The Vice-President, Yemi Osinbajo, has warned that the Petroleum Industry Bill (PIB), when passed into law, will not cure all the ills afflicting the oil sector. Osinbajo, who spoke last Wednesday’s night in Abuja at the opening ceremony/dinner of the 10th annual business law conference organised by the section on Business Law of the Nigerian Bar Association (NBA), said there were more pressing problems in the oil and gas industry.
The vice president was responding to issues raised by the NBA’s President, Augustine Alegeh (SAN). Allegeh had in his welcome address delivered before the vice president’s speech, noted that the non-passage of the PIB by the National Assembly in the last 14 years, had stalled developments in the sector.
Responding, Osinbajo said some of the problems with the oil industry were not necessarily legislative issues but the nature and structure of the nation’s joint ventures as well as the fairness or otherwise of the agreements between the joint venture partners.
According to him, non-passage of the bill is only one of the many other pressing issues affecting the industry.
The vice president noted that there were some pressing issues in the oil industry which the PIB would not resolve.
He said: “What seems to be the problem for us today, really is more of how our joint ventures are structured, especially our cash core deficit and how to address those cash core deficit. “However you choose to write the PIB, it must still be the case that you must find a way of resolving questions around who pays for our own portion of the joint venture.
“Over time, we have some how found a way of not paying, so there is a huge backlog.
“But aside that, there is a question around Production Sharing Contracts and whether those PSCs should be framed the way they are. And these are not necessarily legislative issues. “They are more issues around agreements and how agreements are drawn up or and whether the agreements are fair or not fair.
“I think for us really, the major problems today revolve around the questions how the agreements we have entered into are wrong entered; how those joint ventures are wrong; how those PSCs are wrong and what we need to be doing moving forward.”
Osinbajo agreed that the PIB needed serious attention, but that the issues of how agreements could be made to be fair to partners in the joint venture was more important.
He said: ”There are so many questions. But frankly, the questions are not so much questions around the PIB and resolving PIB, I think the major issues are around how agreements look, how you want to structure the agreements and the fidelity to those agreements, to me, possibly more important and more pressing. But of course, the PIB, as we have said, is a very important legislation and we must pay attention to, especially because we need to resolve the fiscal issue.”
Alegeh, in his speech, called for a quick passage of the bill to improve the performance of the sector.
According to him, many other countries had copied the Nigerian draft PIB and had since passed it.
He said: “For the last 14 years, we have been battling to pass the PIB which if passed will enhance the fortune of this country. Let us tackle it frontally and deliver a law that will make Nigeria work.
“Other countries have come here and they have taken our draft PIB, they have passed it and the keep reforming it.
“There is a thinking that once we pass the PIB it will be stuck. I don’t believe that. PIB should be like any other law. It requires continuous amendment.
“By July, we will present our own understanding of what the PIB should look like.”
The Chief Justice of Nigeria, (CJN), Justice Mahmud Mohammed, who was represented by another Justice of Nigeria, Justice Sylvester Ngwuta, said legal reforms must be set in motion to address the nation’s problems.
He called on lawyers to act as agents of changes and be ready to fulfill their calling in helping the nation to confront many of its current challenges.
Chairman of the SBL, Mr. Asue Ighodalo, and Chairman of the 10th SBL Conference Planning Committee, Mr. Babatunde Ajibade (SAN), also called for right policies to bring the nation out of its current economic crisis.
The event which will come to an end today (Friday) has the theme: ‘Law reform and economic development’.