The Nation Newspaper

Tag: Petroleum Industry Governance Bill

  • FG fully committed to passage of PIGB, says Osinbajo

    Vice President Yemi Osinbajo on Monday said that  the presidency was closely working with the National Assembly for the quick passage of the Petroleum Industry Governance Bill (PIGB).

    Osinbajo said this during his keynote address at the 18th international HSE Biennial conference, organised by the Department of Petroleum Resources (DPR) in Lagos.

    According to him, “ we are working closely with the National Assembly to ensure its timely passage.’’

    He said that the reforms proposed in the PIGB “reflects our collective desire to entrench transparency and sustainability of oil and gas operations in Nigeria to enable the country finally to realise the full potential of her hydrocarbon resources’’.

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    He said: “I am pleased to bring you the warm greetings and felicitations of President Muhammadu Buhari on this occasion of the opening ceremony of the 18th International Health Safety and Environment (HSE) Biennial Conference.

    “It is noteworthy that the theme of the conference, which is centred around sustainability, dovetails seamlessly with this administration’s vision and policy for the Oil and Gas Industry as a vehicle for driving the industrialization and growth of the Nigerian economy in a transparent, responsible and sustainable manner.

    “ As a gathering of all stakeholders in the oil and gas industry, I am confident that your deliberations will yield important policies and ideas that will guide government in the formulation of policies for achieving sustainable development of our oil and gas resources.

    “`It will also serve as a model for our other extractive industries that are not yet as mature,’’he said.

    The Vice President said that no discussion about the future of the Oil and Gas could  be divorced from the Petroleum Industry Bill (PIB) which represents the most ambitious and comprehensive reform in decades of the oil and gas industry in Nigeria.

    Osinbajo noted that though  varied reactions had trailed Mr President’s recent decision to return the Petroleum Industry Governance Bill (PIGB) to the National Assembly for slight amendments.

    He, however, noted that resolving the security challenge in the Niger Delta remained on the front burner of this administration “as we seek to create a peaceful business climate that will attract investors and bring massive development to the oil producing communities”.

    He said that government was sensitive to the genuine agitations of the host communities for greater participation in and control of oil and gas resources.

    The Vice President noted that the law and order element to the problem had to be tackled headlong to allow for a peaceful business environment.

    “The proposals in the host community bill currently undergoing review represent a paradigm shift in the relationship between oil and gas operators and their host communities.

    “And the government in collaboration with state government and other stakeholders is fully committed to comprehensive reforms that empower the communities and move them from stakeholders to actual shareholders and partners in the oil and gas business.

    “This will result in the formulation of a comprehensive livelihood strategy and development plan for the Niger Delta to complement the efforts of the various interventions by the Federal Government though the Niger Delta Ministry (NDDC) and the amnesty programme.

    “The Federal Government’s commitment to the ease of doing business was reflected in the Executive Order 1 signed on May 18, 2017.

    “The order had five main planks including: Transparency; Default Approvals; One Government; Port Operations and Entry Experience of travelers and visitors. As the mainstay of the Nigerian Economy, there is a dire need for ease of doing business in the oil and gas sector.

    “The current regime of multiple and sometimes conflicting regulators/regulations is a serious drawback on the ease of doing business in the petroleum industry.

    Read also: British envoy urges NASS to pass PIB, Gender Bill, others

    “While we continue to seek to resolve these conflicts, using the instrument of law, I wish to remind the various agencies and ministries of their primary responsibility to promote efficient service delivery and serve as the engine room for driving the collective policy of “one government”.

    “I therefore enjoin all the conflicting agencies to close ranks, fine-tune and improve cooperation and document their resolutions in binding MOUs that will ease the burden of over-regulation of the oil and gas sector,’’ he said.

    Osinjo said: “I am also pleased to announce to this gathering of Environmental experts that the government has fully commenced the clean-up of impacted oil spill sites in the Niger Delta.

    “This is a massive undertaking that reflects the government’s commitment to restoring livelihood in the Niger Delta and deserves the support of all Nigerians.’’

    The vice president, however, appealed to the host communities to assume greater and more responsible stewardship of oil and gas infrastructure in their communities even as the government worked to incentivise their efforts through the host community bill. (NAN)

  • PMB, reconsider decision on PIGB

    SIR: The Africa Network for Environment & Economic Justice, ANEEJ, is dismayed and bewildered at President Buhari’s decision not to sign the Petroleum Industry Governance Bill, PIGB, into law. We urge him to reconsider his stance in the interest of Nigerians.

    Presidential assent to the PIGB was withheld on the grounds that what has been permitted as accruals to the petroleum commission has the tendency to reduce what then gets to the three tiers of government. In addition, there are concerns within the echelons of power that expanding the scope of petroleum equalization fund conflicts with provisions on independent petroleum equalization fund.

    These are tenuous reasons being adduced for the President’s refusal to sign this bill.  We believe that rather than dwell on the technicalities inherent in the bill, the President needs to rise up to the occasion and do the needful by exploring other ways and means of resolving these technicalities than an outright dissent. If the bill will effectively checkmate the three tiers of government from the habit of going cap hand to Abuja to pick up monthly handouts from the centre so be it.  In all of the 17 years wherein the bill has been with the legislature, it has been so balkanized and scrutinized to the extent that it has nearly lost of all its substance and relevance.

    The broad overview of the Petroleum Industry Bill was essentially to give the Nigerian people ownership of a key extractive sector of the Nigerian economy. The Bill also sought to take into consideration the interests of the local communities that have suffered despoliation, pollution and degradation because of the activities of multinational companies in Nigeria.

    Recall that another bill, the Freedom of Information, FOI, also suffered same kind of fate until eventually passed in 2011. Its state today is a product of the many unfortunate reviews it passed through, and which led to the several lacunas inherent in it.  For the PIB not to suffer the same fate as the FOI, we implore President Muhammadu Buhari to set up an extraordinary committee involving stakeholders to resolve issues related to the fears concerning accruals. We are persuaded that withholding assent after a bill has been debated and reviewed for 17 years ordinarily pits the president against the Nigerian people and presents him in egoistic terms. Conflicts are resolvable and perceived conflicts related to provisions of an independent equalization fund are resolvable and cannot be the basis for the president to refrain from signing a forward-looking a bill as the PIGB into law.

     

     

    • Rev David Ugolor,

    ANEEJ, Benin City.

     

     

     

  • Sign electoral act, PIGB now, ADP asked Buhari

    The Action Democratic Party (ADP) has asked President Muhammadu Buhari to immediately ascent to the amended Electoral Act without further delay too gives legal backing to the 2019 general elections.

    The party also asked the President to immediately sign the Petroleum industry Governance Bill, saying the delay in signing the both bills was rather unfortunate and against the national interest.

    In a resolution at the end of the National Executive Committee meeting of the party, the ADP also told the Independent National Electoral Commission (INEC) to ensure that the forthcoming governorship election in Osun State was free, fair and credible.

    The ADP said it will not accept the charade that took place in Ekiti in the impending Osun Governorship election, adding that measures must be taken to tackle issues such as Vote-buying, ballot-box snatching and Violence.

    It said that the party shall neither condone nor accept elections that fall short of globally accepted standards, adding that INEC should embark on early preparations to ensure that acceptable elections are held in 2019

    It said “The federal Government must decisively tackle high unemployment and inflation rates which have become common features of our economy.

    “That ADP vehemently frowns at the pervasive insecurity in the Country and calls on Government to secure life and property which remains the primary responsibility of every government.

    Read Also: Why Buhari withheld assent to PIGB

    “It is regrettable that Mr. President has refused to ascent to the Petroleum industry Governance Bill”.

    Addressing the meeting earlier, National Chairman of the party, Engr. Yabagi Sani said that Nigeria is at cross roads and that the current leadership in the country is unprepared to steer the ship of state successfully.

    He said, “The economy is in the doldrums with inflation and unemployment rates hitting at the roofs. There is pervasive insecurity as Nigerians now live in perpetual fear.

    “The ADP is determined to change the narratives and navigate a better future for our people. Furthermore, the conflict between the National Assembly and the Executive is taking toll on the capacity of government to meet the aspirations of the people”.

  • Expert to govt: avoid Venezuela’s oil resource management failure

    A Expert have advised the Federal Government to learn from the oil resource management failure which has brought woes to Venezuela.

    Speaking at a roundtable on the Petroleum Industry Governance Bill (PIGB) organised by Centre for Financial Journalism in partnership with Facility for Oil Sector Transformation, a DFID-funded programme, in Lagos, a petroleum industry lawyer, Mr. Israel Aye said the Venezuelan oil sector failed despite having the world’s largest hydrocarbon reserves.

    He said the problems with the Venezuelan oil management style are resource nationalism, hubris, lethargy and comatose oil economy.

    Aye,  who is the senior partner at Primera Africa Legal, noted that hubris as displayed by Nigeria in its two-D approach to the sector management, adding that it is gradually driving the country towards ‘Venezuelan cul-de-sac’.

    He said the approach is hinged on state control and investment from foreign investors whereas a three-D approach is based on the state, investor and competition.

    Aye observed that because the oil and gas sector has yet to witness the necessary reforms, the country has not experienced the benefits of an oil-powered economy.

    “Nigeria, unfortunately, does not operate an oil economy but an extractive industry.”

    To address a country as an oil economy, he said,  is when the entire value from the petroleum value chain is explored and maximised in-country and used to power other sectors for the benefit of its citizens, citing Norway and United States as examples.

    He maintained that the tendency to dismiss the call for improvement in the oil sector by calling for departure from or a diversification away from the sector simply begs the question. This is because the revenue, which Nigeria makes from the oil industry, is what some have called, “easy money” that can be used to power the economy towards genuine diversification just like the American economy.

    But this easy money is unfortunately mismanaged or diverted for non-productive purposes in contrast to other nations that used such “easy money”to power and diversify their economy, he said.

    Examples are Norway, Scotland, The Netherlands and others around the North Sea. “Nigeria is mismanaging this resource; and so we are pushing ourselves to the brink of a crisis. Indeed the oil economy in Nigeria is in crisis”.

    He argued that because Norway runs a better oil and gas economy, in the last 20 years, it has succeeded in accumulating an excess of $1 trillion in its Sovereign Wealth Fund (SWF).

    “The gains are due to good management of their oil resource,”he said.

  • Petroleum administration bill to aide deregulation of sector

    Senate President, Abubakar Bukola Saraki, on Monday said that Petroleum Industry Bill (PIB) will provide legal backing for the deregulation of downstream petroleum sector.

    He also said that the three new PIB considered by the Senate will boost economic growth and lead to a more efficient oil sector that is globally competitive.

    Saraki stated this while inaugurating a three-day public hearing on the PIB organized by the Senate Joint Committee on the PIB in Abuja.

    The Senate President said the three bills under consideration would have tremendous impact on the economy and investment opportunities when passed into law.

    The bills under consideration included the Petroleum Industry Administration Bill 2018, Petroleum Industry Fiscal Bill 2018 and the Petroleum Host and Impacted Communities Bill 2018.

    The Senate recently passed the Petroleum Industry Governance Bill (PIGB) which is now before the Conference Committee of both chambers for harmonization.

    The objective of the Petroleum Industry Administration Bill, Saraki said, is to transform the administration of the upstream, midstream and downstream sectors of the country’s petroleum industry.

    He said: “Firstly, the Bill creates a framework that will free up acreages that are not being developed by current license and lease holders, thereby creating opportunities for new investors. This will bring substantial new investment to our oil and gas industry.

    “Secondly, it ensures effective management of the environment by petroleum operators and administrators.

    “Thirdly, it provides a framework to unleash midstream activities which will open up the market for the supply of gas and other downstream products, for economic growth. Above all, I believe the most important feature of this Bill is that it provides much needed legal backing for the deregulation of our downstream petroleum sector.”

    He said that the Petroleum Industry Fiscal Bill, aims to fix the anomalies in the nation’s existing fiscal framework for the petroleum industry which is outdated, especially with regards to royalty and tax regimes.

    He said, “For instance, billions of dollars have been lost through non-invocation of provisions in subsisting laws, at those times when crude oil price crosses certain thresholds.

    Read Also: Buhari yet to get petroleum bill, says Presidency

     “The Bill will fix this as well as remove difficulties and uncertainties surrounding our tax assessment and collection system.

    “Additionally, it will remove distortions created by the Associated Gas Framework Agreement; and provide comprehensive fiscal terms for the development of our abundant natural gas resources.

    “Perhaps the most critical objective of the Petroleum Industry Fiscal Bill is that it will enhance our international competitiveness and make Nigeria a choice destination for oil and gas investors.”

    Saraki noted that the Petroleum Host and Impacted Communities Bill, according to him, provides for a legal framework for the development of the petroleum host and impacted communities.

    He said, “It is a pan-Nigeria Bill that will cater for communities that are hosts to upstream assets, as well as significant midstream and downstream assets and infrastructure.

    “The Petroleum Host and Impacted Communities Bill is unique because it overcomes the pitfalls of past efforts; and is structured to bring funding for the development of host communities, under the direct control of the communities themselves.

    “We expect the Bill to make for greater harmony and partnership among the various stakeholders in the sector. I urge everyone to pay particular attention to presentations by representatives of host communities,” he said.

    The Bills, he said, are critical to the growth of the nation’s economy, the livelihood of all Nigerians and the interests of investors.

    He said, “We have the task of delivering these Bills which, together, will enhance the growth of our oil and gas industry, modernize our fiscal system and enhance competitiveness, while creating harmony for all stakeholders.”

  • OPS decries effects of bad Apapa roads on businesses

    OPS decries effects of bad Apapa roads on businesses

    The Organised Private Sector ( OPS )  has urged the Federal Government to find a lasting solution to the problem of bad access roads to Apapa ports in Lagos which is affecting the cost of businesses.

    The OPS spoke on Wednesday at a conference in Lagos on the Petroleum Industry Bill and the impact of bad roads in Apapa on businesses.

    The OPS comprises Nigeria Employers’ Consultative Association ( NECA ), Manufacturers Association of Nigeria ( MAN ) and the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture ( NACCIMA ).

    The others are the National Association of Small and Medium Scale Enterprises ( NASME ) and the National Association of Small Scale Industries ( NASSI ).

    Mr Segun Oshinowo, Director-General of NECA, said many companies would close shop if Apapa roads remained bad.

    “The OPS is concerned about access roads to the Apapa ports. It is affecting overhead costs of businesses of  our members.

    “Preventable accidents as a result of the bad roads lead to huge loss of revenues; loss of jobs and closure of businesses. This will further worsen trade facilitation,’’ Oshinowo said.

    He advised the government to create alternative roads, put measures in place to free traffic and proffer lasting solutions to gridlocks in Apapa.

    On the Petroleum Industry Bill, Mr Segun Ajayi-Kadiri, Director-General of MAN, advocated creation of two regulatory bodies for the petroleum industry as against one body recommended in the Petroleum Industry Governance Bill ( PIGB ) before the National Assembly.

    Ajayi-Kadiri said that there was the need to avoid “costly mistakes’’ that could work against reforming the sector.

    Read also: Fed Govt to shut depots over Apapa gridlock

    According to him, one of such mistakes is a provision in the PIGB for a single regulator for the industry.

    He said that two regulatory bodies – one for the upstream and another for the downstream – would serve the sector better.

    “A cursory look at some of the provisions of the PIGB revealed the likely emergence of the Petroleum Regulatory Commission (PRC) – an omnibus commission that will be empowered to regulate the entire petroleum sector.

    “We do not share the view of the Assembly on creation of a regulator for a sector that is not homogenous in its activities and deliverables.

    “The idea of a single regulator for the whole sector runs contrary to industry standards which by default already provides for an upstream and downstream regulator, ‘’ Ajayi-Kadiri said.

    The director-general of MAN said that the responsibilities of the proposed commission was too wide as it cut across various value chains in a key sector of the economy.

    He commended the National Assembly for taking steps to reform the petroleum industry through the PIGB, and called for accelerated actions.

    NAN

  • Nigeria oil and gas provide investments in excess of $50bn – Kachikwu

    Nigeria oil and gas provide investments in excess of $50bn – Kachikwu

    Minister of State for Petroleum Resources, Dr Ibe Kachikwu, said economic growth plan recently launched by Federal Government would provide strategic and economic partnerships in excess of 50 billion dollars.

    Kachikwu said this on Tuesday while wooing investors at an event organised in Houston, U.S., by the Nigerian Content Development and Monitoring Board (NCDMB).

    He said: “the Federal Government of Nigeria has launched a National Economic and Growth Plan for the next four years.  This is anchored on the Nigeria Oil and Gas Roadmap among other sectoral roadmaps.

    “This roadmap presents exciting opportunities for financial and strategic partnerships in excess of 50 billion dollars (about N1.58 trillion).

    “About 13 billion dollars -17 billion dollars will go to the upstream for the development of upstream gas fields with a total of 37.4 trillion cubic feet.

    “Fourteen billion dollars -17 billion dollars will go to the Trans-Nigeria gas pipeline project, gas revolution industrial park at Ogidigben and three power plants for additional 3.2 GW capacity in the gas and power sector”.

    He added that 2.5 billion dollars – 5 billion dollars will be invested in licensing and establishment of modular refineries, collocate refinery within Kaduna Refining and Petrochemical Company (KRPC) and rehabilitating/upgrading the three refineries.

    “In the downstream sector, about 3 billion dollars – 3.9 billion dollars will go to revamping of liquefied petroleum gas, building of new Compressed Natural Gas plants across the country and to pipeline and storage tank constructions.

    “In addition, 0.7 billion dollars – 1 billion dollars will be invested in ventures such as equipment leasing, development of multi-specialist hospital and cancer diagnostic and treatment centres,” he stated.

    Kachikwu assured investors on President Muhammadu Buhari’s stance that he would ensure that under his watch, the “old’’ Nigeria would slowly disappear while a new era would arise.

    He also assured them of security and the new ease of doing business in Nigeria, adding that government had made progress on reforms in the sector.

    “Part of progress made are the new policies and regulations like the new oil, gas and fiscal policies that are being developed and syndicated with all stakeholders and the Petroleum Industry Governance Bill.

    “The Bill will be passed by National Assembly before end of the second quarter.

    “It also includes business environment and investment drive, gas revolution including the gas flare commercialisation programme where investors are invited to submit detailed project proposals by end of May.

    “Private sector-led revamp for refineries being pursued and framework for new Greenfield refineries, including modular refineries in place, and Niger Delta security and transparency and efficiency,” he said.

    The minister said that the outcome of the meeting would be aligned to projects and funding opportunities, preliminary discussion on areas of potential collaboration and broad alignment on funding options.

    The Executive Secretary of the NCDMB, Mr. Simbi Wabote, in his address said that his desire was not to hold events but “to follow through on whatever decisions are made from such meetings to ensure development eventually”.