20 February 2013

Nigeria: Alison-Madueke - PIB Will Curtail FG, Minister's Powers

Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, Tuesday led a delegation of stakeholders in the oil industry to the Senate for a technical briefing on the Petroleum Industry Bill (PIB) where she disclosed that the bill has drastically curtailed the powers of both the Federal Government and the minister overseeing the oil sector.

Alison-Madueke also said in line with the drive of the bill to deregulate the oil industry, the Nigerian National Petroleum Corporation (NNPC) would be unbundled into a world-class National Oil Company (NOC) patterned after globally recognised models like Petrobras in Brazil and Petronas in Malaysia.

Also Tuesday, President Goodluck Jonathan appealed to the international community to help Nigeria in fighting the menace of crude oil theft, which has cost the nation billions of dollars in revenue loss.

Alison-Madueke, during the technical briefing to the Senate, which was aimed at facilitating the quick passage of the PIB, dismissed insinuations that the bill grants excess powers to the petroleum minister.

According to her, the current Petroleum Act accords excess powers to the minister.

"You can check the law; there is no legislation that gives the petroleum minister as much powers like the current Petroleum Act. The current Petroleum Act gives the current petroleum minister, which happens to be myself, more powers than any other bill can possibly give. In drafting the PIB, in which I was personally involved, we ensured that control was actually divested away from the minister and the Federal Government. If you take an entity like the NNPC and unbundle it, that takes away a large portion of the minister's power.

"As minister, I represent the president's delegated powers. There is no time that the president of this country has allowed that much control over our national oil and gas sector to be divested. I think we should actually congratulate the president," she told reporters after the briefing of the senators.

Alison-Madueke explained that a section of the PIB, which grants 10 per cent equity advantage to oil-producing communities from the net profit of oil companies operating in the areas, is not new, as it has been captured in previous bills which did not become law.

Part G, Sections 116-118 in the PIB provide for the establishment of a special fund to be known as the 'Petroleum Host Communities Fund' which shall be utilised for the development of the economic and social infrastructure of the communities within the petroleum producing area.

The section has faced stiff opposition from some interests from the North, which have insisted that the draft legislation seeks to empower only the oil-producing states.

During the briefing, Deputy Senate President Ike Ekweremadu said the Senate would pass the PIB this year if the petroleum ministry co-operates with relevant Senate committees handling it to ensure a new legal regime for Nigeria's oil sector.

How to make Nigeria derive maximum benefits from the oil sector also dominated the address of the president at the ongoing Nigerian Oil and Gas Conference in Abuja.

Jonathan, represented by Alison-Madueke, urged other countries to assist Nigeria in tackling crude oil theft, which has become a major threat to the growth of the nation's economy.

He said the Federal Government was more than ever determined to fight increasing theft of Nigeria's crude through illegal oil bunkering and could not do it alone with international support.

As much as 180,000 barrels of oil per day are lost to oil theft, according to recent estimates by the NNPC.

According to him, the collaboration with the international community became imperative given that Nigeria's bunkered oil are "neither sold in West Africa nor the financial outputs laundered in West African banks, but (they) end up in far flung international fiscal institutions".

He said he had tabled the matter at a recent meeting with British Prime Minister David Cameron and he had pledged Britain's readiness to assist Nigeria to deal with the issue.

Besides Cameron, the president has already started contacting his colleagues from other countries that could assist Nigeria in fighting the oil thieves.

"We are championing the crude oil fingerprint to detect crude oil theft as purchased by other nations and the support of the global community is also being sought. I cannot mention the states because the issue of vandalism and bunkering are major security issues and the security services will be working in these issues hand in hand with us.

"They have already pledged to assist us fully in dealing with this and as the structures are put in place, they will begin to come on board. They are very ardent at joining us to actually rid ourselves of this particular scourge, but I cannot begin to list the countries right now," Jonathan said.

He told the gathering of major stakeholders in the oil sector that the problem of pipeline vandalism was being addressed at the top, adding that the measures put in place by service chiefs have started paying off, resulting in reduction in such incidence in recent times.

On the achievement of the sector, the president said the oil and gas sector in the last 12 months had maintained an oil production of 2.4 million barrels per day and increased gas production from 6.3 to 7.8mscfpd, while gas flaring had reduced to less than 11 per cent compared to 20 per cent in 2010.

According to him, through the various gas utilisation programmes and other measures that are being put in place, gas flares would be reduced to two per cent by 2017.

"Our plan is to continue throughout this year to further increase power generation by additional 40 per cent to at least 6 gig watts with the addition of another 450mscuf/pd of gas supplied to power generation," he added.

On the status of the refineries, he said capacity utilisation in the nation's four refineries had improved to about 68 per cent.

Providing details on the rehabilitation of the refineries, he said commercial and technical bids had been received from the original builders of the refineries while consultants for the Port Harcourt Refinery have finally mobilised to site for early turnaround maintenance (TAM) work.

The TAM and rehabilitation work on Kaduna and Warri refineries are intended to follow in the fourth quarter of the year and the first quarter of next year respectively.

In his speech, NNPC Group Managing Director, Mr. Andrew Yakubu, said the current development in the gas market in Europe was affecting the Trans Saharan gas pipeline project.

He, however, expressed concern about pipeline vandalism, disclosing that the corporation, as at last year, had witnessed over 5,000 incidents of line breaks, which adversely affected the integrity of the pipelines.

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