Tag: Petroleum Industry Bill

  • PIGB will curb corruption, says IPMAN, NEITI

    PIGB will curb corruption, says IPMAN, NEITI

    Major stakeholders like the Independent Petroleum Marketers Association of Nigeria (IPMAN) and the Nigerian Extractive Industries Transparency Initiative (NEITI) are of the view that the Petroleum Industry Governance Bill (PIGB) will curb corruption in the distribution of petroleum products. However, the Oil and Solid Mineral Producing Area Landlords’ Association of Nigeria (OMPALAN), has viewed it from a different perspective, stressing that what will make the difference is not a mere passage of the bill but implementation of its content, reports JOHN OFIKHENUA.
    Owing to the Senate passage of Petroleum Industry Governance Bill (PIGB) that now awaits President Muhammadu Buhari assent, stakeholders in the oil and gas industry, including Independent Petroleum Marketers Association of Nigeria (IPMAN), Nigerian Extractive Industries Transparency Initiative, and Solid Mineral Producing Area Landlords’ Association of Nigeria (OMPALAN), and Civil Society Organization expressed their observations about the new order.
    The upper chamber of the National Assembly had last Thursday scrapped the Nigerian National Petroleum Corporation (NNPC). In its place, the Senate established three entities: the  Petroleum Regulatory Commission (PRC), National Petroleum Company (NPC), Nigerian Petroleum Assets Management Company (NPAMC). Following the bill, the PRC shall be the Industry Regulator and watchdog, responsible for licensing, monitoring, supervising of petroleum operations, enforcing the laws, regulations and standards across the value chain.
    Should Mr. President pass the bill into law, the PRC will absorb the Department of Petroleum Resources, Petroleum Products Pricing Regulatory Agency and the Petroleum Equalization Fund.
    Although there are two other parts of the Petroleum Industry Bills (PIB) that the Senate is yet to pass, the present PIGB is simply meant to restructure the administration of the Nigerian oil and gas industry.
    Soon after the Senate broke the news of the passage, the IPMAN National Vice President, Alhaji Abubakar Maigandi, told The Nation on phone that should the law see the light of the  day, it will address the issue of corrupt practices in the petroleum industry. He has been very critical about the effect of corruption on the distribution of petroleum products, which he describes as a setback to this administration’s fight against corruption. He advised President Buhari to quickly sign it into law to improve the anti-corruption battle in the industry and attract investment in refineries and depots.
    Maigandi said: “That bill is a good thing to Nigeria because it will reduce a lot of corruption in the industry. It will allow people to participate fully in the industry. So, it is a good thing. It will bring the marketers to start thinking about the establishment of refineries and private depots. I advise Mr. President to sign it in a hurry so that it will reduce the rate of corruption. And it will add value to the Nigerian economy. It will remove the bureaucracy that allows a few individuals to shortchange the country.”
    Speaking for the Oil and Solid Mineral Producing Area Landlords’ Association of Nigeria (OMPALAN), Prof. David Esezobo, said that the implementation of the law is as important as its enactment. What would make the difference, said the don, is its ability to stop the priority which was given to oil multi-nationals to the detriment of local content in the industry. He tasked the government on encouraging local participation in the refining of petroleum.
    His words: “Encouraging the local people that are having refineries here will boost the economy of the nation. But you find out that the people that are supposed to encourage these indigenous refineries, their outfits are being burnt and given all sorts of name. This is because there is always international conspiracy to the nation wealth to impoverish the local communities. I think that they should strengthen these people, otherwise it will just look like a paper.”
    The Chief Economist of the Nigeria Labour Congress (NLC) Dr. Peter Ozon-Eson, who spoke with The Nation on phone on Sunday, recalled that the congress had always sought the abrogation of the omnibus National Petroleum Corporation. He could neither commend nor condemn the PIGB, according to him, the NLC was yet to read it.
    He said: “I am yet to see the bill for me to make comment. I know there were issues we had raised. They had to do with omnibus regulator both for upstream and downstream. I don’t know whether that has been addressed so until I see it before we can comment on it.”
    The Nigerian Extractive Industries Transparency Initiative (NEITI) issued a statement commending the lawmakers on its courage. Its Director of Communication, Dr. Oji Ogbonanya Oji said that the “decision of the Senate to consider the bill as priority resulting in its passage is not only legendary, but historic given the challenges the bill has passed through in its legislative journey for almost two decades.”
    The Watchdog organization recalled that the passage of the bill is coming more than 17 years after the process commenced in April 2000. It stressed that “We also note that the objective of a petroleum sector Law remains to develop a dynamic governance  framework that will re-position the Petroleum industry to fully embrace competition, openness, accountability, professionalism as well as better profit returns on investments. “
    NEITI noted that in 2016, it was in realisation of the current stagnation of investment opportunities in the Petroleum Industry, the negative consequences to the economy as a result of the absence of the new law that made the agency to publish a researched Policy Brief titled “Urgency of a new Law for the Petroleum Sector”.
    In that publication shared with members of the National Assembly, NEITI alerted the nation that Nigeria had so far lost over $200 billion as a result of absence of the Law. “These lost revenues were as a result of investments withheld or diverted by investors to other (more predictable) jurisdictions. The hedging by investors stems from the expectation that the old rules would no longer apply, but not knowing when the new ones would materialize”.
    While NEITI looks forward to carefully studying the contents of the PIGB as passed by the Senate, it joins all stakeholders to commend Senate for what has been achieved so far in the passage of this important Bill. NEITI also commends the media, civil society organizations, industry, stakeholders and experts who have followed the bill in the National Assembly for their valued contributions to the process.
    Also speaking  with the Nation on phone, Emmanuel Ojugbena of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), extolled the Senate for passing the bill. His association, according to him, was yet to study the to the extent of making informed comments on it. “We are yet to take a look at it. We are happy that at least eventually the bill is passed but we have not really taken a lot at what has been done. For now, we may not be in a position to make a statement on it. But generally we are happy that the Senate was able to pass that bill. When we go through it we will know what to say about the bill.”
    While working with the Civil Society Legislative Advocacy Centre (CISLAC), a stakeholder that had been advocating for the passage of the bill and improvement of governance issues in the industry, Dr.  Garuba Dauda yesterday told The Nation that Since the bill has unbundled the NNPC, inter-governmental agencies: Bureau of Public Enterprises, Federal Ministry of Finance and the Ministry of Petroleum  will now be interacting as stakeholders who can now make it difficult for NNPC to hide anything in the industry from stakeholders. According to him, these organizations will now bring their ideas and interest to bear in the governance of the industry instead of leaving it solely in the hand of NNPC.
    On how the bill will contain corrupt practices if signed into law, Dauda said “this PIGB also addresses the issues of transparency and accountability. Let  me just say that even if it is signed into law as it is, it is not going to be automatic. There are still going to be quite a lot of some work to make things happen. We are going to have six months after the assent to unbundle all that is supposed to be done in this content and push on. But to me, it is a fine way to begin that process. This bill for restructuring the oil and gas industry has been on for many years, and we are just starting it is not going to look as if all the problems of opacity  and accountability issues in this industry is going to be solved all in one day. But at least, we now have a roadmap towards narrowing all those issues and ensuring that the public put their eyes in what is happening in the oil and gas industry. Like I said, the share division of the assets and liabilities and serious involvement of the various government agencies into it are also going to be party to getting it right.”
    In retrospect, the advocate of social justice in the industry traced the history of the bill to when former President Olusegun seventeen years ago first commissioned a series of reports through the efforts of the World Bank to carry out a study on the ills of the sector. Dauda noted that the effort to restructure the industry with a law commenced  in December 2008.
    He added that “before us, we have seen how that effort failed under the 6th assembly after which we faced a very serious crisis with what culminated in the January 2012 subsidy issue. That, also culminated in the sending of another bill to the National Assembly in 2012, which we also saw crumble at the last minute during the end of the past administration by the administration of Goodluck Jonathan.”
    Extolling the lawmakers that passed the bill, Dauda said that “what I find particularly ingenious about those who moved the present effort was the decision not to do the business in the same way again because you cannot do a particular thing the same way and expect a different result. He added that: ” I found it particularly ingenious in terms of the decision taken to pursue this from a different perspective and I thank seriously the  Senate for their effort, and also the House of Representative.”
    He explained that previous efforts at passing the bill were unsuccessful because people were pursuing various interests that were inimical to the system.
    On his expectations from the bill, Dauda said it was surprising the private bill that is on the management of the industry was passed before that the executive bill which is on the 7 Big Wins of the federal government.
    He explained that “What we were expecting at least ,if you read the 7big wins which actually is defining the roadmap for the restructuring of the oil and gas industry under the administration particularly from the Ministry of Petroleum Resources. The the big wins told us that we were going to get a new bill by December and because the Senate has gone ahead to do something. The pressure on the Ministry of Petroleum Resources and executives since last year was to tell them not to put forward another bill again so that, that will not like take us back to the basis. That they could actually make submission to the National Assembly to incorporate into what was before the Senate. And for me, that actually works. It is in that context that even the ministry of petroleum resources is also currently forthcoming with a fiscal policy,  and it is also going to the National Assembly.”
  • APC commends senate over passage of PIB

    APC commends senate over passage of PIB

    The All Progressives Congress (APC) Thursday said the passage of the Petroleum Industry Bill by the Senate was a clear testimony of the determination of the APC led government to meet the aspiration of the Nigerian people.

    The party urged the House of Representatives to follow suit and pass the bill into law as it will bring about reforms that would ensure greater transparency and accountability in the Nigerian oil and gas industry.

    In a statement signed by the National Publicity Secretary of the party,  Mallam Bolaji Abdullahi, the Party notes that the bill had languished in the various chambers of the National Assembly for about 12 years but it took the purposeful and dedicated APC-led Senate to pass the bill

    “We are very excited that the bill was passed today after about 12 years delay.  We specially commend the Senate President, Dr. Bukola Saraki for his focused leadership of the 8th Senate, which has produced several legislative actions that have positively affected the lives of Nigerians, promoted good governance and advanced on-going efforts by the APC-led administration to rebuild the Country

    “The passage of the bill is an indication that our federal legislators are diligent and reform-minded, and are committed to fulfilling the promises our Party made to Nigerians.

    “We call on the House of Representatives under the leadership of Rt. Hon. Yakubu Dogara to follow the example of the Senate by also promptly passing the PIB.

    “The APC calls on Nigerians to continue to support and cooperate with the President Muhammadu Buhari APC-led administration and the National Assembly as they continue to make laws and execute projects to improve the wellbeing of Nigerians.”

     

  • Oando Chief predicts 2.2m bpd oil output by June

    Oando Chief predicts 2.2m bpd oil output by June

     The Chief Executive Officer of Nigeria’s Oando says worst disruptions in oil-producing Delta region are over, and production could reach 2.2 million barrels per day (bpd) by the end of June.

    Oando chief Pade Durotoye told the Africa Independents Forum on Wednesday in London that the long-closed Forcados oilfield could also be back to capacity by the end of June.

    “We think that the worst is behind us,’’ Durotoye said. “Before the end of June, we will have Forcados back, which would take us comfortably back to 2.2 million bpd.’’

    Attacks in the Niger Delta had pushed production to just over 1 million bpd at certain points last year, the lowest in decades, but attacks have abated since the start of the year.

    The first Foracdos cargo from the main Trans-Forcados export line loaded last week, though operator Royal Dutch Shell has said force majeure remains in place.

    Durotoye said “bold actions’’ by the government to address security in the area had helped, and that if it continued, Oando could boost output from 50,000 bpd to 150,000 bpd within18 months.

    Durotoye said concerns over more violence had made investors to view the region with a lot of caution.

    “Capital is still going to be constrained,’’ he said.

    Durotoye also said Nigeria’s long-delayed Petroleum Industry Bill (PIB), which governs everything from the operations of state oil company NNPC to fiscal terms on oil exploration projects, was moving at a more assured pace.

    “We expect approval sometime in the second half of the year,’’ Durotoye said.

    Uncertainty over fiscal terms has held back upstream investment, especially in capital-intensive deepwater offshore.

    Durotoye said that PIB approval would “put some (investor) concerns to bed.’’

     

  • Presidential aide calls for quick passage of Petroleum Industry Bill

    The Special Adviser to the President on Political Matters, Alhaji Ahmed Gulak, on Friday said that the quick passage of the Petroleum Industry Bill (PIB) would create an enabling environment for the sector.

    Gulak told the News Agency of Nigeria (NAN) in Abuja that there must be complete deregulation of the oil sector if Nigeria must move forward.

    He said, “There must be complete deregulation of the oil sector if Nigeria must move forward; without complete deregulation, private investors will not come to build refineries.

    “As long as the subsidy regime is in place, we will always have problems. Our petroleum sector will not be developed; private investors will not bring in foreign investment to build the refineries.”

    According to him, indigenous investors are not willing to build refineries, if they can go and import petroleum products and be paid subsidy by the government.

    “So, if we want development in that sector; if we want availability of the product; if we want to add value to our crude oil, then we must deregulate the sector,” he said.

    On the state of Nigerian roads, the special adviser said the roads were dilapidating faster due to the overuse.

    He told NAN that pressure on the roads would significantly reduce once the rail system being planned by the government became functional.

    The special adviser urged Nigerians to support the Transformation Agenda of President Goodluck Jonathan to ensure rapid growth and development of the country, create jobs and tackle insecurity.

    He advised Nigerians to allow political parties in the country to grow along democratic lines, adding that it would be one way of delivering the dividends of democracy.

    He also appealed to Nigerians to uphold justice for the development and sustenance of “true democracy” in the country.

    According to him, true democracy will uplift and sustain the integrity of the nation with equity, fairness and justice in place.

     

  • Should oil theft attract death penalty

    Should oil theft attract death penalty

    While inaugurating the Committee on the Petroleum Industry Bill, Senate President David Mark suggested death penalty for oil thieves and pipeline vandals. But some lawyers believe that capital punishment will not solve the problem, just as it has not solved armed robbery. For them, the existing laws should be enforced, Precious Igbonwelundu reports.

    Senate President David Mark has called for the death penalty for oil thieves and illegal bunkerers to stem pipeline vandalism.

    He spoke while inaugurating the Senate Joint Committee on Petroleum Industry Bill (PIB), noting that capital punishment was most suitable for oil thieves who have made the country lose so much revenue.

    The Nigerian National Petroleum Corporation (NNPC) has, on various occasions, released statistics showing the havoc the vandals cause.

    A report said between August and October 2012, the NNPC System 2B pipeline transporting petroleum products recorded 774 break points from Atlas Cove to Ilorin.

    The report said there were 118 break points to Mosimi; 421 ruptured points from Mosimi to Ibadan; 50 vandalised points from Mosimi to Ore and 122 break points between Ibadan and Ilorin.

    The effect is that conveying petroleum products across the over 5,000km of vast network of pipelines has become a nightmare.

    The attendant dangers has not stopped the perpetrators. There have been a series of pipeline explosions that have claimed hundreds of lives and destroyed properties worth millions of naira.

    In May 2006, about 150 people died at Abagbo Village, Eti-Osa Local Government Area (LGA), while scooping petrol from a vandalised pipeline.

    Forty- three others were given mass burial in the same area in 2007, as a result of pipeline explosion caused by vandals.

    Similarly, scores of Nigerians, including women, children and the aged, were reportedly killed in different explosions, while scooping fuel from a vandalized pipeline in Arepo.

    In its quest to address the menace, the Federal Government has constituted a taskforce on petroleum monitoring which includes men of the Armed Forces, the Police, Nigerian Security and Civil Defence Corps (NSCDC), to guard pipeline areas and arrest illegal bunkerers and vandals. But this seemed not to have yielded much fruits as the illegal activities increase daily with the perpetrators getting deadlier.

    The security agencies have also been accused of conniving with the vandals to steal oil. Where vandals have been arrested, no one has ever heard of a successful prosecution or conviction of the criminals to serve as deterrent to others.

    This is despite the fact that Chapter 353 of the Laws of the Federation, 1990, provides for a maximum of 21 years in prison for anyone convicted of pipeline vandalisation or oil theft.

    There is also the Petroleum Production and Distribution (PDD) (Anti-Sabotage) Act of 1975. Could it be that these laws are not stringent enough? Will death penalty stem vandalisation of pipelines?

    Lawyers, who spoke on the issue, noted that such vices are the least of Nigeria’s challenges. They called on the legislator to rather make corruption a capital offence. They accused the government of insensitivity to the plight of the citizens, which has left vulnerable and unemployed youths with no other option than to fend for themselves.

    Although they described pipeline vandalisation as a heinous economic crime that deserves stringent sanctions for offenders, the lawyers blamed the government for non-enforcement of existing laws on economic sabotage.

    They differed on the recommendation of death sentence for oil thieves and vandals by Mark. Some of them maintained that such laws were already in existence but underutilised.

    Those who spoke on the issue included Senior Advocate of Nigeria (SAN) Norrison Quakers; constitutional lawyer Dr. Fred Agbaje; Lagos based lawyers Dr. Frederick Banjoko and Ebun-Olu Adegboruwa and Chairman, Nigerian Bar Association (NBA), Ikorodu Branch, Sahid Owosile.

    Quakers said the statement accredited to the Senate President was “borne out of emotion and concern for the plundering of our common wealth as a nation and as a people”, just as he noted that death penalty will not address the problem.

    ‘‘Many Nigerians at the top echelon of the military, government and private individuals are involved in plundering our common wealth with impunity, bearing in mind that the various laws in the petroleum sub-sector such as: The Petroleum Act 1969; Oil Pipeline Act 1956; Oil & Gas Pipelines Regulations 1995, among others, regrettably, do not provide or carry heavy penal sanctions.

    ‘‘Section 4(1) of the Petroleum Act Cap P10 1969, says a person must obtain licence from the Minister to sell, store or distribute any petroleum product in the country. Then 4(6) went further to provide a penalty upon conviction, of two years in prison or a fine of N2,000 or both as well as the forfeiture of the petroleum products in respect of which the offence was committed. The same thing applies for Section 13(2)(b)(iv) of the Petroleum Act, which provides a fine not exceeding N2, 000 for any person who acts without the appropriate licence.

    “Section 26 of the Oil &Gas Pipeline Regulations, 1995, provides for the punishment for any person who contravenes the regulation on pipeline building. Such an offender will be liable upon conviction to a fine up to N500, 000 or imprisonment for a term of six months or to both fine and imprisonment.”

    Quakers said the provisions of Sections 4, 6 and 13 of the Petroleum Act, 1969, were not strict enough and adequate to tackle oil bunkering and pipeline vandalisation compared to the higher sanction for failure to build a pipeline in line with the laid down regulation as provided for in Section 26 of the Oil & Gas Pipeline Regulations.

    “Although there have been talks from all sides that death penalty should be imposed on offenders involved in bunkering and vandalism, I am of the view that such provision would not deter the offenders from continuing with these acts. I agree to an extent that stricter punishments should be meted out such as life imprisonment and forfeiture of wealth amassed or acquired from illegal bunkering activities, if the government will be courageous enough to stamp its authority in imposing stricter sanctions on persons found liable regardless of how highly placed they are.

    “The thought of being locked up for a long time in the prison should help in curbing pipeline vandalism. Proactively, proper surveillance machinery should be put in place and monitors connected to a central computer system should be used in detecting any leakage or bust on any of the pipelines in the country. Once this is in place, any form of tampering will be immediately and easily detected and proper actions taken to prevent the destruction from escalating to a disaster.

    “Pipeline vandalisation and oil bunkering are also financial crimes because they rob the state of its resources. They should be treated as economic crimes and the Economic and Finance Crimes Commission (EFCC) by its enabling Act is empowered to investigate and prosecute before courts of competent jurisdiction such persons or offenders.

    “As we have always maintained, there are enough laws covering the field, and as a country we must never appear to be helpless if only our enforcement and prosecutorial agencies will step up to their responsibilities in the face of clear and unambiguous enabling legislations which can be deployed conjunctively in stemming the tide of illegal bunkering which has also encouraged foreign participation,’’ Quakers said.

    Agbaje noted that the Senate President in the recommendation said nothing new. He added that there was a legislation under the Laws of the Federation, 1990, that provides for death penalty or a prison term of not more than 21 years for pipeline vandals.

    He blamed the government for the under utilisation of the PPD (Anti-Sabotage) Act of 1975, blaming the connivance of the various agencies as well as the lack of political will by the government for the upsurge in vandalism.

    ‘‘With due respect to the Senate President, he has not said anything new by recommending capital punishment for oil thieves and pipeline vandals. What he said is in consonance with what the PPD Act says. So, it was an oversight for him to repeat what has been provided for in the law.

    ‘‘His recommendation is borne out of verbosity. In as much as he has reminded Nigerians that oil thieves constitute economic sabotage and deserve the heaviest capital punishment, he must also be reminded that we also need death penalty for looters of treasury, particularly political office holders and top civil servants, who have nothing else to do but loot us dry. And such death penalty must start now.

    ‘‘That is the only way the recommendation of the Senate President can be meaningful to average Nigerians. As far as I am concerned, the law is adequate. I am in total agreement with that law because the activities of these vandals, who are highly connected, are affecting our general interest.

    ‘‘My worry is not with the law but its under utilisation. If the provision of the PPD Act has been followed, with one or two people convicted and executed, others would have learnt their lessons.

    ‘‘But the government has not shown any activism towards the fullest implementation of the petroleum laws. In spite of the series of pipeline vandalisations and arrests of suspects, how many convictions have been secured?’’ He queried.

    According to Agbaje, the government has been engaged in media ground standing as against effective prosecution of vandals. He said because there is a liturgy by the government as well as a growing connivance between suspects and the relevant agencies that is why pipeline vandalism has thrived.

    “An example is what happened recently at Ikorodu, where members of the Nigerian Security and Civil Defence Corps (NSCDC) allegedly arrested some vandals, only for the police to go there and kill NSCDC men and by so doing, freed the vandals.

    “Government must show seriousness in the arrest and prosecution of oil thieves including the very highly placed ones. I agree that most judges may not want to deliver death sentences on criminals when they have alternative options, but even 21 years in prison as provided by the PDD Act is enough punishment for anyone convicted of the offence,” Agbaje said.

    To Banjoko, there is no aversion to such a proposal if it is intended to discourage the growing dangerous practice which has caused havoc to the nation’s resources. He noted that the penalty for such crime is death in the country’s statute.

    He said: ‘‘I do not know if such crime does not already attract death sentence in the nation’s statute. It amounts to economic sabotage, and I believe it should attract capital punishment. Honestly people should be discouraged from acts capable of crippling the nation’s economy.

    ‘‘The state should also learn from this that it arises from an aversion to the current unjust distribution pattern of the national wealth. Today, the few in the corridor of power enjoy the national wealth more than the rest of us outside. There should be a change of tactics. Corruption in public space should be tackled.

    ‘‘Mark and others, who have been in the corridor of power for decades, should be ashamed that fraud and corruption are still common among public office holders.

    ‘‘Mark and others should know that laws, on their own, do not effect necessary changes, but the willingness of the people to appreciate the justice behind the law.

    ‘‘The Senate President and others cannot continue to enjoy the benefit of a system that shut the poor majority out from benefiting from the national wealth and yet want them to be subjugated by mere enactment of laws.

    ‘‘What I am saying is that politicians and public officers should change from their greedy and kleptomanic nature. It is only then that we can begin to agree that those who seek to help themselves to the national wealth through any means, illegal bunkering inclusive, are truly enemies of the state, and hence should be classified as economic saboteurs,’’ Banjoko added.

    Owosile described the recommendation as taking the country backward. He insisted that the problem was not the existing laws but the enforcement of such laws. The NBA chairman disagreed with the death penalty recommendation, noting that it won’t yield positive result.

    ‘‘It is like going back in time. Let us appreciate one thing, Law is culture. In our own society, our morality surpasses our legality. That is why, often times, when punishment is too high, the deterrence expected does not come because nobody wants anybody to die.

    ‘’At the end of the day, it won’t work. We have gone past the period of death sentence. You remember the case of Bartholomew Owoh and the rest of them in 1984. That incidence was a big smear on the administration of General Muhammed Buhari and General Tunde Idiagbon because at that time it was military fiat and they exercised their fiat to kill those people, which backfired.

    ‘‘Why should anybody take us to that level again? It is not fair. It is not proper. The world is shifting from absolute deterrence to subtle jail term. So how can we go back to death sentence? And all these talk about subsidy fraud, they are not sincere about them, they are not at all. The laws that are existing; how have they enforced those ones before talking about death sentence? I do not agree with them at all,’’ he said.

    Adegboruwa said death penalty in any part of the world can never be deterrence to criminal activities. ‘‘In Nigeria today, offences like murder, armed robbery, coup, or mutiny carry death penalty, but till date, armed robbery is on the increase. Abating oil theft is not a matter for sentences and convictions. Those involved in illegal oil bunkering are mostly beyond the law because they are highly placed.

    ‘‘Empty legislations will not curb incidence of illegal oil bunkering, unless there is the will power by the government to clamp down on the powerful oil thieves. The remedy to a crime of such nature would be to strengthen existing institutions, such as the Nigeria Maritime Administration and Safety Agency (NIMASA) and the Nigerian Navy, to monitor and regulate bunkering.

    “It is common knowledge that most of these big oil thieves utilise the proceeds of their illegal acts to even fund campaigns and elections of some political big-wigs. So, the fight should begin from empowering the requisite institutions, which will in turn put up resistance to the activities of these dubious Nigerians. Their duties must, however, be carried out without interference,” Adegboruwa said.

     

  • New Petroleum Industry Bill: An analysis

    New Petroleum Industry Bill: An analysis

    Section 195 states grounds for revocation of licence, ss (1) states that the Minister on recommendation of the Inspectorate may revoke a licence or lease under certain circumstances. The Minister is empowered amongst others to; revoke a licence or lease where it has been obtained or acquired on the basis of false representations or corrupt practices or where it is owned or controlled by a former or present public officer who has obtained the licence or lease through misuse of public office.

    Issues: These are far reaching provisions to check corruption and sharp practices in the industry, They give the Minister total powers to revoke a licence or lease in the circumstances stated there under. However section 196 allows for representations to be made to the Minister following revocation. It appears that the Minister has the final say and that there is no right of appeal from the decision of the Minister. This may lead to abuse of office by the Minister.

    Protected Objects – Sections 198 and 199: Two novel provisions on protected objects are created. They state that compensation is payable where there is damage or injury to a tree or object which has commercial value.

    Environmental quality management – Section 200: Ss (1) provides that “every licensee or lessee engaged in petroleum operations shall within one year of the commencement of this Act or within three months after having been granted the licence or lease, submit an environmental management plan to the Inspectorate for approval. ss(2) states that “the environmental management plan shall contain the licensee’s or lessee’s written environmental policy, objectives and targets and commitment to comply with relevant laws, regulations, guidelines and standards.

    Issues: This is a welcome provision in view of the reckless conduct of some operators in the industry who do not have a vibrant environmental management plan or an effective system for expeditious remediation.

    Financial contribution for remediation of environmental damage – Section 203: Ss (1) states “as a condition for the grant of the said licence or lease and prior to the approval of the environmental management plan by the Inspectorate, every licensee or lessee shall pay the prescribed financial contribution to an environmental remediation fund established by the Inspectorate….”

    Issues: This is a welcome development given its obligatory nature and will ensure early remediation of damage to the environment.

    National Strategic Stock – Section 225: Ss (1) states that “the Agency shall administer and ensure compliance, distribution and storage of the National Strategic Stocks of petroleum products in accordance with regulation set by the Minister on the advice of the Agency.

    Issues: This will enhance security of supply and check scarcity of petroleum products arising from irresponsible conduct of some marketers and agencies.

    Offences and penalties for damage to infrastructure, plant or equipment belonging to a downstream products or gas licensee including but not limited to fittings, meters and equipment – Section 265: It states that any person convicted of intentionally committing an offence is liable to a penalty not exceeding one hundred million naira as well as reimburse the licensee for any petroleum products or gas illegally taken and for any damage to the licensee’s equipment. ss (2) (1) provides that where such a convicted person is unable to pay the penalty or reimburse the licensee, he or she or officer of the company shall be liable to imprisonment for a period of not less than two years and not more than five years…

    Issues: This provision with its stiff penalty will send a clear message to arsonists and other similar minded people who engage in reckless destruction of property.

    Domestic Gas Supply Obligation – Section 269: Ss (1) states: “The Inspectorate shall regulate the sector in accordance with the National Master Plan for Gas (National Gas Master Plan)

    Issues: This provision will ensure government’s continued interventionist approach in the domestic gas market to boost local production. An obligation is placed on holders of PML to produce a certain percentage of gas as part of their operations, the overall effect is increased production of domestic gas which will meet demand for all the strategic sectors especially for power generation, a penalty is prescribed for failure to meet the obligation. This again is in line with international practice.

    Gas Flaring (Prohibition and Punishment): Section 275: It states that natural gas shall not be flared or vented after a date to be prescribed by the Minister … in any oil and gas production operation, block or field, onshore or offshore, or gas facility e.g processing treatment plant with the exception of such permits granted under section 253 (1) (b).

    Issues: The language of the law is total prohibition subject to exceptions with stiff penalties for non compliance, the requirement for a gas utilisation plan will ensure that natural gas which is produced in the course of oil production is utilised or re injected. Oil producing communities are enjoined to report incidents of gas flaring to the Inspectorate. It is expected that these measures will finally end the ugly and illegal practice of gas flaring which has caused extensive damage to the environment. It is suggested that fixed penalties be introduced.

    Compliance with environmental health and safety laws Section 290: Every company engaged in any activities for which a licence, lease or permit is issuable in upstream and downstream sectors of the petroleum industry in Nigeria, to comply with all environmental health and safety laws, regulations, guidelines and directives as may be issued by the Ministry of Environment or the Inspectorate.

    Issues: There is an obligation on all operators to observe and comply with all environmental laws and regulations adopting a precautionary approach. A duty is placed on them to restore the environment as far as is practicable in the event of damage save where such damage is caused by an act of sabotage. The Inspectorate is empowered to determine whether damage is an act of sabotage where there is doubt, however this may not be an easy process given that the resources to monitor operations closely may not always be available leaving a loop hole for operators to attribute every damage especially oil spills to acts of vandalism or sabotage. Section 272 provides for compensation in the event of damage but does not make a clear stipulation on the quantum of damages which again leaves a gap in the law.

    •Ms Obua, a solicitor with over 20 years experience, is from the University of Dundee. She practices in the UK and also a partner at EN&N Legal Practitioners Victoria Island Lagos and can be reached at efuru@ennlawfirm.com/ eobua@hotmail.com