Nigeria needs to pass the Petroleum Industry Bill (PIB) as soon as possible to ensure the country gets the maximum benefits from its petroleum resources before they dry up, Deputy President of the Senate, Ovie Omo-Agege, has said.
Crude oil, which contributes almost 80 per cent to Nigeria’s gross domestic products (GDP), is projected by experts to dry up in the next 30 to 40 years.
With technological breakthroughs facilitating the discoveries of cheaper and more reliable alternatives to crude oil, Mr Omo-Agege said the Nigerian government should swiftly move to clear the issues making it difficult for it to explore, produce and sell its crude oil while the market is still there.
“Nigeria must make the best use of its crude oil resources now that the market is still there because the world will turn away from fossil fuel in a few years’ time, as global demand for crude oil will soon dry up, making the resources less valuable,” he said.
The deputy Senate President was speaking on Tuesday in Owerri at a host communities’ colloquium on the Petroleum Industry Bill (PIB) organised by OrderPaper Advocacy Initiative, in collaboration with the Facility for Oil Sector Transformation (FOSTER).
Why petroleum industry growth is stalled
He said the absence of a petroleum industry law is hindering the effective development of the country’s petroleum industry.
The PIB has not been passed into law since it was first proposed to the National Assembly 20 years ago.
The PIB is expected to provide the legal, governance, regulatory and fiscal framework for the industry in Nigeria, in line with global standards.
Although the present administration says it wants the Bill passed into law as soon as possible, Nigerians are sceptical due to the pace of the process at the National Assembly.
But, last week the Minister of State for Petroleum Resources, Timipreye Sylva, said the bill may be passed into law by March next year.
The Speaker of the House of Representatives, Femi Gbajabiamila, also said the lawmakers want to pass the bill within the next six months.
He spoke while hosting a delegation of the Oil Producers Trade Section (OPTS) of the Lagos State Chamber of Commerce and industry on Tuesday.
Opportunity for growth
For Mr Omo-Agege, the PIB currently being considered by the National Assembly offers a rare opportunity for a law that promotes the development of the petroleum sector and impacts on the economy, particularly on the development of host oil communities.
Mr Omo-Agege, who was represented at the event by his Chief of Staff, Otive Igbuzor, urged Nigerians to support the effort to pass the PIB.
He said the Bill was designed to provide the sector with laws to unlock its full potentials.
“The good news is that the proposed Petroleum Industry Bill (2020) is coming to change all the problems and challenges that held down the development of the petroleum industry,” he said.
He said when the PIB is passed, he would want to see the Nigerian National Petroleum Corporation (NNPC) being run as a business enterprise by the name NNPC Limited as its counterparts like Saudi Aramco in Saudi Arabia; PetróleoBrasileiro S.A. (Petrobras) in Brazil; Equinor in Norway, and Petronas in Malaysia.
He said the PIB would establish regulatory agencies to monitor compliance to global standards in the operations of the industry.
“In our recent history, we have seen perhaps avoidable restiveness from these host communities, bordering on perceived inadequate care or concern for the survival, and well-being of the peoples.
“I want to say that whatever administrative shortfalls that may have informed these acts of resistance, would not have been there if appropriate interface between the operating companies and the host communities was the order,” he said.
Mr Omo-Agege said the PIB should consider providing for a dual regulatory system. These are the Upstream Regulatory Commission, to take care of the upstream sector where most encounters with host communities occur, and the Midstream and Downstream Regulatory Authority.
While the Bill proposes that the host community trust fund should be funded by 2.5 per cent of the actual operating expenses (OPEX), Mr Omo-Agege advocated for an increment to 5 per cent.
PIB a priority
The Deputy Chairman, House Committee on Niger Delta, Henry Nwawuba, who was the chairman of the panel of discussants at the event, said the PIB was a priority on the legislative agenda of the National Assembly.
Mr Nwawuba said the House of Representatives would complete work on the Bill by the first quarter of next year.
In his introductory remarks, the Executive Director of OrderPaper Advocacy Initiative, Oke Epia, urged host communities to scrutinise the provisions of the PIB and come up with their own positions.
Mr Epia said the provisions the PIB was a composition of what Abuja thinks the region deserves in exchange for the takeover of its resource ownership, adding that the Bill ignores the ownership question and outsource government’s responsibility for robust redress of the debilitating consequences of extraction to corporate entities.
“While the PIB may not be tailored to address the decades-long resource ownership question, it nonetheless presents an opportunity to make incremental gains in the agitation for a better Niger Delta region” Mr Epia said.