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Tag: PIB

  • PIB: Host communities demand gas flare penalty cash

    PIB: Host communities demand gas flare penalty cash

    • Northcentral states seek reduction of Minister’s power

    Leaders of host communities of oil and gas producing states in Niger Delta have called on the Federal Government to stop paying gas flare penalty into the Federation Account. They said such funds should be paid to them instead.

    They stated this in a memorandum they submitted to the House of Representatives Committee on the proposed Petroleum Industry Bill (PIB) at the Presidential Hotel, Port Harcourt, yesterday.

    The host communities said they would no longer tolerate the present formula of paying gas flare penalty into the Federation Account.

    In the memorandum presented by Ajobo Edward to the Chairman, House of Representative Adhoc Committee on PIB, Hon. Ishaka Bawa, he said the host communities are the ones bearing the pains of gas flare.

    “The host communities have by the reason of this hearing decided that henceforth the gas flare penalty should not be paid into the Federation Account, because the host communities do not share the pains of the devastating effect of our environment with anybody and so the money should not be shared with anybody.

    “Oil and gas is treated as a national asset, but the same cannot be said of gas flaring and its environmental implications to its immediate environment. This section must be expanded to include payment of gas fines to the communities through host oil and gas communities.

    The host communities also demanded the establishment of petroleum host communities’ trust fund.

    “We need the establishment of host communities’ petroleum trust fund to manage 10 per cent profit to be paid to host communities,” they added.

    Meanwhile, Hon. Ishaka Bawa, the Chairman House of Representative Adhoc Committee on Petroleum Industry Bill, said: “The House quickly swung into action by taking the bill through first and second readings before committing it to this Adhoc Committee for further legislative action.

    “I wish to report here that the Adhoc Committee has so far undertaken extensive work on the bill leading to today’s public hearing.

    Meanwhile, states in the Northcentral geo-political zone of the country have kicked against the power of the Minister in the proposed Petroleum Industry Bill (PIB).

    They said the sweeping powers granted the Minister in Section 6 of the PIB will lead to abuse, if not toned down or completely removed.

    Speaking during the Northcentral zonal hearing on the PIB organised by the House of Representatives yesterday, Governor of Kwara State, Abdulfata Ahmed, said Section Six of the proposed bill is worrisome.

  • Oil workers urge speedy passage of PIB

    Oil workers have called on the National Assembly to expedite action on the passage of the Petroleum Industry Bill (PIB) to attract investment into the sector and grow the national economy.

    The oil workers, acting under the aegis of Petroleum and Natural Gas Senior Staff Association (PENGASSAN) and its counterpart, Nigeria Union of Petroleum and Natural Gas Workers (NUPENG), lamented that investors are relunctant to invest in the sector because of the uncertainties surrounding the PIB which has generated bitter acrimony among members of the National Assembly.

    Adopting NUPENGASSAN as acronym for the two unions, the oil workers said: ”Investors have continued to adopt a wait and see attitude, refraining from making any new investment pending the passage of the bill.”

    They, therefore, called on the National Assembly to ensure that the provisions of the PIB covers not only the agencies and companies created under the proposed law but all companies operating in the petroleum sector.

    Addressing reporters in Lagos, PENGASSAN President, Comrade Babatunde Ogun, observed that the PIB proposes to exclude the successor companies to the Nigerian National Petroleum Corporation (NNPC) from the operations of the Fiscal Responsibility Act (FRA) and Public Procurement Act (PPA).

    He argued that the involvement of all the companies will ensure transparency and erase the “black hole” perception of the oil and gas industry, adding that the proposed law was to check inherent corruption and misappropriation of funds in public entities.

    Ogun, who spoke alongside NUPENG President, Igwe Achese and other National Administrative Council (NAC) members of both unions added that subjecting the NNPC successor companies to the FRA and PPA will further entrench transparency and accountability in the organisations.

    However, he was swift to state that the time frame for approval by FRA and PPA should be within a short period to avoid unnecessary bureaucratic bottleneck.

    He said the provision of the PIB granting the president “discretionary powers” to award petroleum licenses and leases should be expunged from the bill as it is a recipe for cronyism and corruption.

    “One of the major areas of grave concern about Nigeria’s petroleum industry has been the opaque nature of the industry. Many processes and activities are shrouded in mystery that controversies usually arise even amongst government agencies on matters such as the country’s daily production or revenue arising from there.

     

    He also recalled occasions when Nigerian’s presidents and their petroleum ministers awarded lucrative oil blocks to themselves or their conies.

    “It is commendable that the PIB provides that agencies and companies established under the proposed law should be bound by the Nigeria Extractive Industries Transparency Initiative. However, to ensure greater transparency, it is important that the provision covers not only the agencies and companies created under the PIB, but all companies in the petroleum sector,” Ogun stated.

    Ogun, while calling on the National Assembly to expedite action on the passage of the bill noted that investors are refraining from making any new investment in the sector pending the passage of the bill.

    He stressed that the country cannot afford the luxury of time while politicians indulge in unnecessary bickering over such an important bill on a sector that is the main stay of the economy.

    “We believe that the PIB represents a great opportunity for Nigeria to ensure a solid foundation on which the future of oil and gas operations in the country will rest. Also, that the petroleum resource which Nigeria have been endowed, work for the benefits of the Nigerian people.

    “Nigeria therefore cannot afford the luxury of time while politicians indulge in unnecessary bickering over such an important bill on a sector that is the main stay of our economy accounting for over 90 per cent of our foreign exchange earnings, about 40 per cent of the Gross Domestic Products (GDP) and 80 per cent of government revenue,” he added.

    The oil workers specifically demanded their inclusion in the Boards of the following Agencies/Institutions, to further ensure transparency- National Petroleum Inspectorate (which should incorporate Upstream Petroleum Inspectorate and the Downstream Petroleum Regulatory Agency proposed by the PIB), Petroleum Technology Development Fund (PTDF), Petroleum Equalisation Fund (PEF), Petroleum Host Community Fund (PHCF), National Petroleum Assets Management Corporation, National Oil Company (NOC), National Gas Company Plc (NGC) and Petroleum Training Institute (PTI).

     

  • Expert seeks more scope for PIB

    Expert seeks more scope for PIB

    An industry expert, Dr. Chidiebere Ogbu, has stressed the need for the Petroleum Industry Bill (PIB) to be encompassed in all minerals, such as gold, lead and bitumen in the country.

    Dr. Ogbu, who described the criticisms and fight against the PIB by the north as baseless, said what could have been the focus is the substance of provisions in the bill and how do they affect the communities from where resources are extracted.

    He lamented that 55 years after oil was discovered in Nigeria, the country doesn’t have an operating manual. “I am scandalised because I have seen only four draft bills for PIB. One draft made in 2007, 2008 another in 2009 and the current and last in 2012,” he said.

    The expert expressed dismay that some people including honourable lawmakers would oppose a bill meant to develop oil communities. He said Section 7 of the PIB states: “The Federal Government shall in co-operation with State and Local Governments and Communities encourage and ensure the peace and development of Petroleum Producing Areas (PPA), of the Federation through the implementation of specific projects aimed at ameliorating the negative impacts of Petroleum activities. Tell me why any human being can oppose such agreement. Oil, he said, can be found in any community or part of Nigeria any time and the same provision would apply, therefore, the community development is not meant for south-south communities but any community where oil would be found in future.

    He said if the PIB seeks to create a conducive business environment for petroleum operations and benefit Nigerians, it must be supported.

    Dr. Ogbu said if one removes petroleum in community development in PIB and substitute with electricity, dam, gold, lead, silver, diamond, coal, columbite, asphalt, tin ore or any other mineral resources prospected in Nigeria, the community development is the same.

    “Imagine the fatal incident that happened in Taraba State, because we do not have a regulatory bill in Nigeria, a firm that was prospecting for gold accidentally struck lead, because there was no precautionary and feasibility studies, children were exposed to radiation of lead, and as I write 209 children have died. It is only now that cataclysm occurred that Nigerian Government began to make efforts to bring in foreign experts for detoxification and cleansing of the land. If we had signed Mineral Industry Bill (MIB), those innocent children wouldn’t have died,” he said.

    He cited the April 20, 2010 Deep Water Horizon incident, in which a Transoceanic Deep Sea drilling rig working for British Petroleum (BP) in Gulf of Mexico on the Maconda Prospects located on the Mississippi Canyon Block 522, 48 miles from Coast of Louisiana caught fire, and burned for 36 hours killing 11 rig workers and leaked about 200,000 gallons of oil per day.

    He said because America has community development contract in the Petroleum Industry Bill signed between American Government and British Petroleum, President Barrack Obama forced BP to deposit $20 billion in escrow account, from where disbursement for cleaning and compensation were made.

    He said: “As I write, there is still a balance of $7 billion in that escrow account, which Obama said should be left until the long-time effect of the oil pollution, has been studied and observed. He said the remaining money could be used for compensation in case of any eventuality. The money has a legislative backing. This is the kind of policy we should advocate.

    “I have taken time to listen to debates, comments and write ups for and against PIB. What is missing is that people left the body of the matter to chase shadows. Some people want to throw away the baby with the dirty water. What I wanted to hear from debaters or read from commentators was that PIB should be an acid test, a magic wand that should revolutionise all drilling or mining activities in Nigeria. In fact, it should be our touchstone in regulating anything either extracted from ground, water or surface.

    “The PIB should be so well packaged that it becomes a pathfinder to any mineral exploitation. One thing amazing is that people are behaving as if the President would rule Nigeria forever or as if the Minister of Petroleum would always come from South-South. Nobody has bothered to reason, what if tomorrow, a more toxic and corrosive substance is discovered in my village? What will be the parameter for regulating any company that would extract it, since by acts of omission or commission we have succeeded in killing and burying the PIB.

    “There is no perfect bill; the operators are those that make it good or bad. Lord Denning of Britain of blessed memory said in his memoirs, “nobody should say that the law is an ass, unless you are calling him one. That all the rulings he gave in his career as a judge were always guided by humanity.”

    He added: “Commentators said out of 17 oil ministers Nigeria has had since independence, only two are from Southsouth. However, whatever position we may advance today, let us give our agitation a human face, like Lord Denning of Britain would say, let us be guided by humanity.

  • Senators, Reps give conditions to pass PIB

    Senators, Reps give conditions to pass PIB

    Although the Petroleum Industry Bill (PIB) has scaled through second reading, North’s senators have not given up on their opposition to its passage.

    They have reduced their demands to two, which they said the National Assembly must address before passing the bill into law.

    The demands are the removal of the discretionary power given to the Minister of Petroleum Resources to determine royalty and the 10 per cent Host Community Fund, which will give oil producing states more revenue than the 19 states in the North.

    They are seeking, also, the reduction of the powers of the Minister of Petroleum Resources as contained in the bill.

    The senators have become positive about the bill, but their counterparts in the House are still uncomfortable with it.

    The two demands were the highlights of a session of the Northern Senators Forum held in Abuja last week.

    Although the meeting was stormy on why the Chairman of the Forum, Senator Umaru Dahiru, travelled abroad for a conference when the debate on the bill was before the Senate, wise counsel later prevailed

    A source, who spoke in confidence, said: “We spent the session to review the debate on the PIB on the floor of the Senate and how an attempt was made to scandalise the North by falsely claiming that its leaders own 83 per cent of the nation’s oil blocks.

    “Members of the Forum expressed regrets that their chairman travelled out of the country, which led to a gap in reacting to Senator Enang’s wrong impressions created in Nigerians about the North.

    “To keep the Forum united, we decided to retain the leadership of the Forum but with a caveat that it should be up and doing.”

    On the PIB, another high-ranking senator said Northern Senators agreed on some merits in it but they listed two conditions which must be fulfilled before it is passed into law.

    The source added: “The conditions are the removal of the discretionary power given to Minister of Petroleum Resources to determine royalty and the review of the 10 per cent Host Community Fund, which will give Oil Producing States more revenue than the 19 states in the North.

    “We all agreed that the PIB will make a sitting Minister of Petroleum more powerful than the President.

    “Once these two issues are addressed, the PIB will receive the support of Northern Senators.”

    But while the Senators have soft-pedalled on their opposition to the bill, members of the House of Representatives from the North are opposed to it.

    A member of the House, who spoke with our correspondent, said: “We are standing by our position in the document prepared by the Northern Governors Forum and members of the National Assembly from the North.”

    He said our grievances are as follows:

    •Discretionary power given to Minister of Petroleum Resources to determine royalty;

    •The host community fund will give oil producing states more revenue than the 19 states in the North

    •Divestment of equity in National Oil Company and the National Gas Company will favour the South

    •Lack of consultations with states on PIB; and

    •No plan for gas supply to the North in the bill

    He quoted a part of the document as saying: “On top of the 13.5 per cent statutory derivation from the Federation Account, the mandatory Federal budgetary allocation to the Ministry of Niger Delta, the Niger Delta Development Commission (NDDC) levy of 3 per cent of oil operations and the massive amount of Federal funds being spent on the Niger Delta Amnesty programme, the new PIB is adding 10 per cent of the profit of all Oil and Gas companies to the Niger Delta States and Communities.

    “Currently, without this new addition, four states (Akwa Ibom, Bayelsa, Delta and Rivers) earn more that the 19 Northern States combined. One wonders what kind of federation we would end up with if this situation is escalated by the new PIB. In any case, what really is the constitutional standing of this particular provision in the Bill?

    “These and many more other issues in the Petroleum Industry Bill need very close scrutiny by the Northern Governors Forum. Without this exercise, it is very possible for the states in the region to be legally short-changed through the process of legislation despite having the majority membership in the two chambers of the National Assembly.”

     

  • PIB for second reading at Senate

    PIB for second reading at Senate

    ALL was quiet yesterday at the Senate as the inflamable Petroleum Industry Bill (PIB) smoothly scaled the second reading.

    The seamless passage of the bill to the committee stage surprised many in the gallery.

    Apparently because of the revelation on Wednesday that northerners own more than 83 per cent of oil blocks, the Senate gallery was filled up.

    LL was quiet yesterday at the Senate as the inflamable Petroleum Industry Bill (PIB) smoothly scaled the second reading.

    The seamless passage of the bill to the committee stage surprised many in the gallery.

    Apparently because of the revelation on Wednesday that northerners own more than 83 per cent of oil blocks, the Senate gallery was filled up.

    Those at the gallery who expected a stormy session left disappointed when nothing of such took place.

    Senate President David Mark, who summed up contributions by senators, declared that the PIB is not North versus South affair.

    He noted it was obvious that what is good for the North is also good for the South and what is bad for the South is bad for the North.

    He said that the bill, like most Senators pointed out, is the life-wire of the country.

    The bill, he added, has national interest as well as international interest.

    He said: “We are very united on the fact that so much power is given to the Minister, particularly where the minister can grant lease unconditionally; you can also revoke lease unconditionally.

    “We also all agreed that the frontier exploration services should be properly funded and independent and the time within which it will complete and start prospecting for oil in all parts of the country.

    “Those who spoke very strongly for South-South or Niger Delta also emphasised this, and this was an area where people expressed fear.

    “The fact of the matter is that we all need to be on the same wave-length.

    “I must emphasise that the bill is not North versus South; far from that, because what is good for the North is also good for the South and what is bad for the South, is bad for the North.

    He said that the PIB will go for second reading and public hearing and “by the time it comes back, their will be amendments, additions and subtractions.”

    For those who think that the draft bill is final, Mark made it clear that “the draft bill that has been given to us is not sacrosanct”.

    Mark said: “So I want to say that the bill is a worthy bill. The important thing is whether the bill guarantees the transparency we want in the petroleum sector, because that is a key issue because there is no transparency at the moment.

    “Does the bill ensure that more revenue accrue to the government and by extension to the people and more importantly does the bill ensure the independence of the new companies that will come out from the unbundled Nigeria National Petroleum Corporation (NNPC) and, finally, does the bill encourage investment?

    “Does it provide an enabling environment for investors to come and invest in Nigeria?

    “We are all conscious of the fact that almost all African countries are nearly oil producing countries, so the competition is stiff more than what it used to be before.

    “There is also the issue of host community fund; that is the one that is most contentious. But the background to it is that the monies accruing to the Niger Delta have not been properly utilised. That is the fear that is the underlining fear of everybody.

    “Everybody that spoke here agrees that the host community needs to benefit; it is how they benefit that has been a problem.

    “The fear is whether the 10 per cent for the host community will be another pipeline where a few characters would hijack it at the expense of the host community.”

    Mark rejected the suggestion that an ad-hoc committee to consider the bill at the committee and public hearing levels.

    To Mark, there are provisions in the bill that seem impracticable

    “There is the issue of pipeline passing through communities.

    He said: “There are so many things in this bill that are impracticable.

    “I think in theory they may sound nice but if a pipeline and the current pipeline from Kaduna passes through my local government and through about three, four local governments.

    “How are each of the local governments going to quantify for the money that would be given to us?

    “Is it by the length of the pipe that goes through or by the volume of products that is pumped through?

    “It is not just a practicable thing.

    “To me it is just an avenue where a handful of people will come together and manipulate government and then siphon money.”

    Mark also underscored the need for a regulatory agency to control the industry.

    The bill, he said, must ensure that there is transparency in the industry “because very few people know what is happening.

    “I do not know what is happening in that industry and I have tried to (know) but it looks like a Mafia world where nobody is willing to tell you anything.

    “So the bill must ensure that the industry is opened up and there is transparency.”

    Mark said that the drafters of the bill have tried to make it an exceptional bill.

    He wondered how it could be suggested that the bill should be exempted from the procurement act?

    He described the situation as “scandalous”.

    Senator Olubunmi Adetunmbi (Ekiti North) said his position on the bill is largely that of regulation because there are basic principles for legislating for regulatory authorities.

    He said: “For every commercial sector of the economy in Nigeria , there is a distinct regulatory authority that is established by the Act of Parliament. We have the Central Bank of Nigeria that is regulating financial services. You have Civil Aviation Authority that is regulating the aviation sector. You have PenCom for Pensions and you have NIACOM for Insurance.

    “The question is, what is the regulatory agency for the petroleum sector?”

    The bill was passed over to the joint committee of Petroleum (Upstream), Petroleum (Downstream), and Justice and Human Rights.

    The joint committee was given six weeks to work on the bill and conduct public hearing before returning it to the committee of the whole for clause-by-clause consideration.

  • Senators divided on PIB’s 10% host community fund

    Senators divided on PIB’s 10% host community fund

    There were fireworks in the Senate yesterday as the debate on the controversial Petroleum Industry Bill (PIB) began.

    The “Bill for an Act to provide for the establishment of a legal, fiscal and regulatory framework for the Petroleum Industry in Nigeria and for other related matters” was transmitted to the National Assembly by President Goodluck Jonathan on July 18, last year.

    It has been kept in the cooler due to stiff opposition to certain sections by mostly northern senators.

    The bill was first introduced in the 6th Senate but legislative action on it could not be concluded because some stakeholders claimed that several versions of the bill were in circulation.

    Yesterday, all was tense as some senators from the South laboured to convince their northern counterparts to back the bill.

    While some diehard northern Senators who contributed to the debate insisted that the bill should be “sent back to the sender”, others said it should be allowed to scale the second reading for tinkering at the committee level.

    Areas of major disagreement during the debate included the 10 per cent host community fund, the alleged excessive power the bill gives to the Minister of Petroleum Resources and frontier exploration for oil deposits.

    Deputy Senate President Ike Ekweremadu observed that “these are areas we can resolve as patriots and leaders of our country.”

    Senate Leader Victor Ndoma-Egba (Cross River Central), in his six-page lead debate, gave reasons why the 7th Senate should make history by passing the bill.

    Ndoma-Egba appreciated that given the mono-cultural nature of the country’s economy and its almost total dependence on oil, “the Bill has understandably elicited deep local and international interest as the oil industry, especially in terms of technology, expertise and economics, is global”.

    He noted that the Bill, when passed, will fundamentally alter the legal, fiscal and proprietary dynamics and regime of the oil sector.

    He said: “It will harmonize and consolidate the diverse and disparate laws, about 16 of them, that today govern and regulate the sector.

    “It is easily one of the most important Bills to be considered by this distinguished and hallowed chamber.”

    Ndoma-Egba listed part of the objectives of the bill to include, to harmonize and consolidate the several disparate legislations that govern and regulate oil industry, thus, making its legal framework more user friendly; to enhance exploration and production of petroleum resources through robust production allowances in both oil and gas; significantly increase domestic gas supplies especially for power and industry; to ensure accelerated gas infrastructure development through private partnership by, in addition, addressing funding issues associated with slow development of the country’s gas infrastructure which is the backbone of the country’s power sector reform agenda.

    He said, “The PIB under consideration is easily one of the most revolutionary bills to be considered, I dare say, under our current democracy.We will indeed be making history if we passed this bill.”

    Senator Alkakali Jajere (Yobe South) said the bill contained a lot of issues that needed to be streamlined before it could be passed especially the 10 per cent host community funds.

    He described the powers conferred on the Minister of Petroleum in the Bill as “much” “too wide” and “uncontrollable”.

    Senator Mohammed Ali Ndume (Borno South), that areas of concern include “a lot of inconsistency with the oil and gas implementation policy framework which has been endorsed by the President”.

    On the host community development, he urged the Senate to introduce host community equity participation, saying host communities should be part owners of the industry instead of having a percentage.

    Senator Ahmed Lawan (Yobe North) said: “I want to see an oil industry that gives the country much revenue, fairly independent of government and very transparent where revenue and resources generated are known to citizens.

    “Today Nigerians and even this government don’t know how much oil we produce in this country. Even the Accountant General of the Federation doesn’t know how many accounts the NNPC operates.”

    On the provision for 10 per cent host community fund, he said N7.2 trillion paid in the last 13 years as 13 per cent derivation is not to build cities but for the communities where oil prospecting takes place.

    He quoted Chief Edwin Clark, an Ijaw leader, to have allegedly stated that N7.2trillion has so far been misappropriated under the 13 per cent derivation.

    “If they (Niger Delta States) did not use it for the communities, they failed the people,” Lawan said.

    Senator James Manager (Delta Central) raised a point of order and accused Lawan of using offensive words against Niger Delta states.

    Senator Heineken Lokpobiri ( Bayelsa West) also raised a point of order and accused Lawan of using newspaper articles to make his points.

    Senate President David Mark ruled both out of order

    Lawan added: “I want my colleagues to look at 13 per cent derivation in the last 13 years equals N7.3trillion; NDDC an estimate 10 years equals N2.7trillion; Ministry of Niger Delta Affairs from 2007 to 2012 equals about N50billion. Amnesty programme 2009 to 2012 about N250billion, excess crude account and the last one Rivers got what all other states combined did not get, about N53billion. Special Presidential Initiative, including Ecological Fund, about N73billion, totalling about N11trillion.”

    He said that there is nothing to show for the huge amount they have been collecting.

    But Senators Ifieanyi Okowa (Delta North), Ben Ayade (Cross River North) and Helen Esuene (Akwa Ibom South) addressed the points raised by Lawan and others.

    Okowa noted that the basic issue is that “we have had lots of laws guiding the operation of the petroleum industry but the PIB is meant to consolidate all the laws”.

    He noted that the bill may not be perfect, coming from the Executive, but it is the duty of the Senate to ensure the right thing is done.

    He said that bill addressed Nigeria local content law to be applicable in the oil industry, health and safety of the environment.

    On the host community fund, he said it is 10 per cent of the net profit of the oil companies.

    “So the money is not going to come from the distributable fund of the federation. It also spells out that if there is vandalisation, the money for repairs would be taken from the host community fund, which is intended to ensure security for oil infrastructure.

    “We need to allow this bill to be read the second time, go for public hearing and those areas that need to be amended can then be amended,” he said.

    Ayade noted that a major thrust of the Bill is to provide adequate funds for frontier exploration and production through intrusive and aggressive appetite for new oil and gas reserves.

    He said: “As we raise the stake, drum up the campaign in support of the PIB, it is instructive to note that a case for PIB is a case for Cross River State .”

    Ayade insisted that support for PIB must come with support for the special exploration of Cross River State for oil and gas deposits.

    He recalled that the government had earmarked $1 billion for Inland Basin exploration activities.

    Senator Esuene said the host community fund became necessary because oil communities are suffering.

    He said they should not be allowed to continue to suffer.

    The lawmaker also asked the Senate to reconsider the excessive powered given to the minister of Petroleum under the bill.

    Senator Bukola Saraki (Kwara Central)took a measured view of the bill and declared that it should be given a chance.

    Saraki noted that the country is carrying out reforms of the oil sector because it is believed certain things are wrong.

    He said the general principle should be that the sector must be reformed.

    He noted that it was wrong for anybody to expect that the Petroleum Act enacted in 1969 would still be relevant in 2013.

    Senator Isa Galaudu (Kebbi North) said that the bill should be returned to the sender.

    He said that it was not true that the host community fund would not affect other states, adding that the bill is set to deform the sector and not to reform it.

    Senator Bassey Otu (Cross River South) said, “History is in the making in this parliament because this is going to be one of the most important Bill to pass through this chamber.”

    Senator Danlandi Sankara (Jigawa northwest) said he is totally against the bill.

    Sankara said if 10 per cent is added to 13 per cent derivation, it would amount to 23 per cent deduction from the federation account.

    Senator Nkechi Nwaogu (Abia Central) supported the bill and asked her colleagues to back it in the interest of the country.

     

  • PIB, uncertainties delay Shell’s deepwater investment – Sunmonu

    PIB, uncertainties delay Shell’s deepwater investment – Sunmonu

    The delay in the passage of the Petroleum Industry Bill (PIB) and other uncertainties are holding back Shell Petroleum Development Company’s (SPDC) planned investment of about 30 billion dollars in two offshore deep water projects in Nigeria.

    The News Agency of Nigeria reports that the Managing Director of the SPDC, Mr. Mutiu Sunmonu, made the announcement on Wednesday in Abuja at the ongoing 13th Nigeria Oil and Gas (NOG-13) Conference.

    Sunmonu, who did not mention the projects when he spoke on “Strategies to Move Nigeria’s Oil and Gas Sector Forward”, noted that “SPDC will rather wait for stable and right conditions before it will commit finances to the projects.”

    He said it was regrettable that the country was losing huge revenues and investments, due to oil theft and bunkering because of the uncertainties and the delay in the passage of the PIB.

    He added that: “perhaps Nigeria’s oil and gas industry is slipping into the era when it took Mexico about 50 years to recover from such challenges in its oil industry.

    “I recall the Mexican story where it took the country 50 years to recover from the loss in its oil production and my worry is that we are slipping towards that.

    “If we produce a modest allowance of three million barrels per day and just assume a modest decline rate of 10 per cent that leaves us with 2.7 million barrels per day.

    “What this means is that for us to maintain that level of three million barrels per day, we must produce additional 300,000 barrels per day and that means that we need at least two deep water projects every year.

    “If you look at our onshore today, it is nowhere near the capacity we want it to be.

    “Most of what we have today come from our deep offshore operations but there are a lot more we can get out of onshore but that is where we have serious financing challenges.”

  • Uncertainty over PIB stalls Shell’s $30b investment

    Uncertainty over PIB stalls Shell’s $30b investment

    • ‘Nigeria loses 100,000bpd’

    The Country Chair of Shell Companies in Nigeria and Managing Director, Shell Petroleum Development Company of Nigeria Limited (SPDC), Mutiu Sunmonu, has said the delay in the passage of the Petroleum Industry Bill (PIB) and other uncertainties are holding back the company’s planned investment of about $30 billion in two offshore deepwater projects in Nigeria.

    The Group Executive Director, Exploration and Production, Nigerian National Petroleum Corporation (NNPC), Abiye Membere, also disclosed that Nigeria currently loses 80,000 barrels of crude oil per day (bpd) to bunkering activities. The volume reflects in production cut of 150,000 bpd.

    Sunmonu and Membere spoke at the special sessions yesterday at the Nigeria Oil and Gas conference in Abuja. Sunmonu said SPDC would rather wait for stable and right conditions before committing funds to the undisclosed projects.

    With the uncertainties in the oil industry, which include loss of revenue through oil theft and pipeline vandalism as well as the inability to embark on new projects and non-passage of the PIB, Sunmonu warned that Nigeria’s oil and gas industry may be slipping into the era when it took Mexico about 50 years to recover from such challenges in its oil industry.

    He said: “I recall the Mexican story, it took them 50 years to recover from that loss in oil production, and my worry is that we are slipping into that; even today if we produce a modest allowance of three million bpd and just assume a modest decline rate of 10 per cent, that leaves us with 2.7mbpd.

    “What this means is that for us to maintain that level of 3mbpd, we must produce additional 300,000bpd. It means that we need at least two deepwater projects every year and then you are talking about additional $30 billion investment every year for us to remain at that level, but that is not going to be easy.

    “If we look at our onshore today, it is nowhere near the capacity we have. Most of what we have today comes from our deep offshore operations, but there is a lot more that we can get out of onshore, but that is the place that has serious financing challenges.

    “Deep water portends a huge opportunity in Shell. We have two big projects we will like to do as soon as we are sure that the environment and the conditions are right. It will cost us about $30 billion, and I am sure it is the same with the other international Oil Companies (IOCs) because each of us has projects in the pipeline, but we are all waiting for the almighty PIB to be able to make these decisions.

    “It is very clear in my mind that the potentials are there, but turning those potentials to reality requires a lot of hard work, creative thinking and genuine value creation.”

    He was of the view that all stakeholders in the industry would make sure that they minimise the leakages in the operations today because crude oil theft continues to be a menace. If our country is losing 100,000bpd to 150,000bpd, that is huge. He said that some of the countries that parade themselves as oil producers today cannot even boast of 80,000bpd and if we are filtering away that much, then it calls for urgent action.

    Membere said the government is putting security measures in place to curtail the menace of oil theft in the country. He said the measures are yielding results, adding that the passage of the PIB will equally grant host communities opportunities to further provide security around oil installations, thus reducing the menace as the sector progresses.

     

     

  • Okowa: Senate ‘ll be fair to all on PIB

    Okowa: Senate ‘ll be fair to all on PIB

    Senator Ifeanyi Okowa (Delta North District) is the Chairman, Senate Committee on Health. In this interview with Assistant Editor AUGUSTINE AVWODE, he speaks on the Petroleum Industry Bill (PIB) and other issues.

     

    Before the Senate went on break, the PIB got a hostile reception when it was mentioned. Any hope for the bill in the Senate?

    On the day it was mentioned, many people felt the timing was not auspicious. It was observed that the nation was in a mourning mood, following the death of former Kaduna State Governor Patrick Yakowa and the former National Security Adviser (NSA), General Owoye Azazi. But some people, obviously, harbour some fears about the PIB itself. In their opinion, they are not satisfied with the bill as it was presented. But I think it will be taken in the early part of this year. The bill may not have been perfect, but notwithstanding the imperfections, we would look at it. That is why we are lawmakers. The executive is expected to bring in bills to us as proposals in whatever form. It is our duty to add, subtract or amend such proposals in a way that it will be favourable to all Nigerians. Don’t forget, we are expected to conduct public hearings. At such a forum, the Nigerian public, the oil companies and all other stakeholders that are affected one way or another, including governors, will have the opportunity to air their views on it. By the time we go through the legislative processes in the National Assembly, I believe that in the end we will be better informed about the bill. What we need to do is to voice our fears; yes, there is no doubt that there are obvious fears, but we should raise our fears during the second reading and allow it go into the committee stage and go for public hearing. We have been reading in the papers that the North feels a bit uncomfortable about the issue of host community fund. I don’t think that should bother anybody. To me, that money is actually coming from the oil companies. It is like, at the end of the year, whatever comes to them after taxation, 10 per cent would be ploughed back to the community to improve its economy and take care of other developmental needs. That is what everybody does all over the world. They call Corporate Social Responsibility (CSR). Some of the companies are already doing so, though not in an organised way. That clause is going to reassure the communities that they are part and parcel of the companies and, therefore, it behoves them to protect and keep the property of the companies in their domain. It will foster better relationship between the host communities and the oil companies because they would be looking forward to what would be returned to them at the end of the year. And it is good for the Nigerian economy because it will help to increase the quantum of production per day.

    The issues of exploratory agency and the powers of the minister have also been raised…

    Yes, in my view, that is a good point. But rather than attack a policy, it is better to propose what you think should be the alternative. It is best for the country if we prospect for oil and get more reserve in more parts of the country. It is for the good of the nation because we believe there is a lot of oil and gas in this country that is yet to be discovered. These are issues that can actually be sorted out. As for the issue of the powers of the minister, if they are discovered to be beyond what is necessary, they can be toned down to the level of control. That is why we are legislators. We can’t say, no, let us return it to the executive. If we do that, we would be telling the public that we don’t know how to do our job. But I can assure you that this Senate knows its job and whenever there is any inadequacy, it will always fill the gaps. And, if there are excesses, we will reduce the same and tidy things up and the bill will be made perfect. The truth is that, if you are bringing in about 16 different legislations into just one whole document and expect that we would not have these challenges, then, we are not being realistic. If a thing involves so many people and does not generate complains, then it is not a worthwhile venture. But everybody is interested in this case and our primary responsibility here is to be fair to all.

    Today, the debate over the local government autonomy is raging fiercely. What is your reaction?

    The constitution as at the moment does not confer a clear level of autonomy on local government as third tier of government. It is just a quasi-tier of government in which the states themselves are to make laws governing the structures, financing and administration. That is how clear it is. I think the governors have a right to hold their views but I think they should ensure that they look at the constitution and make sure the constitution is obeyed. We must ensure that we do things the way they should be done. As far as I am concerned, all tiers of government should see themselves as collaborative; as development agencies and impact the lives of people. I believe if every state government, working together with the local councils, get serious with administration; collaborating well enough, they will be able to bring the dividend of democracy to the people. When people see what is being done, nobody will harp on autonomy and the rest. The important thing is administering government in a manner that it will bring satisfaction to the people and this is what is lacking in some places, and that is why people are shouting.

    As the chairman of the Senate Health Committee, what are the challenges facing it?

    To start with, the Committee’s field is very vast. Apart from oversight functions of the Ministry of Health, there are a lot of agencies and institutions under it. These include the regulatory bodies, regulatory councils, the various tertiary health institutions which include the universities, medical schools and Federal Medical Centres (FMC), Psychiatric and Orthopaedic hospitals. Secondly, there is the issue of the challenges of legislation governing the health sector. Since October last year, we have been relating with the minister and other agencies and offering our advice as a committee on whatever we think should be the direction and also ensuring that the funds released from the 2012 Appropriation Act is properly utilized. Unfortunately, however, the level of release in the capital expenditure was obviously far from what we did anticipate. As at the beginning of November last year, when we were considering the 2013 Budget, only about 40-47 per cent had been released to the various agencies in the Ministry of Health. It was a general thing and I don’t think that was encouraging enough.

    You spoke about the challenge of legislation. What is it all about?

    In terms of legislation, we have looked into certain things. The National Healthy Bill, which was passed in the Sixth National Assembly, was actually not signed into law. Time was too short for the executive and legislature to sort out some minor issues and so, it lapsed. We have been able to look into the bill holistically, and, we have made some revisions in it. It has gone through the First Reading, it was also unanimously supported during the Second Reading, and it has now come to the Committee Stage. We are hoping that towards the end of the month or early February, we should have the public hearing and within that month return it for the Third Reading after which it would go to the House of Representatives for concurrence.

    What are the significant aspects of it?

    It is generally important because it sets out the legal framework for the regulation, development and management of healthcare in Nigeria. As at today, we don’t have the basic or foundation laws that guide the health industry. It is just guided by policies that do not have the effect of law. We have some specific legislation like NAFDAC, the National Health Insurance Scheme(NHIS) and others that guide specific health institutions. But the background laws that should guide some norms in the health industry are not there. As at today, there are some things that are unethical and which, if they are done, you can’t really punish anybody for it because it has not been so set out. For instance, we need to regulate the usage of human tissues and we also need to have a law on how the healthy industry should be organized and the various hospitals should inter-relate with each other and also how various tiers of government can inter-relate with one another. There must be a lot of collaboration and a sure foundation. Somebody can just abuse the removal of tissues from a living person because there is no law. There was a report of a so called medical doctor who allegedly removed the two kidneys of an individual. This is an obvious case of an unethical practice but you won’t be able to prosecute him under any law because we don’t have that foundation. So, we hope that we would be able to quickly get this through.

    Also, in the law, we are providing for a guaranteed financing of the Primary Health sector through a Primary Healthcare Development Fund. We are aware that healthcare delivery in the country is facing the challenge of funding. We know that primary healthcare is more important because it takes care of at least 80 percent of the health burden of this nation. Once financing at that level is guaranteed, we would be moving faster in our development of the health sector. Through it, we will be able to address the issue of under-five mortality rate, maternal mortality rate and the general welfare of our women and children. And obviously we are not doing well at the moment.

    What is the state of the Tobacco Control Act?

    We have represented the Tobacco Control Act because we know the dangers of tobacco, especially, to our growing children. There is a version of it that was passed last year but we tended to have strengthened it through some addition to ensure that government doesn’t directly or indirectly through its actions help to encourage tobacco growth and usage in the country. It has passed through First Reading. It is our hope that both the Tobacco and Health Insurance Bills will be taken in the early part of this year. So these are the things we are doing in the healthy sector. We have also been meeting with the various teaching institutions to find out what their challenges are and they are, largely, funding issues and it is a major problem. We are trying to look at ways and means to ensure we have the best out of the bad situation because health is not properly funded in the country at the moment.

    It is now a fad for Nigerians to seek medical help abroad for the least ailment…

    It is unfortunate. It is a process that is now being abused because every person, for even the least ailment, wants to go to India. There is no doubt that we have some limitations within our healthcare system. But I still do know that we have some specialists who are well equipped to manage a lot of ailment and there are hospitals with enough equipment to attend to the need of our people. But the trend now is that people with fractured bone, instead of accessing our orthopedic institutions where there are consultants orthopedic surgeons would prefer to be flown to India. The implication is not just capital flight but a loss of confidence in the health industry and I think this is getting worse to a level that is obviously unacceptable.

     

  • North’s position over PIB, threat to national unity —Izoukumor

    North’s position over PIB, threat to national unity —Izoukumor

    Niger Delta activist and leader of Ijaw (Izon-Ebe) Oil Producing Communities and spokesperson (Fiyowei) of Ogbe-Ijoh Kingdom in Warri South West Local Government Area of Delta State, Chief Favour Izoukumor, in this interview with Shola O’neil, spoke on a number of burning issues, including the contentious Petroleum Industry Bill, submitting that the position of the north over this bill is a threat to national unity. Excerpts:

    What is your view on the Petroleum Industry Bill?

    First, let me state that the process leading to the drafting of the bill (PIB) was not inclusive enough for us in the Niger Delta region. This is a bill that concerns us directly on the question of the oil produced from our back yards. We expected the Presidency and those involved in the process to carry us along from the time it was first mooted under the late President Musa Yar’Adua’s administration.

    On northern leaders’ and governor’s opposition, I have not been privileged to read the full content of the bill because there were so many versions in circulation and we do not know which is the right one. My reaction to the north’s opposition is that I do not blame them because they are playing the African politics where people protect the interest of their people at whatever cost. So, I see their opposition as a stance to protect the welfare and interest of their region.

    The Niger Delta politicians are our problem. They are not speaking out because they do not have the interest of their people at heart. Now, the north has taken a position that the bill will only favour the South-south and that it will make the people of the oil producing areas richer. It is now left for our leaders to make their position clear. The reason the north opposes PIB is because of our leaders. They see it as another avenue to enrich South-south state governors. Remember, in the past they have criticised our governors that they are not utilising the money as expected.

    So, I can understand their position because if I am in their shoes, I will never allow a policy that will empower individuals to the detriment of the nation. It is a dangerous step to the collective interest of the country.  It is expected that our governors will use the 13percent to develop the region. The money does not belong to them.

    To the best of my knowledge what is happening is a national risk because we cannot have individuals richer than the nation. It is a risk to have individuals richer than the collective. Money plays a big role in African politics and if these persons (governors) are allowed to continue to amass so much wealth, they will become very domineering for good or evil.

    So, while not justifying the north’s position, I support the call for direct payment of the money to the oil producing communities. If the money will not be paid directly to the oil producing communities, there is no need for more money for the governors because they are using the fund as they please without being accountable to the people. That is my position.

    What is the way forward?

    Having spoken on the shortcomings of our governors, let me state that the position of the north is a threat to national unity. Their position is a call for anarchy and threat to the survival of the nation. If not because of our politicians’ nonchalant attitude, our position has been for resource control, like what former Vice President Atiku Abubakar recently said that he expected all the regions to control their resources and pay tax. That has been our agitation until our political leaders betrayed us by accepting the stipend of 10% in the PIB.

    My advice to South-South leaders, politicians and others, is that we are in democracy and this is not military era – democracy is about lobbying and sound arguments. Let them lobby their colleagues and give them reasons why the south needs more money. If they are really developing the region as the money was meant for, then the position of the north would have been an insult to our people.

    Some people feel that paying 13% fund to oil communities will cause crisis

    Those holding that view are those in government and that is a typical African phenomenon. If they are privileged to be in government they use their influence to oppress the people they are governing.  Are these persons speaking the voice of the people they are supposed to be representing? I tell you they are not. They feel they govern themselves and not the people and this is because they are not genuinely elected by the people. If they were elected, they will respect the views of the electorate.

    What the oil producing communities want is very clear – we want a direct control of the 13% and whatever revenue is coming from crude oil production from our communities. I have a formula that will benefit everybody. The agitation is as a result of the failure of the governors of the South-South, who are enriching themselves with the fund. We no longer have confidence in the state governors. My suggestion is for the Federal Government to find a way, either through a trustee or commission, to set aside at least 30% for the non-oil communities because they also feel the brunt of oil exploration. Pollution does not discriminate between those producing and those not producing the oil. Everybody suffers, so everybody should benefit and develop.

    Is what you are suggesting different from the oil producing areas development commissions across the states – DESOPADEC in Delta, OSOPADEC in Ondo etc?

    Let me state that there is nowhere the 1999 Constitution stipulates that the fund should be paid to the coffers of the state governments – if there is, I have not seen it. I am not a lawyer, but I have read it so that nobody can intimidate me with it.

    Now to the issue of the state commissions, I want to state that they are also subject to the same political manipulations. If you have a PDP-led government as we have in most South-South states, then only PDP members will be appointed into the boards and they become a tool for political handouts. What this means is that if my community is not a PDP-leaning one, we may not get our dues for obvious reasons.

    We will consistently agitate until we are allowed to control our resources. Our youths – MEND and others – tried, but because their struggle is not ideological, they have not been able to stand the test of time. If their agitations had clear ideology, today the agitation would have continued – through  legal means. We intend to achieve our desire through agitation.

    Are you saying that the MEND uprising was a failure?

    No, that is not what I am saying. They did not fail; they made some gains but those are peripheral achievements or what I would call temporary gains/achievements. Even in the means of the leadership getting appointments, the group ought not to have died. Today, even some of the founders are saying that MEND has gone to the grave.

    The federal government needs to be sincere with its policies towards the development of this region – they should stop this divide and rule policies. They have to be sincere; we cannot expect the Niger Delta development master plans to become a sing song, year in year out. We want to see practical developments in terms of human resources, practical development, human development and all forms of development.

    If those things are not done, this carrot giving to agitators to quell the tension and all that will not help the nation.  They are just postponing the evil day.

    If you have a Niger Deltan as the President of the country, what else do you want?

    The president is an individual and nobody should expect that the individual (president) can singlehandedly develop the region. It is the institution, that is the FG, that can develop it. My reason is that we know what is happening in the country. What we want the FG to do is to take pragmatic approach and implement the various plans they have put in place. It is the obligation of the government, not president. Individual appointment does not attract development…

    If so, why do you agitate for a South-South  president?

    A South-South President (or President Jonathan) wasn’t part of the agitation of the Niger Delta people. We never expected that merely producing a president is the solution. We do not need to agitate, as Nigerians, to be president – that is our birthright constitutionally as Nigerians.

    Do you think the president has done well considering the myriad of problems and particularly the issue of corruption in the FG? Will you say after his tenure that a Niger Deltan made the difference or did better?

    To my view, I think he has done very well but people are collaborating to frustrate his efforts. If you judge the president based on what people are saying in the papers, you will feel that he is not performing as expected. I have a contrary view and not just because he is from this region. You cannot judge the president in isolation – you must consider the National Assembly and a lot of intrigues going on.

    Right from the day he was elected, there has been no peace especially from the northern parts of the country. How do you expect the president to be focussed when his people (Nigerians) are being killed on a daily basis? His attention is being distracted. How can a leader be focussed when you hear reports of deaths, bestial killings of the innocent in parts of the country you lead?

    But do you think the president is doing enough in terms of security?

    I think he is. Don’t forget that he is a purely civilian president…

    He is the C-I-C of the Armed Forces and people expected him to rise up to the security challenges in the country. We also have civilians as head of government in over half of the world’s nations.

    That is not what I am saying. As a civilian president, he is performing. The point I am trying to make is that Nigerians have military mentality because of the long years of military rule and we want quick results. The JTF and others are all over the place protecting lives and properties. Boko Haram did not start with President Jonathan. The difference is that during his time, it has assumed political dimension and has become an instrument for politicians who have lobbied and infiltrated them. In spite of all these, the president is trying. He needs our support.

    There was uproar recently when supporters of the president flooded the streets of Abuja with his campaign posters…

    ..(cuts in) Let me state it outright, those who pasted those posters are opponents of the president who merely want to use it to heat up the polity. And that is wrong. 2015 is  a long way away and the president has said so on a number of occasions.

    The brouhaha over 2015 is completely uncalled for at a time when the president is trying to fix the country. I see it as a ploy to distract Mr. President. Why not let’s wait till he has declared his intention.

    Let me also state here that it is very disheartening the way certain leaders, former presidents and others are taking these issues. I expected people of their calibre to be talking about the issue of the peace and unity of the country. Unfortunately, nobody is doing that at the moment. What they seem to be interested in is, which region will produce the president and all that. All the past leaders are holding meetings about how to produce the next president. Is the issue of the next president more important than the peace and unity of Nigeria? Where are the nationalists, everybody is now about region? I am surprised.