The Nation Newspaper

Tag: petroleum industry

  • Petroleum industry gets 95 per cent nuclear licences

    The Nigerian Nuclear Regulatory Authority (NNRA) yesterday said 95 per cent of the nuclear licences it has issued are for the petroleum industry.

    Its Director-General, Prof. Lawrence Dim, who spoke to reporters said although other industries such as the beverage, breweries and paper mills also use nuclear materials, the oil and gas industry deploys nuclear materials heavily for well-logging and radioactivity.

    Represented by the Director, Radiological Centre, Prof. Timothy Akpan,  in Abuja during the opening ceremony International Atomic Energy Agency (IAEA) African Regional Coordination meeting to assess progress on leadership management in nuclear regulatory bodies,  he said: “Right now, oil industries in Nigeria requires inputs from nuclear, even the Coca-Cola industry, breweries, papers and all other. They are being used in almost all industries in Nigeria mostly in the oil and gas industry. We have well-logging, we have radioactivities going on in the oil industry.

    “Like the petroleum industry is the greatest consumer of nuclear materials. In Nigeria presently, about 95 per cent of all the recorded licenses we have in the NNRA are from the oil and gas industry.”

    On the adoption of nuclear energy in the country, the Director-General said the building of a nuclear power in the country is not a simple one.

    He however added that there are different hurdles for the country, stressing that “Nigeria has not been a nuclear country.”

    Dim said: “I think what is stopping the inauguration of the nuclear power is the question of who should run it. From time to time, there are some milestones being set up which Nigeria has to cross, which is not too easy because Nigeria has not been a nuclear country.”

    The NNRA chief explained that the African Regulator Conference was established by IAEA in consonance with other regional bodies to oversee radiation protection and nuclear safety in Africa.

    According to him, the conference is for self-assessment for nations doing very well to work with other nations to meet up with the IAEA standards.

    The agenda of the conference, he said, was to include the implementation of a regulatory framework in the entire Africa.

    The review is to look at the performances of the different regulatory bodies to make sure that they come up at par for the continent to advance simultaneously in terms of nuclear regimes.

    He said besides the African countries in the conference, other non-African countries were in attendance.

    Speaking with reporters, the chairman of the Local Organising Committee (LOC) Adamu Husseini  said 23 countries attended the conference out of the 26 that were expected.

     

  • OPS, oil marketers fault PIGB’s single regulator for petroleum industry

    •Seek separate independent regulators for upstream, downstream

    The Organised Private Sector (OPS) and oil marketers have faulted the provision of a single regulator, Nigerian Petroleum Regulatory Commission (NPRC) in the Petroleum Industry Governance Bill (PIGB) by the National Assembly.

    At joint press briefing in Lagos yesterday by the OPS represented by the Chairman, Economic Policy Committee, Manufacturers Association of Nigeria (MAN), Mr. Odiah Reginald Odiah, Major Oil Marketers Association of Nigeria (MOMAN) represented by its Executive Secretary, Mr. Obafemi Olawore and Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) represented its Executive Secretary, Mr. Olufemi Adewole, the groups said they have carefully gone through the PIGB and noted the provision of a single regulator  in the Bill would be counter-productive and keep Nigerians and the economy in same problems we experience today in the oil and gas industry.

    According to them, it has become imperative to point out this problem before the Bill gets presidential assent as they learnt the Senate and the House of Representatives have harmonised their positions on it. To them, creating one regulator for the upstream and downstream sectors of the petroleum industry will be too big or humongous and the regulator will become ineffective.

    They said: “We need the National Assembly to create two regulatory bodies or agencies that will be independent, one for the upstream and one the downstream. At the beginning of Nigeria’s oil industry, it was only one regulator that existed, the Department of Petroleum Resources, and it was not able to properly and efficiently regulate the industry, hence the creation of the Petroleum Products Pricing Regulatory Agency (PPPRA) and the Petroleum Equalization Fund (PEF).

    “Besides, upstream and downstream are completely different but have petroleum in common. Upstream is relatively quiet even though the work there is enormous and has little to do with Nigerians domestically. But in downstream, every Nigerian is involved either as consumer or petrol station owner, among others. Therefore, to have one regulator to supervise it will cause too much bureaucracy, tardiness and undue cumbersomeness in the oil and gas operations as witnessed currently.

    “We need two regulators that are effective, have speed, efficiency and the required staff to focus properly on each segment of the sector to tackle their responsibilities. Having one regulator will be detrimental to the economy. Therefore, we would like the National Assembly to look at the regulator aspect of the Bill again and involve all stakeholders.”

    While the marketers said they participated in the public hearing of the Bill and recommended separate and independent regulator each for the upstream and downstream of the industry, Odiah noted that MAN didn’t participate in the public hearing because their members were not well informed about it but only saw the passed bill. Ever since we have been warning about the dangers of having one regulator for the industry, he added.

    They also noted the importance of adding the various stakeholders as part of the regulatory bodies as having 100 per cent civil servants as in the regulatory bodies will amount to putting old wine in a new bottle.

     

  • Wanted: Strong legal framework for petroleum industry

    For two days, oil and gas law practitioners and other stakeholders met in Lagos to examine the sector’s legal framework. Their verdict: existing laws have outlived their usefulness. JOSEPH JIBUEZE reports.

    Legal experts have called for a quick passage of the Petroleum Industry Bill (PIB) into law.

    They said its non-enactment has stalled investment in the oil and gas sector.

    According to them, the laws regulating the sector, such as the Petroleum Act, date back several decades and are no longer globally compliant.

    They spoke in Lagos at the Lawyers in Oil and Gas Retreat, organised by Bromshy Communications Ltd. Its theme was: Petroleum Industry Bill: Its implementation a panacea for sustainable growth and self-reliance.

    The two-day event had six sessions on roles of the executive, local companies and investors, multinational companies, law firms and host communities. There was a session on the history of Nigerian oil and gas legal system and the way forward.

    Legal Manager at the Nigerian Petroleum Development Company (NPDC) Mr Amaitari Andabai said having a favourable fiscal regime was key in attracting investment.

    According to him, one of PIB’s objectives is to foster a conducive business environment for petroleum industry operations.

    He said it is also designed to act as a catalyst for and stimulate increased investment flow in oil and gas.

    However, he said such lofty goals cannot be achieved without passing the Bill into law.

    “Delayed implementation of PIB has stalled investment in the sector due to uncertainties over fiscal terms,” he said.

    He added that existing laws were too old and therefore needed to replaced with the PIB.

    “Nigeria’s petroleum laws are archaic; passage of the PIB is long overdue to position the legal regime of oil and gas on a contemporary footing. We must embrace change if we must move forward.

    “Strict and full implementation of the PIB is the key to sustainable development of Nigeria’s oil and gas sector,” Andabai said.

    He said the Billwould address the salient issues and challenges facing the oil and gas industry

    “The fiscal regime of the PIB is quite investor friendly. It compares favourably with other oil and gas fiscal regimes, and has the required features to stimulate further investments in the oil & gas industry,” he said.

    An energy law expert and partner at the firm of Perchstone & Graeys, Tolu Aderemi, said the non-passage of the PIB was damaging to the economy.

    He believes enacting it would represent a landmark opportunity to herald positive and productive reform in oil and gas industry and to realise and maximise its vast potential.

    According to him, failure to pass the Bill has already caused a drought in new investments in the sector.

    “A nil investment in the upstream is a recipe for drought in the industry. Let us place the nation above self and get the Bill passed,” he said.

    He regretted that almost two decades after the Bill was conceptualised, it was yet to become law.

    “A well thought-out, well crafted, truly workable and balanced document would redeem us as a nation from what is becoming a global embarrassment,” he added.

    Executive Director & General Counsel at ExxonMobil, Sadiq Adamu, said when the PIB is eventually passed, implementation of reforms should be structured.

    “While many countries have changed their petroleum laws from time to time, best practice is to do so in a careful manner allowing for systematic implementation of new laws and regulations, establishments of new institutions in order to avoid operational, administrative and regulatory disruptions,” he said.

    In the meantime, he said the government must guarantee the certainty of access to an independent and fair mechanism for a timely resolution when disputes arise.

    This, he said, would give businesses the required confidence to invest in the petroleum industry.

    “While every country, including Nigeria, has the sovereign right to enact laws to reform any sector it so desires, including the petroleum industry, it must bear in mind that any such reform will have consequences, positive or negative.

    “The agenda of the reform must be carefully crafted to achieve the desired results. Key stakeholders must be engaged in the reform agenda to ensure a win-win outcome for all stakeholders,” Adamu said.

    A Senior Lecturer at the Niger Delta University, Dr Perowei Subai, said regulatory institutions need reform.

    He said the Nigerian National Petroleum Corporation (NNPC), for instance, functions both as a regulatory and commercial agency yet it does not declare profits, nor are its accounts very open to scrutiny.

    Speakers also addressed other challenges, such inadequate supply of products locally, insecurity, high cost of production, among others.

    Company Secretary/Legal Adviser at Gas Aggregation Company Ltd, Sam Aiboni, said more should be done to build the domestic gas market.

    According to him, it can be done by revolutionising gas by launching development projects, increasing production, and accelerating the building of “critical pipeline infrastructure”.

    Such infrastructure, he said, include the Obiafu-Obrikom-Oben pipeline (OB3), Trans Nigeria Gas Pipeline and Escravos Lagos pipeline system (ELPS II).

    He said gas production sharing contract terms should be finalised, while the seven key gas development projects should be implemented to ramp up domestic supply.

    On the role of host communities, a non-Executive Director at DUBRIL Oil Company Ltd, Clement Seweje, said they should endeavour to provide an enabling environment to allow for peaceful operation by oil firms.

    “It is when they operate that incomes and development will flow in. Communities must hold their government and relevant agencies accountable for the development of the zone. They must act as whistleblowers in their respective domains.

    “The communities must speak with one voice on critical        issues concerning their development. Money/inaction must not be allowed to divide the communities,” he said.

    Former Rivers State Commissioner for Information and Communication, Dr Austin Tam-George, noted that PIB requires every company in the industry to contribute 10 per cent of their net profit to a Petroleum Host Community Fund on a monthly basis.

    Tam-George said the provision should be retained even as there is need to manage the funds well for the communities’ benefit.

    “Do we have a way of managing such resources? Will it quell the agitation in the region? If that chapter is included in the final copy (of the PIB), what is the implication?” he asked.

    Managing Director of Bromshy Communications, Raqeebah Oloko, said lawyers in the petroleum industry have major role to play in transforming the sector.

    “We are at the forefront in drafting and implementing the policies guiding the industry,” she said.

    She said the event was designed as a less formal avenue to extensively discuss the oil and gas sector’s challenges and to find lasting solutions to them.

    A communiqué was issued at the end of the event with the following resolutions:

    “The letter and spirit of the PIB legislations must be tailored towards increasing productivity, as well as deepening Nigeria’s reserve base, and sustaining the environment;

    “Nigeria must take the global shift away from fossil fuels seriously and embrace renewable energy sources, even as she seeks to reform her oil and gas industry;

    “The pre-emptive powers of petroleum ministers must be properly redefined to guard against arbitrariness;

    “Local (host) communities must take their destinies in their own hands as far as compensations and other forms of engagements are concerned, rather than look to their elected representatives or to company officials;

    “Nigeria needs to adopt best practices through bilateral treaties on the vast range of issues having to do with oil and gas reform;

    “Labour laws at oil and gas companies domiciled in Nigeria must be strictly enforced –with particular reference to the enhancement of local content at managerial  level; ending both the expatriate quotas and the lengthy casualization of local staff.

    “There is an urgent need for greater capacity building in the enforcement of laws regulating the oil and gas industry in Nigeria.”

     

     

  • No plan to deregulate petroleum industry – Osinbajo

    No plan to deregulate petroleum industry – Osinbajo

    Acting President Yemi Osinbajo said on Thursday the Federal Government  has no plan to deregulate the downstream sector of the petroleum industry.

    He said any attempt to deregulate the sector would lead to increase in prices of petroleum products, especially Premium Motor Spirit (PMS).

    Osibanjo, who stated these during the 2017 African Modular Refinery Discussion, organized by the Modular Refiners Association of Nigeria (MRAN), said the plan would have serious consequences on the nation’s economy.

    He also condemned government’s involvement in the failure and near collapse of the Kaduna, Warri and Port Harcourt refineries.

    The acting President said in the  modular refineries initiative, oil producing communities would be made to acquire stakes in refineries set up in their locality, while federal government, state governments and private investors would have stakes in the projects.

    Osinbajo, who insisted that federal government is committed to creating an enabling environment for private sector participation and investments in modular refineries, said the government is aware of the challenges and complications posed by non-deregulation of the sector.

    He said complete deregulation of the petroleum sector would bring untold hardship on vast majority of Nigerians.

    He said, “There are those who are saying we need to deregulate fully. Why are they saying that? It is because if we do not deregulate, it is not cost effective for those who are producing PMS to sell. At the same time, if you deregulate completely, prices of everything else is going to go up.

    “So there are those complications, meaning we got to moderate all those things. Government has to come in at certain extent and this is what is currently going on, at least to try and balance things up. This is because we cannot have, just overnight, another massive deregulation. If you do that obviously, the consequences would be very dire for the economy.”

     

  • ‘Right policies ‘ll revitalise petroleum industry’

    ‘Right policies ‘ll revitalise petroleum industry’

    Nigeria, according to Chukwuma Okolo, Enfrasco Energy and Infrastructure Services Ltd Chairman/Chief Executive Officer, has the capacity to become an exporter of refined petroleum products. It also has the capacity to attract in foreign direct investment (FDI). But for this to happen, the right policies must be in place, says Okolo, in this interview with AMBROSE NNAJI.

    In view of the challenges in the oil and gas sector, what should be done to make it more competitive and create value addition?

    The industry needs a clear vision and strategy across the value chain – upstream, midstream, and downstream – to foster competition among operators. Once this is in place, operators at various levels would focus on meeting the goals of the industry, which include but not limited to the following: improved  refineries’ operation, increased oil and gas reserves, supply of gas to thermal plants, production of gas for domestic and international markets, among others. These targets, when achieved, would fast-track the country’s Gross Domestic Product (GDP), foreign exchange earnings, government’s revenue as well as creation of opportunities for employment for the people.

    Hydrocarbon has many by-products. How should the by-products be  harnessed for the development of the economy?

    To harness petroleum by-products, there is the need to take the upstream capacity to the highest level. There is an urgent need to focus on refining our crude production here in Nigeria and, possibly, import additional crude for refining in the country. By this, Nigeria would certainly be an exporter of refined products, and dominate the African space. We should exploit opportunities in all the related products – such as fertiliser, petrochemicals and plastic derivatives. You also know that one of the major ways of exporting gas is not just liquefaction of natural gas as being done by the Nigeria LNG Limited, it can also be exported through power generated by use of gas. I am not even talking of a number of products. I am talking of full deployment of processing capability and stretching it to the technical limit. This will contribute to GDP, employment creation, and, obviously, foreign exchange earnings.You will notice that when the banks publish records of foreign exchange allocation, it appears that the largest singular allocation is to petroleum product import, which is bad. It should not be so, because I will rather give foreign exchange for importation of food items, medicals, pharmaceuticals, importation of books and computers and, certainly, not petrol.

    Why are the four refineries not working or not performing at sub-optimum level?

    We have refining capacity in three major locations – Kaduna, Warri and Port Harcourt. We usually count Port Harcourt as two. These refineries by local standard are not, particularly, old. Besides, refinery maintenance and operation are not rocket science. It has basic factory processes. I think we need a number of things to make our refineries work – leadership and political will; a reasonable operational autonomy to the management of the refineries such that the managing director can take decisions relating to his factory without elaborate applications to either the Nigerian National Petroleum Corporation (NNPC) headquarters or the Presidency for approval, guaranteeing crude allocation to these refineries so that they have the raw materials to process and, also, a firm commitment to drive the business of the refineries as a private sector business. I do not believe that we have to privatise our refineries to make them work. I also strongly believe that Nigerians who are running these refineries are among the best in the world. If you privatise them, it is still these same Nigerians who are running them that will run them; so why can’t they run them. The answer is quite simple, a genuine determination and willingness by political leadership to let our refineries run, some financial autonomy and management independence to the team to do their work, guaranteed and steady access to raw materials, which is the crude that we produce, and obviously, let the management be.

    Are the refineries obsolete?

    Our refineries by global standard are extremely good. They are not old, there are refineries that were built in the 60s, some of our refineries were built in the early 80s and 90s. There’s the old Port Harcourt refinery, which is the first one ever to be built. Then there is the second refinery. There is the Warri refinery, which is actually three plants in one. That is why we call it Warri Refinery and Petrochemical Company – a refinery, a petrochemical plant as well as a carbon black plant. There is the Kaduna refinery, which is actually a dual crude refinery. The Kaduna refinery can handle Nigerian crude and Venezuelan heavy crude, depending on the product yield desired. The design is that we need to run it, so that we can produce bitumen for road construction. They run the heavy crude and have the by-products after kerosene, petrol and diesel. It is actually more like asphalt. When you don’t have imported crude, you run the Bonny light there, which essentially, will give more products and less heavy residues. This plant was built in the 1980s, so by world standard, they are not that old.

    So, if we need bitumen, which is what we use in road construction, we mix bitumen with aggregate and coal so that you can have your asphalt; so Kaduna was supposed to do that, all the refineries practically produce cooking gas (liquefied petroleum gas). Cooking gas is the by-product of the refining and Nigerians are probably paying two or three times more than they are supposed to pay for the commodity because the refineries aren’t working.

    With what is happening in the global oil industry, what  is the future of Nigeria’s oil and gas industry like?

    Oil and gas resources are great blessings to Nigeria; forget all that is happening now, which is self-inflicted injury. Nigerians are one of the most knowledgeable human beings on earth, so when they decide to do right, they do it right and when they get it wrong at times, it is purely deliberate.

    What is your take on deregulation of the downstream-sector?

    In the short-term our resources are fixed, so if you spend on one item that money is not available to be spent on another. However, on deregulation, I don’t see any major difference between running a refinery and having a cocoa bottling plant or brewery. I think we have elevated refining and petrochemical to almost a level that is not supported by business or economic reality. How can a litre of petrol be cheaper than a bag of sachet water? It is ridiculous. What I am saying is that we are just postponing the difficult times. Who are we protecting on non-cost-reflective petrol price? I don’t know, because diesel is deregulated. There is no control. Petrol is essentially for cars and smaller buses, which is mainly for city dwellers, so, the issue is who are we protecting? What we need is a gradual series of changes where we transit from a controlled petroleum price to a price that, at least, reflects the cost of production and I think we would be able to achieve it. By the time the three refineries are fully functional, and Dangote Refinery too, Nigeria would have had functionally over a million barrels per day (bpd) refining capacity. It will be interesting to see if the government would be willing to sign cheques to hand to the companies in the name of petrol subsidy. But we don’t need to wait for that long, I believe the process to ensure we fully deregulate should probably be a two or three years phase process, which should start now.

    How can the government find lasting solution to pipeline  vandalism and oil theft?

    Pipeline vandalism and crude theft, even though they are related, are major challenges Nigeria faces today. It doesn’t give a sense of economic belonging to the youth who engage in the act. But they are almost economically disenfranchised by no fault of theirs. They rear their heads in different dimensions – the Niger Delta militancy, pipeline vandalism, disturbances in the Southwest or in the North. These are youths seeking economic inclusion which we all had at their age, we had scholarships, and we had ready-made jobs. When you talk of crude theft, the volumes are not small. We were told from 200,000 barrels to over 400,000 barrels were stolen. If you really know what that means in terms of weight, you will know these are no crude carried in jerry cans. I believe that technology exists today to make crude theft redundant by denying them market, so if you steal crude you can’t sell it. The illegal refineries in the Niger Delta are not our headache. All the illegal refineries in the Niger Delta cannot refine up to 10,000 barrels daily. Also if you pump 100,000 barrels into a vessel and the paper says 80,000, somebody has stolen 20,000 barrels. It has nothing to do with pipeline breaking, so there is measurement issue. The integrity of measurement is there, you do not move 200,000 barrels with canoes or speed boats, you need large tankers. Light technology will help us know where those tankers are, point them out, empower the Navy and the Air Force to take them on. Again, there is leadership and political will. I don’t believe that hundreds of thousands of barrels of crude are stolen in 50-litre jerry cans or by illegal refining. If those with jerry cans are only our problem, we won’t be talking about hundreds of thousands of barrels. In fact, you can argue that the people who are into illegal refining need to be rehabilitated and put in the mainstream. The thousands of barrel of crude can only be carried in huge tankers; and it has to do with either improper metering of what is pumped or actively condoning those large tankers.They can easily be dictated by satellite.There are more dedicated versions that deliver real-time pictures. We are where we are by choice; you make certain choices by either actively or inactively condoning it.

    How can the mistakes in the power sector privatisation be corrected?

    Nigeria has the capacity to deliver over 10,000 megawatts (Mw) of electricity a day but there is lack of gas supply. So, generation needs to be addressed urgently. It is not about building new gas turbines, it is about having enough gas for plants. There has to be a massive expansion of the grid network, including the concession of micro grid or regional grid, which will allow individual organisations to build a grid. I don’t think distribution companies (DisCos) have enough investment to distribute 10,000Mw. In short, if you produce 10,000Mw today, our DisCos will not take it because the infrastructure to send the power to houses and invoice to collect money from those houses are not in place. If the DisCos cannot handle distribution effectively, the government should consider concessioning the six territories to third party distribution and collection. The power industry requires a coordinated and orchestrated management of value chain from generation through transmission and down to distribution, and each of these components of the value chain has inherent bottlenecks that must be addressed. Privatising the power sector was a right decision, there are obviously bottlenecks, and one is gas. There should have been a coordinated Ministry of Power and Ministry of Petroleum to ensure that as you are making investment in power turbine, gas is in place for it.

    What is the way forward?

    All we need is leadership with  clear vision and strategy to fast-track aggressive development in oil and gas, infrastructure, human capital development. We are talking of full-blown development. The last concerted efforts for a national development plan was the vision 2010. The vision 2010 was the most elaborate and well-thought out all-inclusive document on Nigeria’s visions and how to realise them, but there was no genuine intention to implement them. The vision 2020 was more of a political document of continuous motions without movement, so what we now need is the motion and the movement; let there be jobs for youths.

     

     

     

  • Petroleum Bill: Ajimobi advocate overhaul of operational system

    Petroleum Bill: Ajimobi advocate overhaul of operational system

    Oyo State Governor, ‎Sen. Abiola Ajimobi has called for a total overhaul of the operational system of the nation’s petroleum industry through pragmatic and practical legislation.

    He made the call on Monday evening at the expert session on Petroleum Industry and Governance Bill 2016 organised by the Progressives Governors Forum in Ibadan.

    The session was to review the Petroleum Industry Bill (PIB) and Petroleum Industry and Governance Bill (PIGB) 2016.

    Ajimobi said that the black box approach that has characterised the operations of the industry over the years needed to be addressed.

    He stated that it was a major cause of the massive corruption and untoward practices in the industry, which has denied the country and people from deriving maximum benefit from the sector.

    “I am of the view that these scenario has persisted because of the flaws in the laws and regulations guiding the operations of the industry. Most of the laws were prepared for us by foreign operators of the system at the advent of oil in Nigeria in 1957.The substance of the laws has remained unchanged and the order is the unusual concentration of powers in the hands of the president and the minister in-charge of the industry,” he said.

    Ajimobi stated that both the president and minister could easily determine the fate of the nation’s petroleum and gas industry without consulting other relevant stakeholders.

    He said that the nation has never sat to decide on a national economic intetest and the role the petroleum industry was expected to play towards its realisation.

    According to him,” we have been contented with collecting and spending every revenue handed to us by the one- informed foreign operators.

    The governor, who described the country as extremely gas rich said urged participants to profer informed and pragmatic solution to the challenges confronting the industry.

    “No quality government is the primary cause of the myriads of problems that has continued to bedevil the realisation of the developmental role of our petroleum sector.This is with, of course the attendant negative socio-economic consequences of our country and citizenry.

    “We must articulate the potentials of getting our economy out of the woods through the consequent improved governance within the nation’s petroleum industry,” he said.

    Also, the All Progressives Congress (APC) Deputy National Chairman, South, Mr Segun Oni, said that there was need for urgent reformation of the petroleum and gas industry.

    Oni, a former Governor of Ekiti State said that it was the reason why the party had taken special attention on the petroleum industry.

    He said that the party was optimistic that the industry could be reformed through better legislation and operations.

    “The combination of the PIB and PIGB, if specially attended to with world class results, the industry will witness tremendous transformation. This will take the industry and nation greater and enviable height,” he said.

  • Reps move to fast-track PIB passage

    The House of Representatives, on resumption from a two-month break yesterday, moved to fast-track the passage of the Petroleum Industry Bill (PIB).

    Speaker Aminu Tambuwal, who gave the directive while declaring open the fourth legislative session of the Seventh Assembly, at a plenary, gave the ad hoc committee on PIB 21 days to complete work on the piece of legislation and submit its report.

    Nigerians believe the proposed PIB, seen as an omnibus law for the petroleum industry, will address the negative attributes in the oil sector and that it is the only way to maximise the benefits accruable in the sector.

    The House had set up a 23-man ad hoc committee headed Mohammed Isiaka Bawa to fine-tune the PIB, as the draft legislation passed the second reading.

    It also conducted a regional public hearing as part of efforts to take the input of Nigerians on the proposed bill. This was followed by another technical committee put in place by the Speaker after the regional public hearing, which was done in the geo-political zones.

    Yesterday’s ultimatum seemed to be an apparent response to the clamour by Nigerians for the quick passage of the PIB and the promise of the House that it would be passed before the expiration of the Seventh Assembly.

  • ‘Expedite action on PIB’

    THE Federal Government should expedite action on the   Petroleum Industry Bill (PIB) to attract more investors into the sector, experts have advised.

    They spoke against the backdrop of the passage into law of the equivalent of Nigeria’s long-delayed Petroleum Industry Bill (PIB) in Mozambique and Mexico,

    Mozambique’s lawmakers okayed petroleum laws that would pave the way for new oil bids, as well as provide a special tax break for offshore fields operated by Anadarko Petroleum Corporation and Italian oil major Eni, while Mexico has passed an energy reform bill that promises to lure investment into its oil and gas industry.

    Besides, large discoveries in East Africa are presenting new opportunities for investors, as well as increasing competition in the continent.

    The experts, which include the President, International Association of Energy Economics (IAEE), Wunmi Iledare, an energy analyst and member of Petroleum Accountant Societies (COPAS) of United States, Bala Zakar, and Managing Director/ Chief Executive officer, Total Exploration and Production, Nigeria, Elizabeth Proust, said the development has brought to the fore the seriousness with which the oil and gas producing countries are positioning themselves for growth.

    Iledare said Nigeria had to wake up to its responsibility of attracting investments into the industry, citing Mozambique, Mexico and other oil producing countries.

    He said structures that support investment is lacking in the sector, and urged the government to create an environment that would make investors to invest in Nigeria.

    He said: “The resources to develop are there, especially natural gas.

  • NACCIMA urges Fed Govt to engage private sector in policy formulation

    NACCIMA urges Fed Govt to engage private sector in policy formulation

    The Vice President, Nigeria Association of  Chambers of Commerce Industry, Mines and Agriculture (NACCIMA), Prince Billy Gillis-Harry, has urged the government to engage the private sector in policy formulation.

    He also emphasised the place of collaboration between public and private sectors in the provision of sustainable infrastructure needed for economic growth.

    Speaking with The Nation, he said the business environment is low, adding that the policies that should kick-start the growth of the economy are not not in place.

    He said: “Our government  is the biggest spender; to guarantee consistent growth and source of employment to deplete the rate of unemployment, but the government in Nigeria is still the biggest spender. All the major projects like construction of roads, airport, repairs, are all handled by the government.

    “Banks, of course, are still very slow in supporting businesses; banks only know how to keep money and charging high transaction costs. This is discouraging because shareholders invest in business to make profit, and the profit must be proactive, protected to protect new entrants, new ideas or innovation.”

    On the Petroleum Industry Bill (PIB) gathering dust on the floor of the National Assembly, he said it is a bill aimed at tackling the excesses in the industry, adding that local content is also vital to grow indigenous capacity in the oil and gas sector.

    “Local content, as a new law, which the Federal Government has enacted, is to boost indigenous participation in the nation’s oil and gas industry. I think it is the right way to go. If Nigeria must be industrialised and must be stable, not just in the oil and gas, but in all aspects of our national economy, local content should be a focus where a greater percentage of what is the component of anything we consume here is home-grown. They should be manufactured here with the intent of raising the nation’s Gross Domestic Product (GDP).

    ‘’I think local content should be the way to go. The Nigerian Content Development and Monitoring Board (NCDMB) is doing well. I think, so far, they are doing as much as they can in the oil and gas industry, which is what the law says. However, I think they should be expanded to manufacturing and food production so that agriculture can come back as the mainstream of the economy.’’

  • ‘Non-passage of PIB, oil theft killing petroleum industry’

    ‘Non-passage of PIB, oil theft killing petroleum industry’

    Stakeholders in the oil and gas industry foresee grave uncertainty in the sector. They say the non-passage of the Petroleum Industry Bill (PIB), oil theft and vandalism of pipelines and other facilities, are gradually killing the industry, that urgent measures need to be taken to move the sector forward. EMEKA UGWUANYI, Assistant Editor (Energy) reports.

     

    The direction of the oil and gas sector this year remains a conjecture. Despite assurances from the government that Nigerians should expect a better year, stakeholders think otherwise. They said the non-passage of the Petroleum Industry Bill (PIB) is detrimental to growth of the petroleum industry.

     

    Upstream

    The immediate past President of the Nigerian Association of Petroleum Explorationists (NAPE), Dr. Mayowa Afe, expressed disappointment that the government has been unable to draw a pathfinder for sustainable growth of the oil and gas industry. He said the non-passage of the Petroleum Industry Bill (PIB) is killing the industry and makes Nigeria a laughing stock outside this shore.

    For the industry to witness a change this year, he said: “The ongoing ridiculous grammar about the Petroleum Industry Bill must stop. The Executive, Legislature, Judiciary and other stakeholders must find a way to end this unnecessary debate and tussle over PIB.

    “In my view, the PIB is being politicised. This unpatriotic approach to a very important national issue is not giving our country a good image outside the shores of this country.

    “Investors are moving their investments out of this country while potential investors are diverting to other countries. Oil companies are moving to other neighbouring countries – Ghana, Angola, Mozambique and even the war-torn Somalia, among others because of the uncertainty surrounding the future of Nigeria’s oil and gas industry.

    “I must tell you that the oil companies in Nigeria currently are just sustaining production in-country to use the money made from here (Nigeria) to invest in oil and gas blocks they acquired outside Nigeria.

    “We want to see activities in Nigeria’s oil and gas industry increased, more exploratory and development wells come on board. Kidnapping in the industry must end even if it entails engaging more youths in the Niger Delta region on sustainable basis. Crude theft, vandalism of oil facilities and unreliable regulations must end.”

    On investment, Afe said the way the industry is going, investors may at a point lose interest in Nigeria completely. Major oil companies in Nigeria are divesting their assets and reinvesting proceeds from such divested assets in other countries.

    He said: “Investors will be hesitant to put down their money in any investment and any country if there are no dependable regulations and platforms to ensure the safety of the environment and their investments.

    “The 10 per cent for oil producing communities in the Niger Delta as provided in the PIB makes sense. Certainly, it will tremendously help to achieve security aspirations of the industry and give the expected safe investment environment.

    “If the PIB is not passed as soon as possible this year, it will be a killer for Nigeria’s oil and gas industry,” he added.

    A petroleum lawyer and solicitor who practises in the United Kingdom and Nigeria, Ms. Efuru Nwapa-Obua, said for the industry to move away from where it is, some anomalies must be addressed.

    She said: “The Industry lacks effective regulatory institutions and is bogged down by gross corruption, mismanagement, poor governance and inefficiency. The fuel subsidy scam in which trillions of dollars were fraudulently paid out to marketers who falsified records with the active connivance of government officials and regulators is a case in point. The scale of the fraud is as mind-boggling as it is audacious and could have only happened in an industry with very weak, or no regulation.

    “Absence of international best practices, transparency, openness, good governance and corporate social responsibility, should be addressed. Inability of the sector to provide the nation with petroleum products is a situation that is disgraceful and unacceptable. Under capacity utilisation of refineries which are producing well below installed capacity must be addressed.”

     

    Downstream

    There are concerns as the country continues to depend on imported fuel. The future of the downstream sector remains unpredictable. According to the stakeholders, because the NNPC is the only company importing products, particularly premium motor spirit (PMS), it is also expected that the downstream would be stable this year considering the stability in supply and distribution recorded last year. Apart from occurrences such as vandalisation of pipelines and strikes by marketers, or oil workers such as the petroleum tanker drivers, the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, said the Ministry would ensure that there would be adequate supply and efficient distribution of petroleum products this year.

    The Group Managing Director, Nigerian National Petroleum Corporation (NNPC), Andy Yakubu also said the corporation is revamping all dysfunctional fuel depots across the country to actualise the aspiration of stamping out fuel scarcity completely and permanently from the country.