[BusinessDay] The long awaited draft of the Petroleum Industry Bill (PIB) is on its’ way to President Goodluck Jonathan, Business Day can confirm.
The draft is the end product of work done by several committees and task forces set up by Petroleum Minister, Diezani Alison – Madueke and the work is one of the outcomes of the nationwide clamour that greeted the cut in petroleum subsidy by the federal government.
Already, a number of senior government officials, including three ministers, have been taken through the draft, as part of the process of consultation.
Business Day learnt that apart from the petroleum minister, others who have had the draft exposed to them, are Ngozi Okonjo-Iweala, co-ordinating minister of the economy and minister of finance, and Mohammed Adoke, minister of justice and attorney- general of the federation.
A senior government official told our reporter last night, “I can confirm to you that the draft bill is ready. The teams have done their work and now the draft is on its way to the president and should be on his desk by today or tomorrow.”
It is believed that the Federal Executive Council (FEC) may also wish to have a say on the draft, before it is then sent by the president to the national assembly.
Those familiar with the process say the consultations will help ensure that the executive speaks with one voice on the bill, to avoid the chaos that characterised the earlier attempt to pass it.
Government official dismissed recent reports suggesting a watering down of provisions of the draft, dealing with enthroning more transparency in the industry, and linked the report to a London based consultant who had his hopes of working with the finance ministry on the bill dashed.
Prior to exposing the draft bill to senior government officials, the technical committee charged with the job, had held a series of consultations with various stakeholder groups including labour, the international oil companies (IOCs) and their indigenous counterparts, with the aim of ensuring a broad industry buy in.
It is unclear whether the recent top management personnel changes at NNPC are linked to the impending process of seeking the passage of the PIB, although one official said government was keen to position the NNPC for the new era under a PIB governed oil industry.
Experts and technocrats have expressed worry about the declining fortunes of the Nigerian petroleum industry because of the non passage of the PIB.
The non passage of the bill has also stalled further development of the Nigerian Liquefied Natural Gas (NLNG) Train 7 and the Brass LNG, which has not been able to take off because of lack of clarity on the fiscal regime that is to govern the project.
The PIB is a landmark opportunity to herald a new era of reform in the oil and gas industry that will maximise Nigeria’s vast potential, restore transparency and facilitate a thriving industry and overall economy. Failure to pass the PIB has and will lead to a reduction of investments in the Nigeria petroleum industry.
To date, most of the oil companies have ceased to invest in the sector, waiting for clarity as to what provisions would be contained in the final Bill and how it would affect the industry.
With the rise of other attractive petroleum industries in Africa (Angola, Ghana, etc), Nigeria must understand that investments are fungible and will eventually flow to alternative countries that are more receptive, industry analysts adding that, the recent 2012 efforts to deregulate the downstream sector creates an opportunity for lawmakers and other stakeholders to push for the swift passage of this Bill Nigeria’s neighbours like Ghana, Liberia, Sierra Leone and Cameroon had discovered oil , and this should be a source of concern to Nigeria, considering the possible drift of investment to these countries.
The level of certainty in these countries is higher than in Nigeria because the PIB has not been passed, industry experts say.
The PIB is an attempt to bring under one law, the various legislative, regulatory, and fiscal policies, instruments and institutions that govern the Nigerian petroleum industry. The Bill is expected to establish and clarify the rules, procedures and institutions that will entrench good governance, transparency and accountability in the oil and gas sector.
It aims to introduce new operational and fiscal terms for revenue management, to enable the Nigerian government retain a higher proportion of the revenues derived from operations in the petroleum industry.
In response to various challenges facing the oil and gas industry, the Obasanjo government in 2000 constituted the first Oil and Gas Reform Implementation Committee (OGIC) to recommend a policy for reforming the sector. The recommendations defined the need to separate the commercial institutions in the sector, from the regulatory and policy making institutions.
In 2007, the Yar’Adua government reconstituted OGIC under the chairmanship of Rilwan Lukman, to use the provisions of the National Oil and Gas Policy to setup legal, regulatory, and institutional structures for managing the oil and gas sector.
The Lukman Report, submitted in 2008, recommended regulatory and institutional frameworks that when implemented would guarantee greater transparency and accountability.
This report formed the basis for the first Petroleum Industry Bill (HB 159) that was submitted in 2008 as an Executive Bill.
The controversy raised by the Bill prompted the constitution of a federal inter‐agency team, headed by Tim Okon (former NNPC Group General Manager on Strategy) to review the Bill.
The team’s report, submitted in 2010 is at the crux of the controversies around the PIB, because it introduced more stringent fiscal provisions which guarantee a higher share of oil revenues to Nigeria. In 2011, the Senate submitted its version of the Bill (SB 236) that is seen as a much‐weakened version.
Subsequently, the House of Representatives submitted its version of the Bill (HB. 54) in 2011. The Bill was sponsored by six honourable members.