The country needs the petroleum industry act for better management of the oil and gas sector of the economy
Even with all the anticipated positive impact of the Petroleum Industry Bill (PIB) on the oil and gas sector of the economy, it has remained mired in inexplicable stalemate, unable to find its way back to the legislature from the executive to which it was returned in 2014. In contrast, Ghana last week passed the Petroleum Production and Exploration Bill into law to replace the Petroleum (Exploration and Production) Act, 1984, an indication of the seriousness the country attaches to it.
First introduced in December, 2008 by the late President Musa Umaru Yar’Adua to the sixth National Assembly, the PIB aims to re-position the oil and gas industry for greater efficiency, openness and competition. Designed to strengthen the capacity of indigenous Nigerian companies so they can compete with international oil companies in the search for, and acquisition of, hydrocarbons, the legislation also proposes to reduce exploitation in the sector and limit, to the barest minimum, government exposure to oil and gas production through joint venture operations.
However, the bill has never been well received by the IOCs operating in Nigeria most of whose officials fear that some provisions therein may be inimical to their investment interests. There were other contentious issues of environmental concerns and community rights that stakeholders have also bickered over, necessitating a review and its withdrawal in 2011. The dusts of controversy had not settled when President Goodluck Jonathan reintroduced the bill in 2012 and several attempts to revise it in order to arrive at a consensus led to its proliferation. With many versions of the proposed legislation in circulation, the seventh National Assembly stood it down in 2014 and requested the executive to produce a fresh bill for its consideration.
Hopes that the advent of a new government would bring a sense of urgency to the review, presentation and passage of the all important piece of legislation would appear to be evaporating. More than a year after ascending power, the Buhari administration does not seem to have a grip on the way forward, forcing the Speaker of the House of Representatives, Hon. Yakubu Dogara, to lash out at the executive recently, saying that the legislature would no longer wait for the presidency to send it a fresh version of the bill for deliberation and passage.
According to Dogara, the National Assembly would go ahead to consider and pass the existing version of the bill in its possession. “I have at least three different occasions publicly requested the executive to as a matter of urgency send an executive bill on its intended reforms in the petroleum sector. We had hoped to avoid the situation in the past two assemblies (sixth and seventh) where the PIB was sent to the National Assembly very late thereby guaranteeing failure to pass the bill,” he said.
While the executive deterred, the uncertainties created by the stalemate has confused investors and weakened their confidence, leading to massive divestment in the sector. This situation could only worsen with the restiveness in the Niger Delta region, where militants are up in arms against several years of environmental degradation and chronic underdevelopment. Yet investors now have alternative destinations in new emerging sub-Sahara oil states of Ghana, Angola, Sao-Tome and Principe.
For this reason, we could not agree less with Dogara and support his proposition, which appears to be in tandem with the position of the President of the Senate, Dr. Bukola Saraki, who had proposed that the bill be broken down into sectors to make it more manageable for consideration and passage. Vice President Yemi Osinbajo has also been similarly inclined in recent pronouncements. If the executive persists in delaying the bill, the legislature should proceed with what it has.