the sector and provides direct support to the host communities,” Adenikinju said, while also raising concern over the need for effective implementation of the provisions of the Act.
A legal practitioner in the energy sector, Madaki Ameh, stated that as presently crafted with a lot of unresolved issues, the assent to the bill might not be anything other than putting pay to the long delays that have attended the legislation.
Ameh noted that the assent is more of a desire by the current government to add to the scorecard instead of improving the sector.
He said: “The key to any law lies in its implementation, and it remains to be seen whether the political will to implement all the salient provisions of the Act is there, and whether it will create the needed enthusiasm in the industry to enable it get out of the current state.”
Energy scholar, Prof. Wunmi Iledare, finds it laudable that the President assented to the bill saying that it remained “a noble act that is worthy of euphoric celebration.”
While saying that he sees an investment-friendly fiscal framework with a well designed regulatory and governance institutions in the act, Iledare noted that though he has no crystal ball to know the future, he believes that the Act stands a good chance to enhance industry value.
Economist and former Director-General of the Lagos Chamber of Commerce and Industry (LCCI), Dr. Muda Yusuf, said the presidential assent to the PIB is a welcome development, even though it is not a perfect legislation because not all the concerns of major stakeholders have been addressed by the legislation.
“I am aware that the oil companies were concerned about the adequacy of the fiscal terms in the PIB. The host communities also had reservations about the percentage contribution to host communities fund. But we can always improve on those provisions with time. Issues of this nature are typically work in progress.
“The Act is a major instrument of reform in the oil and gas sector. It has a number of significant implications for the oil and gas sector and the economy as a whole. It has a profound investment effect as investment sentiments in the petroleum sector are enhanced by the new policy regime,” he added.
HOWEVER, the Edwin Clark-led Pan Niger Delta Forum (PANDEF) has condemned the signing into law of the PIB. National Publicity Secretary of PANDEF, Ken Robinson, in a statement yesterday, condemned the development, describing it as unfortunate.
“It is unfortunate that President Buhari went ahead to assent to the PIB despite overwhelming outcry and condemnation that greeted its passage by the National Assembly, especially with regards to the paltry three per cent provision for the Host Communities Development Trust Fund and the brazen appropriation of an outrageous 30 per cent of NNPC Ltd profit for a dubious, nebulous Frontier Oil Exploration Fund.
“This PIB falls way short of the expectations of the Oil and Gas Producing Communities, that bear the brunt of unconscionable industry operations. This assent, by President Buhari, simply speaks to the repugnant attitude of disregard, propelled by arrogance, disdain and contempt with which issues concerning the Niger Delta region are treated, particularly, by the present administration,” he added.
On its part, the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) and Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) are cautiously optimistic about the benefits inherent in the signing of the PIB into law.
In its reaction, President of PENGASSAN, Festus Osifo, said while signing the bill into law after 14 years in the works signals an achievement, the legislation is far from being a perfect legal instrument.
Picking holes in the law, Osifo frowned on the provision of dual regulators for the industry as contained in the law. He stated that having a regulator for the upstream and midstream and another one for the downstream will not augur well for the industry.
With all the imperfections in the law still, Osifo said all the critical stakeholders must come together to ensure the best is got from the law.
On the dual regulators for the industry, Osifo said: “Our position is that the oil and gas industry should follow the example of the Nigerian Communication Commission (NCC), which regulates the communication sector, and that of the Central Bank of Nigeria (CBN) that regulates the financial sector. We hope that the next National Assembly will take a second look at this provision and amend it.”
On his part, the National President of NUPENG, William Akporeha, lauded the signing. He declared that while the signing of the bill into law is a welcome development, there are aspects of the law that do not sit well with many stakeholders.
Like his PENGASSAN counterpart, he also dispelled the notion that the law might herald the commencement of deregulation policy. He explained: “There are many areas that need rework. I think the next National Assembly has work to do in that regard. The PIB and deregulation are two different things. The signing of the PIB into law does not mean that deregulation as a policy will take off immediately. The issue of deregulation will be discussed and negotiated when the time comes.”
The NUPENG helmsman urged the Federal Government to put in place machinery to ensure the smooth take off of the new legislation.
An energy expert, Micheal Faniran, noted that the signing of the legislation represents a great milestone, stressing that the bill took longer than necessary.
“The new law is expected to jumpstart the needed reforms in the sector. However, the PIB is not an end in itself but a means to an end.
“Provisions in the law are expected to improve transparency in the petroleum sector, potentially lowering revenue losses due to inefficiencies and corruption. The new law is also expected to attract investment into the oil and gas sector, boost production with an ultimate positive impact on Nigeria’s economy,” he stated.
THE Senate yesterday described the accent to the Bill as a major victory that has the potential of bailing Nigeria out of economic predicament. In a remark by the Chairman, Public Affairs Committee of the Senate, Dr. Surajudeen Ajibola Basiru, he congratulated the executive arm of the government, leadership and members of the National Assembly and all other stakeholders in the oil industry.
“Efforts at reaching this stage have been a protracted affair as the Bill, first initiated in 2003, had been subjected to a ping pong affair between the previous legislatures and the executive.
“The ninth National Assembly finally broke the jinx when it recently passed the Bill after working dispassionately by putting the interest of the nation first over petty squabbles and other self interests, thereby laying finally to rest previous failed attempts.”
Talking about the benefits of the law, Basiru said it would juice up the nation’s economy by liberalising the petroleum sector, which will pave the way for investors, both local and international, to invest in the oil sector with government on a competitive basis.
MEANWHILE, the Peoples Democratic Party (PDP) has expressed disappointment with President Buhari “for ignoring the outcry by Nigerians across board not to sign the offensive, repugnant and anti-people Petroleum Industry Bill (PIB), as passed by the National Assembly, into law.”
The party noted that the signing of the law, despite widespread public rejection, amounted to endorsement of imposition, a development it said further confirmed that President Buhari and his All Progressives Congress (APC) have no iota of respect for the people, as well as the tenets of democracy as a system of government.
“By his action, President Buhari has only authenticated that he is not a listening leader and that the APC and its leaders are only out to trample on the will of Nigerians for their selfish interests.”
In a statement by its national publicity secretary, Kola Ologbondiyan, the PDP said in endorsing “the obnoxious bill, even with its distasteful, paltry and provocative three per cent revenue to oil producing communities, President Buhari and the APC have again displayed disdain and insensitivity to the sufferings of the people of the Niger Delta.”
The PDP held that “such is the height of contempt to oil producing communities, particularly in the face of the challenges which they face as a result of oil exploration.”
The PDP called on President Buhari to salvage the situation by immediately forwarding an amendment bill to the National Assembly to reflect the true wishes and aspirations of every segment of the nation.
While calling for calm across the country, particularly the South-South geo-political zone, the PDP also charged lawmakers elected on its platform to be at alert even as preparation must commence for an urgent amendment to this law.
Similarly, a coalition of Oil and Gas Host Communities in Rivers State has condemned the President’s assent. Chairman of the coalition, Barituka Loanyie, said the signing “without resolving the ambiguous rifts in it or even putting into consideration the outcry of our people was a display of arrogance and injustice.
“We want to state that this PIB is just a rubber stamp of what the executive wanted, that is why it was hurriedly passed and signed. It is like the case of the Niger Delta Development Commission (NDDC) where they give with one hand and take with the other hand. We reject this PIB because it does not scratch where is itching us. This is complete injustice.
“If the Solid Minerals Act can provide better protection for communities in the extraction site, why will the case of the PIB be different? The Solid Minerals Act provides for the establishment of an Environmental Protection and Rehabilitation Fund to guarantee the environmental obligation of mining companies. This fund ensures the restoration of any damaged environment in the cause of mining activities but the PIB denies oil and gas communities that right,” he said.
A one time NDDC Commissioner in Cross River State, Prof. Eyo Nyong, expressed concerns that despite the number of issues raised on the PIB, they were ignored by the Federal Government, wondering how the bill will address the issues bordering on the wellbeing of the host communities.
While Comrade Wisdom Ikuli, National President, Niger Delta Nonviolence Agitators Forum (NDNAF) lauded the development as a positive omen, the National President, Movement for the Survival of Izon Ethnic Nationality in the Niger Delta (MOSIEND), Kennedy Tonjo West, berated the President for his quick signing of the bill without adding even one more per cent for host communities.
THEGUARDIAN
