The Nation Newspaper

Tag: petroleum

  • 1500 Niger Delta militants ready to surrender arms

    1500 Niger Delta militants ready to surrender arms

    Due to the intervention of the Minister of State for Petroleum Resources, Dr Ibe Kachikwu, more than 1,500 Niger Delta militants have expressed their willingness to embrace amnesty.

    The militants are reportedly ready to surrender their arms to the Federal Government.

    The decision was contained in a statement issued in Abuja by the commanders from Arepo, Ikorodu, Abule, Fatorla, Ibafo, Magboro, Epe, Itokin, Ilepete, Okenekene, Agric, Gbokoda camps, Camp 5 and environs.

    They said they were ready to surrender their arms as long as the Federal Government is sincere with the matter.

    They noted that they were excluded from the first amnesty programme, which they described as not holistic and characterized with fraud and fraudulent selections.

    Even as they took their decision based on the peaceful approach by Kachikwu, they stressed that all the Nigerian National Petroleum Corporation (NNPC) facilities and its subsidiaries must work for the betterment of Nigeria and the economic efficiency in the face of dwindling oil prices.

    The statement which was signed by General O.C Babaeere and General America Tekeiminikpoba on behalf of other commanders, reads: “We write to express our desire to surrender our arms and embrace the amnesty program as long as the federal government is sincere.

    “With the timely intervention of the Minister of State for Petroleum, Dr. Emmanuel Ibe Kachikwu, we the Commanders from Arepo Camp, Ikorodu Camp, Abule Camp, Fatorla Camp, Camp 5, Ibafo Camp, Magboro Camp, Epe Camp, Itokin Camp, Ilepete Camp, Okenekene Camp, Agric Camp, Gbokoda Camp and their environs, have made up our minds to accept amnesty because of the peaceful approach of the Minister of State for Petroleum.

    “We also agree that all NNPC facilities and its subsidiaries must work for the betterment of Nigeria and the economic efficiency in the face of dwindling oil prices.

    “However, our willingness to surrender should not be seen as an act of cowardice, rather, as an act of patriotism.

    “Also, as we accept this amnesty, it is important to state that the first amnesty was not holistic and was characterized with fraud and fraudulent selections. We were not included in that amnesty program. Even as we tried all avenues to join the program, we were ignored completely,” the commanders stated.

  • Petroleum mode and pork barrel governance (3)

    Petroleum mode and pork barrel governance (3)

    There is no better illustration of the political programme of waste and senseless consumption than the creation of 36 states and 774 local governments out of the four pre-coup regions under a federal system inherited by the first military government.

    • Initiate action to amend our Constitution with a view to devolving powers, duties and responsibilities to states and local governments in order to entrench true Federalism and the Federal spirit;
    • Restructure government for a leaner, more efficient and adequately compensated public service;
    • Balance across regions by the creation of 6 new Regional Economic Development Agencies (REDAs) to act as champions of sub-regional competitiveness;
    • Put in place a N300 billion regional growth fund (average of N50bn in each geo-political region) to be managed by the REDAs, encourage private sector enterprise and support to help places currently reliant on the public sector —FROM Buhari/APC MANIFESTO

    Last week, we posited that military dictators in control of Nigeria between 1966 and 1999 responded to the rising flow of revenue from petroleum the way a toddler would respond to gifts from Santa Claus: excitement without an awareness of life beyond gift-giving at Christmas. Civilians brought to power through elections supervised by military dictators all continued the adoption of an expenditure culture that took the disconnected the polity from productive economy. From extravagant compensation of political officers and public servants to proliferation of government ministries and agencies, military dictators chose the style of lottery winners to spend national revenue with little attention to economic development of the country for citizens’ welfare. Civilian governments birthed by military dictators through dubious elections also mimicked their military mentors in sustaining a political economy driven principally by the country’s non-renewable money spinner.

    There is no better illustration of the political programme of waste and senseless consumption than the creation of 36 states and 774 local governments out of the four pre-coup regions under a federal system inherited by the first military government.  Many folk commentators are already saying that President Buhari has been elected to come and deal with the nemesis of military distortion of Nigeria’s federal system and the creation of a wasteful centralist governance and over 100 sub-national administrative bureaucracies that function more as sites for distribution of pork or benefits of power than as units for development to enrich citizens’ lives. On the positive side, some opinion leaders believe that, given the mythology about Buhari’s strength of character and sincerity of purpose, the president stands a good chance of changing the country well enough to atone for the failure of military intervention in the polity.

    Instructively, General Buhari’s election manifesto acknowledging that the 1999 Constitution needs to be revisited and renewed, with the hope of entrenching “true Federalism and the Federal spirit” signals the determination of his administration to go back to the drawing board on how to make Nigeria achieve its full potential. Making the entrenchment (or re-entrenchment?) of true federalism the first item in his 90-item menu of initiatives indicates the readiness on the part of the president and his ruling party to move from using the revenue from petroleum or any other finite resource for that matter to service facile unity and use such finite resources to nurture a country that can advance through economic development and unity of purpose.

    Unlike many countries that used fossil energy to add significant value to the lives of citizens, such as Norway, Mexico, Brazil, Nigeria after 57 years of sale of petroleum, which could have been an economic rescuer of the country, today stands hobbled by the failure of past leaders (mostly military rulers) to use revenue from petroleum to advance the country with respect to the economy, polity, and even culture. The four regions that stood tall and proud as leaders in agriculture and light manufacturing in the 1960s are now about 100 subnational administrative units carrying bowls to a central government that waits nervously for the latest news about price of petroleum in the international market. Electricity, the sine quanon of modernity and modernisation, virtually disappeared in the country as citizens hear more about the fall and rise of megawatts rather than having electricity to run their factories or preserve their food. Instead of investing in infrastructure development and citizens’ convenience, military designers of post-colonial Nigeria used revenue from petroleum to ‘service’ political appointees and bureaucrats in 36 states and 774 local governments designed to beg for monthly running costs. While states and local governments are obliged to pay thousands of public workers virtually on sinecures, political leaders at all levels of governments plunder the country with impunity, on the strength of a constitutionally backed immunity for the top echelon of rulers.

    At the time that President Buhari starts his administration, the states and local governments created to use the revenue from petroleum are not only unable to pay workers’ salaries and pensions on time, they are also crying out loud about their lack of capacity to pay N18,000 minimum wage. This is despite the fact that individuals on executive and legislative lines of duty across the nation receive outsize salaries and allowances; fly jets or helicopters to visit their constituencies; and are provided with policemen and women who lack access to modern healthcare and have to use prayer warriors in place of gynaecologists and paediatricians for their dependants. The more money flows into the country’s purse from oil, the more inequality festers in all manifestations. The tension generated by inequality has become obvious to rulers to the extent that they hire image makers to frame public discourse along the narrative of national unity for its own sake, rather than for any political, economic, or cultural purpose, the rationale for all modern democracies.

    To advance the cause of national unity, development, and stability, none of the 90 items in Buhari’s manifesto should be adjudged superior to the other. Removing the flaws in the structure of government and constitution, already acknowledged in Buhari’s manifesto, is as crucial for peace, stability, development, and unity as the fight against corruption at the hands of a venal elite. As unenviable as the challenges before President Buhari in a country that has been degraded for decades by poor policies that include deliberate dismantling of Nigeria’s federal system may be, the bitter truth for Buhari to face is that past mistakes need to be rectified not excused. The current constitution is a graphic illustration of such mistakes.

    It is instructive that President Buhari has vowed to engage all militant groups that threaten the survival of united Nigeria: Boko Haram and Indigenous People of Biafra, for example. But the president must not lose sight of the fact that not all nationalities or regions complaining about marginalisation and inefficient and ineffective governance are interested in seceding from Nigeria. Many nationalities and regions are calling for restoration of federalism, rather than mobilising for disintegration. As the president focuses on ending Boko Haram terrorism and recovering the country’s stolen funds from thieves of state, he should give attention to establishing an inclusive process of re-crafting a federal constitution.

    Such process must not be mechanical as efforts in the past by both military and civilian rulers had been, even if establishing a constitutional review process has to take more time than the quick-fix that had characterised all the national conferences in the past. President Buhari needs to mobilise all regions to participate in the process of creating a people’s constitution through their duly elected representatives for the purpose of identifying needed changes to the polity and the fiscal culture. None of the national conferences in the past should be taken as having completed the thinking needed to restructure the country for peace, stability, and development while none of the ideas in previous conferences should be dismissed without proper consideration by those elected by their communities to participate in constitutional review. Citizens should be given a free hand to decide whether they want regional cluster of states that create development through fiscal autonomy or another federal bureaucracy (called in Buhari’s manifesto Regional Economic Development Agencies (REDA)) that is to administer development.

    It will be simple-minded and over-sanguine to continue to look for revenue to continue the tradition of waste and extravagancy that led Nigeria to its current backwardness in spite of huge revenue from oil in the past. President Buhari should avoid one dimensionality in his diagnosis of the country’s problem. Corruption is certainly a cause of underdevelopment, so is the use of revenue to create and sustain fiefdoms for politicians an important factor in the country’s underdevelopment.  Citizens appear to have seen through all the stratagems in the last fifty years to deceive and distract them from coming to terms with the determination of a band of rulers-military or civilian-to exploit and dominate them. This is the right moment to demilitarise the polity, and Buhari is in the best position to do this, having been a major player in the era of what Abubakar Umar once called the mistakes of military rule.

  • Petroleum mode and pork barrel governance (2)

    Just as the new minister of power has set out to look for the root cause of decades of epileptic power supply in the country, so do the president and his team need to look for the root cause of the country’s under-development, in spite of half a century of over $500 billion revenue to the country from petroleum.

    • Initiate action to amend our Constitution with a view to devolving powers, duties and responsibilities to states and local governments in order to entrench true Federalism and the Federal spirit;
    • Prevent abuse of executive, legislative and public offices through greater accountability, transparency and strict enforcement of anti-corruption laws whilst strengthening the EFCC and ICPC;
    • Amend the Constitution to remove immunity from prosecution for elected officers in criminal cases;
    • Restructure government for a leaner, more efficient and adequately compensated public service;
    • Balance across regions by the creation of 6 new Regional Economic Development Agencies (REDAs) to act as champions of sub-regional competitiveness;
    • Put in place a N300 billion regional growth fund (average of N50bn in each geo-political region) to be managed by the REDAs, encourage private sector enterprise and support to help places currently reliant on the public sector;
    • Initiate policies to ensure that Nigerians are free to live and work in any part of the country by removing state of origin, tribe, ethnic and religious affiliations and replace those with state of residence. –FROM Buhari/APC MANIFESTO

    By way of summary, last week’s piece emphasised the negative impact of a false feeling of affluence from steady flow of revenue from petroleum on the structure, content, and style of governance in the country in the last 50 years. More specifically, we argued that the belief of military rulers that “money is not Nigeria’s problem but how to spend it” influenced military dictators between the civil war and the exit of military dictatorship in 1999 to create 36 mini-states and 774 local governments that turned the country into multiple sites of compulsive consumption and very little production. It also spawned a culture of profligacy in compensation of political office holders in a country where over 70% of the population live below poverty line, while also giving birth to innumerable agencies to do what other layers of government are constitutionally designed to do. We also added that citizens were alienated from government by being largely released from paying taxes, just as they were excluded by military dictators and their civilian successors from the process of creating the current constitution that is to drive governance under President Buhari, also  a one-time military dictator.

    Today’s focus is to elaborate on the thesis of last week: the need to take advantage of huge decline in revenue from petroleum to redesign the structure, content, and style of governance, including response by the government and citizens to the need to finally use the spirit and ideology of change promised by President Buhari and the All Progressives Congress to re-invent the country with the goal of enlarging the space of freedom;  strengthening the architecture of security; enforcing transparency in governance; re-designing the architecture of governance; and transforming states into centers of productivity rather of parasitism on revenue from petroleum or other non-renewable mineral resources-solid or liquid.

    In contrast to the regional model inherited from the British colonial master at independence, military dictators became too unrealistic about the abundance of petroleum, to the extent that they felt emboldened to re-conceptualise Nigeria. Instead of continuing the tradition of a system of three or four regions that compete in terms of economic activities and cooperate by ensuring the survival of the country as a political or territorial unit, military dictators misread the significance of petroleum by viewing it as the sole driver and sustainer of unity. Abundance of petroleum spawned a culture of profligacy; killed economic production in the states under military rule and after; encouraged military rulers to create mini-states as administrative units to guzzle the revenue from oil; and also created a political class addicted to exorbitant personal emoluments, despite having immense opportunities to rob the state. Sixteen years after the exit of military rulers, retired General Buhari and the APC realised that the country needed to be mended through changing the modus operandi of running the country.

    Despite the existence of 36 states with sizable bureaucracy, oversize pay packets for political office holders, and easy access to unwholesome hands of political leaders in the country’s treasury, the social statistics remain depressing. 62 million Nigerians are illiterate; 70% of Nigerians live below poverty line; Nigeria has between 3,000 and 4,000 megawatts of electricity for 170 million citizens; Nigerian manufacturers have to run to Ghana and even Benin Republic to do light manufacturing; more women die at childbirth in the country than any other country in the sub-region; infant mortality in the country remains one of the highest in the world; over 160 million Nigerians are transported daily by mini buses and motor cycles; etc.

    It was therefore not surprising that General Buhari and his party chose the path of change when they crafted the manifesto for the 2015 presidential and state elections. It is still not surprising that after winning the presidency, President Buhari and his party are singing, as enthusiastically as ever, about the imperative of change. Since the election, many pundits have blamed the failure of the country in the last five decades on poor quality of leadership or on the existence of ethnic and religious diversity. Others pontificate on the web about the reluctance of Nigerians to evolve into new post-colonial personas that choose cultural amnesia by demonising their cultural past. Such pundits blame the inability of citizens to undo the diversity that served them well in the years before independence and that has the potential of making them create one of the world’s most developed countries with cultural diversity.

    Many public commentators have complained about lack of a grand vision conveyed in a grand narrative of Buhari presidency’s pre-figuring of the Nigeria he wants to leave behind at the end of his tenure. However, the manifesto with which he negotiated for votes is full of episodic narratives that can add up to a grand vision, if the objectives of such episodic stories are met sincerely and realistically. It is reassuring to note in the manifesto (part of which the bullets overleaf represent) that the president and his party did not just choose the path of escaping from the country’s cultural diversity into cultural homogeneity through individuals’ efforts to re-invent themselves culturally. In a list of what to do that include food self-sufficiency through agriculture and revenue generation through solid minerals, passing N5,000 from the national purse to 25 million poor citizens; free education, free meal in school, improvement of power and other infrastructure; fighting Boko Haram terrorism and political and bureaucratic corruption; the president clearly promised in the first line of his manifesto the need for a new design of the polity bequeathed by military dictators. He has pledged to use his presidency to: initiate action to amend our Constitution with a view to devolving powers, duties and responsibilities to states and local governments in order to entrench true Federalism and the Federal spirit. He and his party also seem to have recognised the need to return to regional economic planning and development: Balance across regions by the creation of 6 new Regional Economic Development Agencies (REDAs) to act as champions of sub-regional competitiveness.

    Details of what to do “to entrench true Federalism and the Federal spirit,” are missing in the episodic narrative of change in the nation. But what to do to promote “regional economic planning and development” shows the impishness (birthed by the philosophy and sociology of spending petrodollars) of throwing money at problems by creating bureaucracies to administer, rather than solve problems. The pledge of Buhari and the APC to re-craft the 1999 Constitution with the aim of re-federalising the country needs be addressed with as much speed and enthusiasm as doing everything else on the manifesto.

    Just as the new minister of power has set out to look for the root cause of decades of epileptic power supply in the country, so do the president and his team need to look for the root cause of the country’s under-development, in spite of half a century of over $500 billion revenue to the country from petroleum.

    – To be continued

     

  • Buhari right to head petroleum ministry

    Buhari right to head petroleum ministry

    SIR: Since President Muhammadu Buhari dropped the hint that he will serve as the minister for the Ministry of Petroleum Resources, there has been a fusillade of criticisms from a particular section of the public. It is not difficult to decipher those agents of the Peoples Democratic Party (PDP) as being the ones rolling the wheels of these criticisms.

    For far too long, the Nigerian economy has been held comatose by a few who have continually raped and reaped our oil sector of fortunes that should have been used to improve the standard of living of the Nigerian people. It is for the reason of the rapacious disposition of this few that a vast majority of Nigerians in both urban and rural areas have a daily high cost of living, without a high standard of living. It is no wonder then that the youths of this country have creatively made a parody in different social media platforms of stealthy and obstinate goats that are always going to steal from our yam barn. The goats in this parody are the corrupt public officials and the yam barn is our oil wealth.

    And then, in the midst of this state of anomie in public accountability comes a President Muhammadu Buhari – a president who came to the rein of power with his shoulders very burdened by the hopes and expectations that Nigerians, especially the youths, have in him.

    If the Buhari administration is to deliver on the hopes and expectations of Nigerians, the president needs to take the bull by the horn by being the one directly supervising the oil and gas ministry. Anything short of this is too much of a risk to take.

    With due respect to the integrity of men and women around the president, it is absolutely not advisable for the president to run the oil and gas sector of the economy by proxy. Apart from the fact that doing so runs the risk of putting another goat as the custodian of our yam barn, the man Buhari himself isn’t a novice of the Nigerian oil and gas architecture.

    As a matter of fact, it can be said pointedly that at every turn when Nigerians have had to enjoy some social benefits from the nation’s oil endowments, Buhari has always been the one driving such benefit to the people. He has first-hand knowledge of the construction of many of the crude oil refineries in the country. Recall also that during the days of the late General Sani Abacha administration, he manned the Petroleum Trust Fund (PTF) successfully.

    With such rich background knowledge of the nation’s oil and gas sector, one needs to ask: what else does the president require to be eminently qualified to administer the Ministry of Petroleum Resources?

    For those who feel that it is business-as-usual in the management of our oil resource, let them be reminded that this new president is a ranger, and he is going to hunt down any stealthy goat.

     

    • Babajide Balogun,

    Ibafo, Ogun State.

  • 23 ships expected in Lagos with petroleum products, foods

    Twenty three ships laden with food items, petroleum products and other goods are being expected in Lagos ports from Sept. 18 to Sept. 30.

    The Nigerian Ports Authority (NPA) stated this in its daily publication – `Shipping Position’- made available to newsmen on Friday in Lagos.

    NPA said seven of the expected ships would arrive with containers, while two others would sail in with general cargo.

    The document explained that nine other ships would arrive with frozen fish, buck wheat, bulk sugar and palm oil.

    It said the remaining five ships were expected with petrol and base oil.

    The document noted that 10 ships had arrived the ports waiting to berth with general cargo, rice, frozen fish, bulk salt, petrol, bulk gas and aviation fuel.

  • Photo: Army burn trucks belonging to petroleum thieves

    Photo: Army burn trucks belonging to petroleum thieves

    COMMANDER, 2 BRIGADE, NIGERIAN ARMY GARRISON, LT.-COL. TIMOTHY OPURUM, ADDRESSING NEWSMEN DURING THE BURNING OF TRUCKS BELONGING TO SUSPECTED CRUDE OIL AND DIESEL THIEVES, IN PORT HARCOURT ON THURSDAY
    COMMANDER, 2 BRIGADE, NIGERIAN ARMY GARRISON, LT.-COL. TIMOTHY OPURUM, ADDRESSING NEWSMEN DURING THE BURNING OF TRUCKS BELONGING TO SUSPECTED CRUDE OIL AND DIESEL THIEVES, IN PORT HARCOURT ON THURSDAY

  • Why petroleum investment is low, by Mobil boss

    Mobil Oil has identi-fied the refusal of banks to give loans to fund critical and sustainable projects, growing cost of operation in the petroleum sector and high exchange rate as factors responsible for the low investment in the nation’s oil and gas sector.

    Its Managing Director, Mr Tunji Oyebanji, said investment in the sector has dwindled in recent times, following the refusal of local and international financial institutions to expedite actions on loan requests from operators in the oil and gas industry.

    Oyebanji, who spoke on the sideline of an oil and gas forum in Lagos recently, said banks were careful of advancing credits for certain oil and gas projects, after appraising the situations in the petroleum industry vis-à-vis the capacity of operators to fulfil their debt obligation.

    He said: “With exchange rate of naira to dollar reaching N230 at a time before it came down to N198 per dollar, it is obvious that local operators would find it difficult to operate in the country. The cost of procuring machineries abroad for projects that are going to be executed in the country is high and unsustainable. Banks compounded the woes of operators by not giving them the required facilities or credits. The adverse effect of these problems on industry is absence of new investments.”

    He said major oil marketers were battling with huge interest rates charged on the loans they collected to finance the importation of petroleum products into the country.

    He attributed the rise in cost of subsidies paid to importers of fuel to interest rates, adding that the non-payment of subsidies is affecting their operations.

    “We (oil marketers) have not been paid subsidies in the past few months. Besides, banks are going to add their interest to the money we collected from them. Is that sustainable? We know that if we fail to continue in business, operations in the downstream segment of the industry are going to be affected,” he said.

    He said product adulteration is another problem besetting the operation of marketers, adding that there are cases where some Nigerians adulterate petrol by mixing it with kerosene, arguing that the development is affecting their business.

    According to him, there are cases of adulterated petrol in Port Harcourt, the Rivers State capital and other states in the country.

    He said the only way to have a fixed price regime in the industry is when a team is set up to enforce it.

    He said marketers were selling prices of petroleum products are at different prices, arguing that the idea does not augur well with the industry.

  • Niger Delta Petroleum Resources wins Global Gas Flare Award

    The  Niger Delta Petroleum Resources Limited has been declared the winner of the “Global Gas Flare Reduction Excellence Award.”

    In a statement, the oil and gas industry regulator, Department of Petroleum Resources (DPR), expressed its appreciation on the recognition of the indigenous petroleum firm.

    It said the achievement was more remarkable as the Niger Delta Petroleum Resources Limited prepares to celebrate its 10th anniversary.

    DPR said: “It is a further testimony of Nigeria’s progress in its effort to strengthen indigenous capacity in adhering to international best practices while exploiting our natural resource.

    ‘’We commend the relentless efforts of the management and staff of Niger Delta Petroleum Resources Limited in ensuring gas flare reduction in their Ogbele gas field project, in line with government’s flare down policy, which has led to this global recognition.

    “We rejoice with them and acknowledge their excellent achievements as being the first indigenous company with a fully integrated oil and gas operation across the entire value chain of the Nigerian oil and gas sector.’’

    It continued: “The Department of Petroleum Resources will continue to provide needed support and guidance to all operators in an effort to encourage optimal productivity of their respective assets in line with global standards, as this will ensure a positive economic growth in Nigeria and sustainable development in the sector.’’

    Niger Delta Petroleum Resources  would be conferred with the award by the Global Gas Flaring Reduction Partnership – a World Bank Group –  between September 9 and 10, 2015 in the Russian Federation.

  • Privatising petroleum

    Privatising petroleum

    • Federal Government to implement a long-overdue policy?

    The recent announcement by the Bureau of Public Enterprises (BPE) that the Federal Government wished to privatise Nigeria’s four state-owned refineries is welcome news, but there is a history of legislative inertia, union opposition and repeated delay to overcome before it can become reality.

    The logic behind the push for privatisation is impeccable. For at least two decades, the country has been a living contradiction of an oil-rich country due to its heavy dependence on imported petroleum products.

    This paradox stemmed from the decline in the output of its four refineries based in Port Harcourt, Warri and Kaduna. In spite of the apparent interventions of successive military and civilian regimes, the country has been unable to get them to work at optimum capacity until recently.

    The huge import bill led to the creation of a subsidy regime which has been riddled with poor regulatory oversight and corruption, especially after its dramatic increase during the tenure of former President Goodluck Jonathan, when it allegedly rose from N300 billion to N1.9 trillion in the first six months of his administration.

    Privatisation would create several benefits. It would take the management of refineries out of the hands of a discredited Nigerian National Petroleum Corporation (NNPC) and put it in the hands of established corporations whose main aim would be developing the reliability that is vital to sustained profit. It would progressively reduce the country’s dependence on imported petroleum products, and thereby help to end the corrupt subsidy regime that is based on it. The long-neglected downstream sector of the oil industry would expand as new players come in to take advantage of increased opportunities. That, in turn, would accelerate the growth of manufacturing, as the by-products of refineries become more widely available locally.

    Before these benefits can be attained, however, several obstacles must be overcome. Perhaps the most prominent is the long-delayed Petroleum Industry Bill (PIB). First sent to the National Assembly in July 2012, the bill is meant to formally define institutions, relationships and responsibilities within the oil sector with the aim of ensuring faster growth and increased local participation and ownership. It has suffered repeated delays due to the supposed opposition of multinational oil companies, the emergence of fake versions, and an inexplicable legislative apathy.

    The BPE claims that the passage of the PIB is vital to the implementation of the privatisation process. Even if it were not, it is difficult to see how such a significant policy could go through in the absence of the updated legal and regulatory framework provided by the PIB.

    Then there is the problem of oil worker hostility. Both the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) and the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) have consistently expressed their opposition to the privatisation of state-owned refineries. They argue that the focus should be on increasing local capacity and disparage privatisation merely as an attempt to sell the nation’s patrimony to well-connected cronies at give-away prices.

    Given the blatant lack of transparency that has characterised previous privatisation schemes in the recent past, the unions certainly have a point. However, even they must accept that the current situation is simply too unsustainable to continue. Government control of the telecommunications industry did not result in efficiency or cost-effectiveness; the entry of privately-owned telecommunications companies has turned Nigeria into one of the fastest-growing performers in the world.

    ‘The logic behind the push for privatisation is impeccable. For at least two decades, the country has been a living contradiction of an oil-rich country due to its heavy dependence on imported petroleum products’

    Government, too, must get over the unwarranted indecision which has only served to further complicate things. Former President Umaru Yar’Adua cancelled the sale of refineries in 2007, after it had been approved by his predecessor, former President Olusegun Obasanjo. The Jonathan administration initiated a process of refinery privatisation in December 2013, but it went nowhere. It is to be hoped that the Buhari administration will succeed where its predecessors have failed.

     

  • Petroleum Industry Bill: So near, yet so far

    Petroleum Industry Bill: So near, yet so far

    Given the far-reaching reforms it will bring to the lifeblood of the economy – the petroleum industry – the Petroleum Industry Bill (PIB) is arguably the most talked-about legislation in the country. Yet, the bill could not leave the legislative oven since December 2008. But, the Eighth National Assembly has promised to give it another shot. Assistant Editors Onyedi Ojiabor and Victor Oluwasegun chronicle why the Sixth and Eighth Assembly could not see the bill through.

    WHAT PIB WILL DO

    • Create a conducive business environment for petroleum operations.

    • Enhance exploration and exploitation of petroleum resources for the benefit of Nigerians.

    • Optimise domestic gas supplies, particularly for power generation and industrial development.

    • Establish a progressive fiscal framework that encourages further investment in the petroleum industry while optimising revenues accruing to the government.

    • Deregulate and liberalise the downstream sector Create efficient and effective regulatory agencies.

    • Promote transparency and openness in the administration of the petroleum resources.

    • Promote the development of Nigerian Content in the petroleum industry.

    • Establish commercially-oriented and profit- driven oil and gas entities.

    After tossing it forth and back for eight years without getting it through the legislative process, the National Assembly is to revisit the Petroleum Industry Bill (PIB). Many wonder what a complacent Senate and a grandstanding House of Representatives did to the PIB between 2008 and 2015

    For what could best be described as parochial and selfish interests, the Sixth and Seventh National Assembly failed to see the Bill through, even after scaling the second reading in both chambers of the National Assembly.

    The bi-cameral legislative house attempted to fly with a wing, when on June 4, a day before the Seventh Assembly wrapped up its session, the Green Chamber passed the PIB. Without the Red Chamber’s concurrence, the passage of the PIB by members of the House of Representatives was of no effect, null and void.

    Senate President Bukola Saraki has hinted of plans to reintroduce the PIB for fresh consideration. Saraki was part of the Seventh National Assembly that passed a flurry of bills on June 3 and curiously, the PIB was missing on the list of 46 bills that were passed in a jiffy.

    In his valedictory speech, Saraki’s predecessor, Senator David Mark, who presided over the Sixth and Seventh Assembly, lamented the non-passage of the PIB. He admitted that the upper chamber could not meet all the targets that it set for itself.

    “….as much as we tried, we did not meet all the targets we set for ourselves. For instance, we were not able to pass the PIB and our constitutional amendment is stalled,” Mark said in the farewell message.

    The PIB began its journey to the National Assembly in 2008 when the late President Umaru Yar’Aduait forwarded it as an Executive Bill for consideration.

    It has been designed by its promoters as a regulatory framework to improve the petroleum industry  with the introduction of transparency and accountability.

    With transparency and accountability provisions, the presidency believed the country’s oil sector environment will be sanitised and play its role as the lifeblood of the economy.

    But, the PIB has been in limbo for eight years with the original 2008 Presidency submission (HB 159), another submission in 2010 by the Federal Inter-Agency Team, and what had been dubbed,  “the weakened 2011 Senate version” of the bill (SB 236).

     

    Stormy beginning

     

    Geopolitical and ethnic divide, bickering and suspicion, have been the bill’s undoing. Senators and House of Representatives members from the southern part of the country wanted the bill passed expeditiously but, majority of their northern colleagues viewed the document as offensive and one aimed at appropriating more funds to oil-bearing communities.

    Some northern lawmakers opposed to the PIB did not only ask what benefits were in it for their constituents. They believed the bill was initiated for the sole benefit of oil-producing states, which they believed, were having more than a fair share of the national cake.

    Analysts have described the PIB as the only way to fully maximise the benefits accruable in the oil and gas sector.

    Going by the contents of the PIB as proposed by the presidency in December 2008 and represented on July 18, 2012, a conducive environment would have been created for petroleum operations and it would have enhanced exploration and exploitation of petroleum resources for the benefit of Nigerians.

    Ahead of today’s resumption of the National Assembly, Saraki has assured that the Eighth Assembly will accord the PIB priority.

     

    The ambitious oil and

    gas sector bill

     

    Those familiar with the oil and gas sector believe the PIB is an ambitious attempt to comprehensively reform the petroleum sector. The larger-than-life image of the bill has stimulated extensive public discourse for and against.

    The reason for the sweeping interest in the bill is simple – it is panacea to nation’s myriads of woes in the oil sector. Some see the PIB as a one-pill-fixes-all kind of legislation that will take the nation to a financial Eldorado, smoothen all the rough edges, assuage the oil producing communities and provide a level playing field for stakeholders in the sector.

    For a country that derives over 90 per cent of its earnings mainly from oil proceeds, the huge interest triggered by the PIB is quite understandable.

    It is a combination of 16 local petroleum laws rolled into a single bill and designed to provide a transparent administration by substantially removing confidentiality, which in turn, breeds corruption in the system.

    Some argue that the PIB will provide good governance in the oil and gas sector, streamline and strengthen petroleum administration, simplify the collection of government revenue, provide higher revenue from deep offshore oil production, encourage small field development and increase activity through modern acreage management.

    Besides, the bill will provide a new role for the Nigerian National Petroleum Corporation (NNPC) by changing it from a seemingly government department to a self-financing and a profit-oriented corporate entity. It will also create Incorporated Joint Ventures (IJV) to mitigate the shortage of funds and provide support for the National Oil Company (NOC) to finance new projects, especially new oil and gas field development in shallow and deep water.

    The PIB also has a provision that only projects with a comprehensive Nigeria Content Plan (NCP) will be approved for implementation.

    The implication of the NCP is that investors, amongst other factors, must not only hire Nigerians, they must also train and educate them.

    “An investor must follow procurement guidelines to ensure local companies are factored in, and verify regularly the Nigerian Content Plan as well as be fully involved in Research and Development,” analysts said.

     

    Unnecessary delay

     

    Despite its importance to the nation’s financial health, the Sixth and Seventh National Assembly could not pass the PIB into law.

    Stakeholders put the blame on the doorstep of the Seventh National Assembly, where buck-passing was the order of the day.

    While the Seventh Senate merely sniffed at it and allowed the document to gather dusts on the shelf after its joint committee on Petroleum (Up and Down Stream) submitted its report on the bill, the Seventh House of Representatives went a step further to raise a 23-member ad-hoc Committee on the bill under the chairmanship of the then Chief Whip, Mohammed Isiaka Bawa.

    After a two-year hiatus, the report resurfaced in the twilight of the House session and its members passed it in a controversial circumstance. Some said the action, on the eve of the expiration of their tenure, was  just to fulfill all righteousness.

    Not long after it was read on the floor of the Senate, allegations of bribery hit the upper chamber. Some Senators were taken on an all-expenses-paid trip to Ghana by the International Oil Companies (IOCs).

    A lot of things allegedly happened in Ghana. There was an allegation that the trip was organised to induce the senators to either jettison the PIB, or to considerably water down its contents.

    The ‘Distinguished’ senators preferred the latter, which apparently gave rise to the weakened version of the PIB being allegedly smuggled into the National Assembly. The senators denied the allegation. They said the Ghana trip was in the best interestof the country. But the bill never saw the light of the day before they served out their term on June 5.

    There was also another allegation that federal lawmakers were demanding for gratification to pass the PIB from the NNPC and its parent petroleum ministry.

    Leo Ogor, the former House of Representatives Deputy Majority Leader denied the allegation.

    He said: “I’m not aware that anybody is asking anybody for a dime. You don’t need anybody to give you a dime to do your job.

    “Our oath of allegiance is to the Constitution of Nigeria, vis-à-vis the fact that we are lawmakers. So, if somebody is going to be asking for money before doing his own job, then that is an aberration. I doubt it sincerely. I hope it’s not some kind of cheap blackmail.”

    On October 16, 2014, the then spokesman of the 7th House, Zakari Mohammed countered the PIB cash-for-passage allegation. He debunked claims that “unseen hands” were dishing out money to make the presentation of the PIB report impossible.

    His words: “We (Representatives) don’t give credence to rumours. The PIB is a very sensitive legislation. A number of issues have come up with political and zonal connotations, there are no unseen hands stalling the presentation of the PIB report.

    “The PIB is ready and it is just a matter of presentation. The PIB will change the workings of Nigeria’s oil and gas sector and also generate employment.”

    Mohammed’s insistence that the report of the ad-hoc committee was ready for presentation notwithstanding, it took the House more than seven months to revisit the bill for debate.

    After waiting endlessly, former Speaker Aminu Tambuwal  had at plenary, gave the Bawa-led committee a 21-day ultimatum to complete work on the piece of legislation and submit its report. The ultimatum failed to make the committee submit its work.

    Agitated Nigerians wonder why it took the House ad-hoc panel so long to put up a report after conducting  regional public hearings held in all the geo-political zones across the country and another technical committee raised by Tambuwal.

    The passage of the bill by the two chambers was further hampered by  contentious clauses in the bill, which divided the lawmakers along geo-political and ethnic lines.

    Most of them felt clauses were not beneficial to their zones. Heated debates on the floor of the two chambers, more often than not, forced long adjournments.

    For instance, southern and northern lawmakers were at variance over what percentage of national funds should go to certain projects in their areas.

    The 10 per cent Petroleum Host Community Fund provision was so contentious that lawmakers from the north dubbed it creation of another Niger Delta Development Commission (NDDC).

    The contentious Clause 127(1) of the document states that: “Each Up stream Petroleum Company shall remit on monthly basis 10 per cent of their net profit to the host community while Clause 126(1) states that the fund is to be “utilised for the development of the economic and social infrastructure of the communities within the petroleum producing communities.”

    Northern members of the National Assembly opposed the two provisions and sought for their deletion. For them, the provision of infrastructure in the oil-bearing communities was already provided for in the NDDC Act.

     

    Nigerians as

    unwilling casualties

     

    For as long as the delay in the passage of the PIB drags on, Nigerians are continually stripped of benefits that would have accrued to them through a more vibrant petroleum sector.

    Stakeholders like oil-bearing communities, local investors and the Federal Government are all missing out due to the non-passage of the bill.

    The PIB Local Infrastructural Development and Maintenance Guidelines mandates oil and gas companies to, of a necessity, consult with host communities in the development infrastructure.

    Besides, oil and gas companies are also directed to ensure the provision of skill acquisition and training programmes and educational support for their hosts.

    The purpose is to give the communities a sense of belonging and not excluded from employment opportunities in the oil and gas sector as they would have acquired the technological-know-how to function maximally in the operational segment of the companies domiciled in their communities.

     

    Fifth columnists

     

    Who benefits most from the non- passage of the PIB?  Who is afraid of the passage of PIB? Why are the IOCs and some multi-national companies against the bill?

    To the IOCs, the fear of the provision of a new tax regime in the PIB is the beginning of wisdom. The IOCs feel that the new regime will force them to pay extra both to the host communities and the Federal Government. They feel that will raise their production cost. The IOCs are also opposed to some aspects of the Local Content provisions.

     

    Expectations from the

    Eighth Assembly

     

    The assurance by Senator Saraki when he hosted a coalition of Civil Society Organisations (CSOs) on June 15, that the new Assembly will treat the PIB with dispatch, has given a glimmer of hope.

    During the visit to the Senate President and House of Representatives Speaker Yakubu Dogara, the CSOs underscored the need for Saraki and Dogara to ensure the passage of the PIB.

    Both leaders of the chambers  gave their commitments.  But, only time will tell how far such commitments will go. One fact that is indisputable is that the country is losing huge revenues to the non-passage of the PIB. The illicit and unwholesome practices in the oil and gas sector of the country’s economy can beciome a thing of the past only if and when the loopholes in the oil and gas sector are blocked.  The PIB – if passed – remains the only pill to heal the oil and gas sector.