Deji Elumoye in Abuja
The non-passage of the Petroleum Industry Bill (PIB), which was sent to the National Assembly in 2007 as an executive bill by late President Umaru Yar’adua, has been identified as a major factor militating against required investments in the Nigerian oil and gas sector.
This was disclosed by the Minister of State for Petroleum Resources, Mr. Timpre Sylva, who attributed the stagnation of the nation’s oil reserves at between 37 and 37.5 billion barrels in the last 12 years to the non-passage of the bill.
Sylva disclosed this yesterday at a public hearing session that was organised by the Senate’s Joint Committee on Petroleum (Upstream), Finance, Gas and Judiciary on Deep Offshore and Inland Basing Sharing Contract (Amendment) Bill 2019.
He declared that while the oil reserves increased from 22 billion barrels in 1999 to 37billion barrels in 2007, only 500 million barrels were added to it between 2007 and 2019 due to lack of additional investments.
His words: “Perhaps as a result of some level of regulations, from 1999 to 2007, we grew our oil reserves from 22 billion barrels to 37 billion barrels, which however got stagnated between then and now ( 2019) with 37.5billion barrels , meaning that for 12 years , only 500million barrels were added to the reserves.
“If you compare it with the growth between 1999 and 2007 you will notice that the only difference is that there was a clear regulatory environment then but between 2007 and now, there has been quite unclear regulation because the law to govern the oil industry was not passed.”
The Minister of State, however, was delighted that the growing national consensus is demanding that the regulatory environment in the oil industry must be cleared.
“The National Assembly is on the same page with the executive and I hope that with this engagement with the industry, even the industry will be on the same page with the National Assembly and the executive. As we come together, we will have a law that will be to the overall interest of all of us as a country and industry players,” Sylva said.
He, however, commended the Senate for setting machinery in motion to revisit the passage of PIB very soon. “The public hearing being held today on Deep Offshore and Inland Basin Production Sharing Contract ( Amendment ) Bill 2019 by the relevant senate committees, will no doubt serve as precursor for consideration and passage of PIB in no distant time,” he added.
Earlier in his opening remarks, Senate President, Senator Ahmad Lawan, reiterated the commitment of the Ninth National Assembly to pass the PIB next year.
Lawan stated that the bill, which appeared jinxed since 2007 when it was sent to the 6th National Assembly up to the 8th Assembly when it was passed but not assented to by the President, would see the light of the day during the current assembly.
“Collaborative approach between the executive and the legislature is being considered in getting the PIB passed and assented to this time around because the bill is highly needed to attract investors into the sector and widen our oil reserve base,” he said.
He added that the Deep Offshore and Inland Basin Bill would also be passed as a required precursor for the PIB.
On his part, Chairman of the Senate Committee on Petroleum (Upstream), Senator Albert Akpan, noted that the need to put in place required legislations on Production Sharing Contracts ( PSC) necessitated the motion that gave birth to the bill for a win – win arrangement for all stakeholders.
The Senate on Wednesday, uncovered a whooping loss of N7trillion ( $21billion) to international oil firms within the last 26 years over non implementation of Oil Production Sharing Contract (OPSC), since January 1993. The loss suffered by the country in the management of the OPSC with frontline oil firms like Chevron, Exxon Mobil, Shell , South Atlantic Petroleum etc, came to the fore during the debate on a motion sponsored by Senator Ifeanyi Ubah and 27 other Senators.
Uba informed the Senate that the non-adherence to the salient provisions of the OPSC by the affected oil firms have denied Nigeria the sum of $21billion, an equivalent of N7 trillion.
The N7 trillion loss, according to him, were revenues that would have accrued into the federation account from the share Nigeria was supposed to have received from the oil firms anytime oil price rises above $20 per barrel as provided for in section 16 of the OPSC.
He added that the required periodic reviews that are supposed to be done on the Act in 2008, 2013 and 2018 as provided for in the Act , were not carried out with attendant further loses on the part of Nigerian government.
Consequently, an amendment bill seeking for penalties against the fraud was tabled and passed for first reading at Senate plenary last Thursday.
The Senate introduced sections 17 and 18 into bill for appropriate penalties against violation of section 16 of the Act when the bill titled “Deep Offshore and Inland Basin Production Sharing Contract (Amendment) Bill 2019,” during the second reading of the bill yesterday.