The Nation Newspaper

Tag: PIB

  • Senate to pass PIB

    Senate to pass PIB

    The Chairman, Senate Committee on Oil and Gas Resources, Senator Nkechi Nwaogu, has said the Upper Chamber would pass the Petroleum Industry Bill (PIB) before the end of the legislative year.

    The bill has not been passed because of the fears expressed by Northerners about its contents.

    Senator Nwaogu, speaking with reporters in Aba, Abia State, said consultations are ongoing with senators and stakeholders from the North to address the issues that have kept the PIB from being passed into law.

    She said: “At present, we are doing a lot of consultations with our colleagues, especially those saying the document did not address the frontier persons in the North.

    “I am optimistic that with the PIB before the National Assembly, it is expected that the gas sector will be unbundled. It will be more transparent. The process of entering and exiting from the gas sector will be very glaring when PIB is passed into law.”

    According to her, an attempt made by any section of the country to hinder the passing of the bill into law would be tantamount to doing Nigeria’s economy more harm than good and “shooting ourselves in the foot.”

    The lawmaker said the slow pace of gas development in the country should worry Nigerians due to its economic implications, stressing that the country needed to revamp the petro-chemical industry to increase its revenue generation base.

    Her words: “Investors cannot put in their money and sell their gas to the power sector at a dollar per thousand billion cubic feet. Whereas, the same volume of gas can still sell for $18.

    “We need to open up the sector so that investors can come into it. The executive arm of government should review the gas pricing policy in Nigeria to attract investors to the gas sector.

    “We are told that Nigeria in 2015 can earn over N15 trillion in gas if we apply the incentive measures. As it was done when the Nigeria Liquefied and Natural Gas (NLNG) came to being in 1989, the executive should look into the gas pricing policy and provide investors with mouth-watering incentives, such as tax shield, tax holiday and allow the investors to have a portion of processed gas exported, because right now, they are not allowed to export as we are trying to satisfy the domestic market.”

     

     

  • PIB: Southsouth student leaders decry delay

    PIB: Southsouth student leaders decry delay

    Student leaders in the Southsouth geo-political zone have protested against the delay in passing the Petroleum Industry Bill (PIB) into law.

    The students, under the aegis of the South–South Youths and Students Organisation (SSYSO) said the speedy passage of the bill into law would assist the host communities and empower youths in the area.

    Rising from an emergency meeting yesterday at the Rivers State University of Science and Technology (RSUST), Port Harcourt, the student leaders, who represent higher institutions in the region, decried the slow processing of the PIB.

    The President of SSYSO, Comrade Tonye Tom-George, who spoke on behalf of presidents of Students’ Union Governments (SUGs), said stakeholders should join a call to pacify the National Assembly over the need for a speedy passage of PIB into law.

    He said: “We are no longer comfortable with the delay in passing PIB into law. As students from the Southsouth region, our lives are tied to this bill. If passed into law, most of our youths will not only be empowered, but will also be economically- buoyant to face the challenges of life.

    “As representatives of students in higher institutions in the Southsouth, we want the National Assembly to note that continued delay in the passage of PIB into law may appear as a conspiracy against host communities in the region.

    “We take this opportunity to urge the management of the Niger Delta Development Commission (NDDC) to pay attention to project- monitoring.

    “There are many abandoned projects. NDDC should focus on project-monitoring and concentrate on the completion of existing projects.”

     

  • ‘Develop local content ahead of PIB passage’

    The Nigerian Content Development and Monitoring Board (NCDMB) has warned that until robust domiciliation of services and manufacturing of oil and gas equipment and components are achieved, the chunk of investment inflow into the sector would be lost to capital flight.

    The Executive Secretary of NCDMB, Ernest Nwapa, who spoke at the offshore technology conference in the United States, drew attention to the need to sufficiently domicile service and manufacturing ends of petroleum industry operations noting that failure to do so would mean that investments would flow into the country, but take flight in the form of overseas procurement of equipment used for operations and remuneration of expatriate personnel working on projects.

    To maximise benefits of investments inflow into the multi-billion dollar industry, Nwapa advised that concerted efforts be made to develop Nigerian Content, so that Nigerians and the economy derive value from the expected huge investment that would come into the sector after the passage of the PIB. Therefore, he said there is urgent need to expand discussions around the PIB beyond just the fiscal provision.

    He said: “It is expected that when PIB is passed, it would result in massive investment flow and those investments will yield revenue for Nigeria. But what the Board is concerned about is the kind of impact the bill on passage will give Nigerians in terms of employment on top of the expected revenue.

    “That type of impact would only come from the investments that result in domiciliation. It is a good thing we have had a three-year head-start in the implementation of the Local Content Act, which has enabled us create some capacities in Nigeria such that as the PIB is being passed and investments come, we would have jobs arising from the investments being executed locally.”

    Nwapa canvassed for industry support for the Board’s initiatives especially the Oil and Gas Industrial Park Scheme and the establishment of a new pipe mill to support the existing SCC Mill in Abuja, adding that when the initiatives become successful, Nigerians would reap immense benefits from them.

    He said: “It is a good thing to get the investments in because we need to increase our revenue intake from oil production, but the real endgame for us is to ensure that as we are getting revenues, we are getting our people to work.

    “Government agencies can only employ a few thousands, but the real employment can come from commercial activities that would arise from our preparedness to expand operations.”

  • PIB debate‘ll produce robust Act, says DPR

    •Flays multiple regulation

    The continued dialogue and debate on the Petroleum Industry Bill (PIB) by stakeholders will produce a robust and balanced Act at the end of the day, the Department of Petroleum Resources (DPR) has said.

    Its Director of DPR, Osten Olorunsola, disclosed this while fielding questions from reporters at the Offshore Technology conference in Houston, Texas where the Nigerian delegations focused on the PIB.

    Olorunsola said the more the dialogue, the closer the middle ground where the provisions in the bill would be accepted to all stakeholders. He, however, noted that out of the over 200-page document, only provisions in 10 pages are seen as contentious and often discussed.

    He said: “My view is that you cannot take away the importance of dialogue. The more we discuss, the more we share; the more the chances that we will get to a common ground at some point. In my view, I am quite happy with what has happened at this conference. It shows there is still a lot of interest. The mere fact that people are speaking their minds is even the important thing. If people keep quiet over their views, it does not help.

    “It is nice that people came up with their views because it makes the key areas of gaps narrow down. If I will take the words of Hon. Samson Osagie, Deputy Chairman, House Committee on PIB, we will soon see the end of the PIB.”

    On the divergent views of stakeholders on the bill, Olorunsola said it has several pages. The areas of divergence you are talking of are less than 10 pages. People have been repeatedly talking about these 10 pages, completely undermining the 200 pages that are areas of convergence. We should focus more around where we have actually agreed. People can choose to look at a cup half empty. I like to look at a cup half full. Let us give attention to the 200 pages that we have convergence, but address these little areas that are remaining.

    “In my view, there are three or four things people are still talking about. If they don’t talk about fiscal gaps, they talk about host communities, or institutional authorities. But there are several other parts we can actually run with. We should not stop talking about these little areas that are remaining. In any case, after going through the PIB for 12 years, if it is only three or four areas that are remaining, we can try and resolve them. My view is that we should not spend another 12 years trying to fix these three or four items. Where we are today, we are ready to go. I think half PIB is better than none,” he added.

    The DPR chief also agreed with the operators on the issue of multiple regulators provided in the bill. The operators were of the view that multiple regulations are unhealthy and do not do anyone any good. Their view is that the PIB could have reduced or streamlined regulations but rather it created multiple regulations.

    He said it is true that PIB created multiple regulations, adding that it is an area to be looked. “It is an area that still has to be looked at, not from the point of what can be resolved in Nigeria alone, but actually looking at the benchmarks across the whole world. Apart from fiscals, one thing international investors look at is the robustness, simplicity and transparency of your regulation.

    “The National Assembly is aware of that. I think they will look at it very well. However, in looking at it, we also have to take our local environment into consideration. The mere fact that there is only one regulator does not mean that we cannot have another two or three. The only thing is that it has to work. It does not have to become a bureaucracy to the industry. That is really the point. Any institution that has too many regulations, is recipe for disaster. I think the National Assembly will look at that angle,” he said.

    On whether the DPR is worried about the streams of regulations as some of its functions are being whittled down in the process, he said it is not just the DPR, adding that even the PIB itself has addressed it to some extent. He said: “Even some of the extant regulations that have been around, have been somehow addressed in the PIB. However, we have to wait until it becomes an Act.

    “If it does not become an Act, all will still continue to parade themselves as regulators. We have made our views known very well. In any case, we were part of the team that put the bill together as an executive arm. Let us all wait and see the wisdom of the outcome of the National Assembly,” he added.

  • South-South PDP pushes PIB

    South-South PDP pushes PIB

    The South-South caucus of the Peoples Democratic Party (PDP) has urged the support of the National Assembly in the passage of the Petroleum Industry Bill (PIB).

    It noted that when passed into law, the PIB “will launch Nigeria into the next level of sustainable development of our hydrocarbon resources.”

    In a communiqué read in Asaba yesterday, the PDP caucus called for a review of the present Revenue Allocation Formula, adding that the formula has “long ceased to reflect the changing realities.”

    It called for its urgent, reasonable and pragmatic review to achieve vertical and horizontal equity among the tiers of government.

     

     

     

     

     

  • Can National Assssembly pass PIB?

    Can National Assssembly pass PIB?

    The Petroleum Industry Bill (PIB) has polarised the House of Representatives members into the protagonists and antagonists. Correspondent VICTOR OLUWASEGUN, who witnessed the public hearing on the bill, reports that the division in the House mirrors the divided opinion among the various stakeholders in the polity.

    PIB GREY AREAS

    • Fiscal regime

    • Dispute resolution

    • Petroleum Technical Bureau

    • Upstream inspectorate

    • Downstream inspectorate

    • Host community fund

     

    The House of Representatives is in a fix over the Petroleum Industry Bill (PIB). The executive bill, which was Presented to the House by President Goodluck Jonathan, has polarised the legislators.

    The lawmakers from the South have no objection to the bill. But their counterparts from the North are raising eyebrows. According to the Northern legislators, the passsage of the bill will further widen the revenue distribution gap between the North and South, thereby pauperising the North.

    So far, there is no consensus between the two blocs. When the House organised the public hearings on the contentious 493-chaptered bill recently, the views mirrored the antagonistic positions of the legislators. They also reflected the Noth-South dichotomy.

    The public hearings took place in Lagos (Southwest), Port Harcourt ( Southsouth), Enugu (Southeast), Kaduna (Northwest), Ilorin (Northcentral), and Gombe (Northeast).

    The bill is meant to establish institutions, regulatory authorities and legal frameworks for the petroleun industry. It is also meant to stipulate rules for the operation of the upstream, midstream, and downstream sectors. But the proposed law is also expected to make it mandatory for the giant oil companies and other operators to embark on development projects in the oil-producing areas.

    Many Nigerians believe that the bill will compel the government to strive at probity, transparency and accountability in the sector. According to the late President Umaru Musa Yar’Adua, who first mooted the bill, it would revive the industry and avert the attacks on pipeline and constraints on investment.

    The amalgamated bill is a fusion of the 16 petroleum laws.The House Committee headed by the Chief Whip, Hon. Isiaka Bawa, commenced work after its formal inauguration on March 13, with a retreat with stakeholders in Lagos. But when the Senate beamed a searchlight on the sector, the remark by Senator Ita Enang that 83 percent of the oil blocs are owned by Northerners inflammed passion.

    In the Lower Chamber, the 10 percent proposed for community development in the oil-producing areas has been the bone of contention. According to northern legislators, them, it amounts to allocating more revenue to the Niger Delta.

    To douse the tension, Bawa, who addressed reporters in Abuja, the Federal Capital Territory (FCT), said that the House had no hidden agenda. He explained that the bill is important because oil is the live-wire of the country’s economy.

    “The bill is still in a raw material form and that is why we are subjecting it to scrutiny. What we are doing is subject it to the overriding interest of Nigerians and what obtains at the end of the day is what Nigerians decide”, he added.

    The public hearing gave opportunities for the stakeholders from the north, especially the civil society groups, to challenge the sweeping powers of the Petroleum minister. They said that the exercise of these powers could be abused.

    Kwara State Governor Abdulfata Ahmed said Section 6 of the bill is worrisome. “I am concerned here about the power that has been put together for the Minister because I see the Minister as a politician. We can’t allow the fate of 157 million Nigerians to be tied to the hands of a politician. It would be too dangerous.

    “Rather, I will suggest that we have an institutional framework that would sustainably be administering that portion of responsibility, that would ensure that on a continuous basis Nigerians would have a source of confidence, a source of belonging, and most importantly, a source of hope driven by persistent optimism in the future.

    “But it must be based on equity and justice, these two will keep us together as a country”, he submitted.

    His Kogi State counterpart, Capt. Idris Wada, who was represented by the Special Adviser on Petroleum Matters, Dare Adesina, echoed the same sentiment. “ It is evident from the PIB draft that a lot of power is vested in the Minister of Petroleum. If such powers lack the motive of making the Minister of Petroleum to be more productive, it should not be encouraged.

    “ We do not want a PIB passed where some roles and functions that was erstwhile exclusive to the President of the Federal Republic now scrapped off and given to the Minister of Petroleum.”

    Niger State Governor Aliyu Muazu, also lent its voice. to condemn the section.“ PIB 2012 grants disproportionate powers and authority to the Minister of Petroleum Resources over policy, regulatory and operational issues.

    “Thus, it is not justifiable to grant such enormous powers to a single functionary of a tier of government, given that the PIB deals with the Federation as a whole.

    “It is noteworthy to establish that such laws should not be enacted because of the present occupant; it should rather embrace generality and universality.”

    The grey areas of the bill, which also agitated the stakeholders, include fiscal regime (Section 3c), dispute resolution ( Section 115), unitisation (Section 180) and the establishment of Petroleum Technical Bureau ( Section 9), Upstream Petroleum Inspectorate ( Section 13), and Downstream Petroleum Inspectorate (Section 43), and the contentious host community fund.

    The Center for Democracy and Development, in a presentation by its Co-ordinator, Comrade Taiwo Otitolaye, also spoke on the power of the Minster.

    Otitolaye said: “The powers of the Minister of Petroleum and the discretionary powers of the President as contained in the bill should be unmistakably and distinctively clarified..

    “ The bill empowers the Minister to coordinate and supervise all the activities in the petroleum industry, including powers to grant, amend, renew, extend or revoke upstream and downstream petroleum licences and leases.

    “The draft law stipulates that the Minister of Petroleum Resources only gets the approval of the President. If these sweeping powers are not toned down, they can be abused.”

    After the public hearings, the question is: what next? Bawa said the final public hearing will hold in Abuja to give the committee for final collation of views. He said that, following the collation, the House willmove to the next stage in law-making.

    However, sources said that the foreign oil companies are plotting to frustrate the exercise. But Bawa dispelled the rumour, saying that the committee is not under any pressure from the firms.

    In the past, there were allegations that the Royal Dutch Shell, ExxonMobil, Chevron, Addax Petroleum, Agip and Total, who are opposed to the stringent terms of the new legislation, wanted to influence certain aspects of the bill.

    According to analysts, the proposed fiscal regimes in the bill would not only negatively affect future deep water exploration, but add to the long list of contending issues, including the high risks and costs of security and bunkering.

    Another source of concern is funding. Since the House has cut down on its spending, members who expected logistics assistance from host states were disappointed.

    On the appropriateness of the zonal public hearings, the Chairman of the Northcentral Public Hearing, Hon. Bassey Ewa was of the opinion that the exercise was necessary. He decried the poor attendance by the stakeholders.

    However, it was learnt that poor planning and lack of adequate communication contributed to the poor attendance of the event.

    Another legislator, Hon. Uche Ekwunife, who is also the Chairperson of the House Committee on Environment, lauded the initiative, saying that it would give credibility to the exercise.

    She raised points on the environmental issues being considered by the bill. “Environment issues is a global issue and you can’t talk of redeeming the petroleum industry without talking the damage the oil is doing to the communities where the oil is being produced”, Ekwunife said.

    Can any minority report be ruled out, judging by the division over the bill? A lawmaker, Hon. Osagie, who chaired1 the hearing in Lagos, said that there will be no minority report.

  • PENGASSAN urges FG to stipulate disbursement mode in PIB

    PENGASSAN has called on Federal Government to ensure that the structure and mode of disbursement of the Petroleum Host Community Fund (PHCF) were stipulated in the Petroleum Industrial Bill (PIB)

    Mr Chika Onuegbu, National Industrial Relations officer of PENGASSAN, told the News Agency of Nigeria (NAN) on Wednesday that the call was being jointly made with NUPENG.

    Onuegbu said that the mode and structure of the fund disbursement to host communities were not detailed in the PIB as well as the functions and objectives.

    `There must be clear provisions on the administration of the fund including such provisions, allowing the communities to decide for and by themselves the value-adding projects required by the respective communities.

    “We believe that the PHCF should include not just oil producing communities, but all communities hosting oil and gas resources and assets including downstream infrastructure.

    “This is because the entire value chain of the oil and gas industry has peculiar health, safety, environmental and community related problems.

    “A mechanism can then be developed to determine each asset’s criticality with the producing communities obviously being the most critical,“ he said.

    Onuegbu said with that no part of the country hosting any oil and gas resources, assets or facilities, would feel short-changed as it would derive socio-economic benefits from being a host.

    He said that the PIB was ambiguous on whether contributions by companies along oil and gas value chain to the PHCF would constitute immediate credit to total fiscal rent obligations.

    Onuegbu said that the PIB should be clear on such issues, adding that the fund’s provision in the PIB was polarised along political, regional and ethnic interests.

    NAN reports that PHCF laws propose that oil producing companies pay 10 per cent of their profits to the PHCF to provide socio-economic infrastructure in the host communities,

    The communities are not to draw from the fund if there is sabotage of petroleum facilities in their domain

  • PIB: Senate proposes Lagos, Abuja, others for hearings

    Chairman, Senate Joint Committee on the Petroleum Industry Bill (PIB), Senator Emmanuel Paulker, yesterday said the committee may conduct public hearings in Lagos, Abuja, Port Harcourt and Kaduna.

    Paulker spoke at a one-day PIB workshop organized by the Joint Committee in Abuja.

    The lawmaker said the workshop was meant to refresh the memories of the members of the committee on the PIB before they embark on public hearings.

    He said: “We are engaging services of professional to enlighten us on the bill once more so that when we go out for public hearing in various locations, we would be versed in everything concerning the bill.

    “Since we now want to commence the process of passing the Bill, there is need to invite professionals to refresh the memories of Senators of members of the National Assembly.”

  • PIB: North’s senators give fresh condition to pass bill

    PIB: North’s senators give fresh condition to pass bill

    Senators from the North are pushing for a fresh condition for the passage of the Petroleum Industry Bill (PIB) into law even as the stage is set for zonal public hearings on the contentions bill.

    They want the 10 per cent provision for Host Community Fund to be extended to all communities hosting oil wells, farm tanks, pipelines and depots.

    Ahead of the presentation of the new condition, the Federal Government has started lobbying senators on the merits of the bill.

    Some forces in government are pleading with Northern senators to give the PIB a chance.

    The senate is expected to conduct public hearing in Lagos, Abuja, Port Harcourt and Makurdi.

    But a major controversial area in the bill is the allocation of 10 per cent of the nation’s oil revenue to host communities.

    It was gathered that the senators are weighing a fresh option on the Host Community Fund.

    A source said: “I think there is a clearer picture to some extent. Senators from the North are saying that the 10 per cent Host Community Fund should not be limited to any region.

    “They want befitting communities to be those hosting oil wells, farm tanks, pipelines and depot installations.

    “The misconception before is that only communities with oil wells will benefit from the Host Community Fund

    “We have resolved that if this new condition is acceptable to the Federal Government and oil producing states in the Niger Delta, we will pass the PIB.

    “The argument of the senators is that all parts of Nigeria are exposed to oil exploration, refinery and distribution hazards.”

    Another source added: “The PIB is structured in such a way that oil producing states will be earning between 35 and 40 per cent derivation to the disadvantage of other parts of the country.

    “This is why we are insisting that the clause on Host Community Fund be an all-inclusive thing. Every state with oil installations or facilities must benefit from the 10 per cent fund.

    “This is the only condition for the passage of the bill.”

    A third source said: “We are also opposed to the discretionary powers given to the Minister of Petroleum Resources. Those powers are unnecessary because they will make a sitting oil minister more powerful than the President. The ball is in the Federal Government’ court to accept these conditions or not.”

    The Senate might hold public hearing on the PIB in Lagos, Abuja, Port Harcourt and Makurdi.

    Although some senators from the North prefer Kaduna, but others settled for Makurdi because of the security challenges in the former capital of the defunct Northern Region.

    A senator said: “Lobbyists from government have been desperately trying to woo North’s senators to ensure the passage of the bill.

    “They are saying that the Host Community Fund is harmless but North’s senators see it as a booby trap to get additional 10 per cent derivation for oil producing states, especially those from the Southsouth.

    “It is left to the government to allay the fears of the North in the bill in order to move forward.”

    The Northern States Governors Forum (NSGF) last week rejected 10 per cent vote of the nation’s petroleum income to host communities.

    The Forum said the creation of Host Community Fund is a ploy to give more revenue to oil producing states.

    The governors made their position known in a memoranda to the House of Representatives ad-Hoc Committee on PIB.

    The memo, signed by the Chairman of the Forum, Governor Babangida Aliyu, reads: “The most controversial provision of PIB 2012 is the introduction of the Host Community Fund which is creating a fourth tier of Government in the sharing of the revenue of the Federation.

    “Whereas the constitution of Nigeria recognises only three tiers of government in directly accessing the Federal Reserve and the Niger Delta Development Commission (NDDC) is meant to take care of the special needs of the host oil-producing communities.

    “The PIB does not state exactly what constitutes a Host community or how funds will be conveyed to the community. The provisions of the PIB 2012 relating to the Host Community Fund touches on the question of the revenue allocation and utilisation in a federation such as Nigeria.

    “The constitution already allocated 13 per cent of the Petroleum income as derivation precisely to cater for the special needs of petroleum producing communities; the 10 per cent Host Community Funds in PIB 2012 is merely an attempt to extend this through an act of the National Assembly without the required constitutional amendment.

    “In other words, the issue of derivation has already been exhausted in the constitution. What is rather needed to be done is improvement on the present derivation factors and formulas to correct disparity and open other opportunities for other part of the country.”

     

  • ‘IOC’s divestments will create prospects for local firms’

    Oil and gas experts have called for fair and effective legal and regulatory framework in the medium and long term to enhance investments and growth in the sector.

    They frowned at the prolonged reforms of the government through the non-passage of the Petroleum Industry Bill (PIB).

    Speaking at the ESQ Energy and Oil and Gas Summit in Lagos, the Managing Partner, Caxton-Martins (a service commercial law firm), Sola Adepetun, said: “The legal and regulatory atmosphere of uncertainties and legal risks is unsustainable and the PIB must be enacted expeditiously to provide the needed legal solutions.”

    Adepetun, who spoke on The evolving legal and regulatory framework governing the Nigerian petroleum industry: Examining the challenges, risks and opportunities, explained that if the PIB cannot be enacted expeditiously enough, a review of relevant existing laws and regulations should be carried out in the short to mid-term to effect required amendments, new regulations and guidelines.

    The Executive General Manager, Public Affairs and Communications, Total Upstream Companies, Chidi Momah, said the IOCs support the PIB and believe there is need for reforms as the Act is over 40 years. He, however, noted that there were concerns if the PIB will achieve the stated aim that will enable IOCs in Nigeria to move forward.

    The Legal Adviser, Mart Resources Inc., an independent Canadian oil and gas firm, Mrs. Asiyah Alao-Mutallab, advised that with the increasing divestments from IOCs, Nigeria needs to look at how to attract foreign investors and keep them.