31 January 2012

Nigeria: Why the Pib Must Be Passed Now

Hope that the controversial Petroleum Industry Bill (PIB) will become law soon was rekindled on January 19, when the Petroleum Minister, Mrs. Diezani Alison-Madueke, inaugurated a special task force to review the various versions of the bill submitted to the sixth National Assembly and produce a new one within 30 days for presentation to the National Assembly. Chika Amanze-Nwachuku writes that the task force can only meet this target, if those very fundamental issues raised by stakeholders were amicably resolved within the stipulated time

In a nationwide broadcast on January 16, President Goodluck Jonathan had pledged to give the PIB accelerated attention. The President had promised to re-present the bill to the National Assembly in the first quarter of 2012 and expressed optimism that, when re-introduced to the floors of the National Assembly, the PIB would be given speedy passage.

The existence of different versions of the bill was said to be the major reason why it could not be passed by the sixth National Assembly. Confirming the multiplicity of the PIB versions, Senate President David Mark had during the inauguration of the Senate Committee on Petroleum (Downstream) said the existence of different versions of the controversial oil industry reforms bill had been the major stumbling block to its passage by the two arms of the National Assembly.

The bill, which had generated a lot of interests among Nigerians, did not go beyond the first stage of clause-by-clause consideration in the two chambers before the Sixth Assembly wound up in June this year.

According to Mark "The problem with the PIB was that when it showed up, there were so many versions". He noted that "as many as three or four versions of the bill were in the hands of senators and members of the House of Representatives."

But President Jonathan had argued that since the sixth assembly could not pass the bill owing to contentious issues raised by stakeholders, the right thing was for it to be re-presented to the seventh assembly.

He said: "But now we have the seventh assembly and we will start the process because the PIB is a bill that there were too many interested parties and confusions and we decided to go back and amend these controversial issues so that if it comes back this time around it will move faster.

"The interest of Nigeria is paramount in the bill, we are looking at those areas of disagreements and I believe in the first quarter of next year, we will present the bill again to the assembly, and I am optimistic that it will sail through. Yes, they are right to say that they do not have the PIB in their custody."

Gains of PIB passage

The PIB is a piece legislation that impacts directly on the policies of the Petroleum Industry and the lives of Nigerians as a whole. In Simple terms, the bill aims to bring about sweeping reforms that would place Nigeria's oil and gas industry at par with other civilised oil-producing nations of the world.

When passed into law, the PIB would correct anomalies in the petroleum sector and re-write Nigeria's over five decades relationship with International Oil Companies (IOCs) operating in the country.

It will ensure that oil block licences, leases and contracts as well as changes to documents relating to such deals will no longer be confidential, as payments to the government would be made public.

It will ensure that all petroleum geological, geophysical, technical and well data are accessible for all interested persons in a national data base. Besides, the proposed bill would result in a significant increase in transparency and ensure that petroleum prospecting licences and petroleum mining leases can only be granted by the Minister through a truly competitive bid process; and such process that would be open and accessible to all qualified companies.

The PIB will give investors the confidence to put their money on oil and gas projects that can be done in Nigeria by Nigerians. In that way, jobs would be created for teaming Nigerians that are unemployed.

Therefore, the continued delay in its passage, portends greater danger to the sector and Nigerian economy as no new project are coming on stream, Final Investment Decisions on various oil and gas projects have suffered series of setbacks, while billions of dollars projects are being threatened.

An oil company chieftain stated recently that the delay had stalled investments in the sector because potential investors were skeptical about the fate of the bill.

Setting up of PIB task force

To fast track the passage of the bill, the petroleum minister, about a forth night ago, inaugurated a special Task Force, with a mandate to review the various versions of the bill submitted to the National Assembly and produce a new one within the next 30 days.

The task force headed by Chairman of the board of Nigeria Securities and Exchange Commission (NSEC), Senator Udoma Udo Udoma, with Senators Tunde Ogbeha and Lawan Shuaibu, Hon Chibudom Nwuche, Hon. Abdullahi Gumel, Hon. Habeeb Fashinro, President of Trade Union Congress, Mr. Peter Esele as members and Legal Adviser in the Petroleum Ministry as Secretary would work in collaboration with a technical sub-committee headed by the Director General of Department for Petroleum Resources (DPR), Mr. Osten Olurunsola, to produce a clean copy of the bill to be presented to the national assembly and to facilitate its quick passage into law.

"As a matter of fact, you are all also aware that at the end of the 6th Assembly there was more than one version going around. So, government expects that the committee will put up all the indices in place to redefine the bill, look at certain sections and include strategic aspects so that we can get it right," the Minister told the taskforce at the inauguration ceremony.

Alison-Madueke also stated the need for Nigeria to accelerate all necessary transformation agenda in the oil and gas industry starting with a swift passage of the PIB into law.

"I think we can all see the need for transformation and change, it's obvious we are beginning a new phase of transformation in our petroleum industry as we turn a new page. We have listened to the voices of Nigerians over the last few weeks as they spoke in unison asking for accelerated reforms in Nigeria's oil and gas industry.

And these are reforms we had already began to put in place over the last few months and we want to anchor them very critically on the PIB which as we all know is the most critical piece of legislation to have come out of the oil and gas industry in the last 50 years or so," she said.

The terms of reference of the special PIB taskforce, according to minister; will include amongst others; working with the technical committee and the office of the petroleum minister, Attorney General of the Federation (AGF) and minister of justice to produce a new copy of the bill for presentation to the National Assembly within the shortest possible time.

She reminded the taskforce of the need for accountability to Nigerians in their new task. "I think it goes without saying that as eminent citizens with great knowledge and wide experience, the entire country and ourselves are all expecting that you use your wisdom gained over many years of professionalism and services and of course your good offices to ensure that all perspectives are brought to bear in the making of this historic piece of legislation with great potential for the transformation of our industry and the nation."

Stakeholders' Stance on the Taskforce

Reactions have continued to trail the setting up of the PIB taskforce, with some industry watchers dismissing it as one of such taskforces, whose recommendations were never implemented by government.

Some of the stakeholders spoken to, posited that the task force could only do a thorough job, if those very fundamental issues raised in those versions submitted to the sixth Assembly were amicably resolved. They include: the issue of fiscal regime, especially for gas, which was said to be unresolved; the issue of commercialisation of the NNPC, which has reportedly not been fully addressed e g; how funds would be raised and revenue disbursed.

These, sources said, were some of the lingering issues that need to be ironed out for the Udoma-led task force to produce a clean copy of the bill.

Continued delay, stakeholders said, portended grave consequences for Nigeria and her economy, as according to them, the industry had already lost, in excess of $28 billion in investments, because billions of dollars of potential investments had since been put on hold.

Little wonder then that anxious stakeholders have urged the task force to do everything possible to ensure that the bill is signed into law within the first quarter of this year. They warned that the lull in the sector could lead to job losses because many multinationals had stopped work on many projects pending the passage of the bill.

Interestingly, Udoma has pledged the resolve of the taskforce to commit to hard work in accelerating the passage of the bill.

He said: "It is quite a task that can be achieved and we will put in all our efforts, we will work hard and tirelessly because this is important for the nation".

He continued: "Our work is simply to focus attention on the need to move expeditiously to make sure that the bill is passed for the betterment of our people."

Industry watchers say, if these promises are anything to go by, then Nigerians and indeed the investment community should be hopeful that the long delayed bill would become law soon.

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