Peter Uzoho
Some players in the Nigerian oil and gas industry and public policy commentators have expressed concern over the latest comment by the Senate President, Ahmed Lawan, that the protracted Petroleum Industry Bill (PIB) may have to be drafted from the scratch and a new version presented to the National Assembly for fresh consideration and passage.
Some of the operators and analysts were the Chairman of Entek Integrated Resources Limited/Lead Promoter of EnergyhubTM, Dr. Amieyeofori Felix; Chairman of the Petroleum Technologists Association of Nigeria (PETAN), Mr. Bank-Anthony Okoroafor; and the Director General of the Lagos Chamber of Commerce and Industry (LCCI), Dr. Muda Yusuf, in their separate interviews with THISDAY, said such could lead to further delay in the proposed legislation.
According to them, drafting the all-important bill from the scratch and presenting a new version to the National Assembly was unnecessary, arguing that it would lead to further delay and loss of opportunities and investments for the nation.
Lawan, had last Wednesday, during a meeting with a delegation from the International Monetary Fund (IMF) in Abuja, said the National Assembly had commenced consultation with the executive arm of government on a new version of the PIB to be introduced in the Ninth National Assembly.
He had added that the interface between both arms would birth a new PIB to be drafted from the scratch, passed by the National Assembly and signed into law by the president before the end of the year.
But reacting to Lawan’s statement, Felix, said such would further delay the bill, adding that the bill might not be passed even by 2022, if opened up for fresh legislative process.
He pointed out that the delay in the bill had led to investors moving their investments away from Nigeria to other African countries that had more stable and predictive fiscal environment.
Felix said: “For me, as an industry player, I am sure if the Senate opens up that bill again, I don’t think it will finish this year. Don’t think they can cap it up and sign it by December 31. If they do that, bravo! But knowing Nigeria, that is another round of stakeholders’ engagement.
“So if you are delaying this, what does it mean? What do you want to achieve? How long? What is wrong with the existing one? How do we amend it? What do we do? People have to sit down and look at this and not just use a fiat.”
He added: “For the sake of the economy, for the sake of Nigeria, we have to ask ourselves, is that the best way to go? Are you sure if you open it up now you can close it by 2022? Can you do that?
“And we have to ask them, what is the implication of opening up the PIB again for another stakeholders’ engagement?
“What does it mean to everybody? what does it mean to your investment? What does it mean to your short-term, medium-term and long-term projection? What does it mean to your economy? I think that is the way Nigeria should start thinking going forward.”
On his part, Okoroafor, said: “We must strive to pass the PIB and get the presidential assent. The key is to have the PIB that gives competitive fiscal terms to attract investments and streamline all our fiscal terms to help the country raise revenue and also assure investors of fiscal certainty and win-win situation.”
Also reacting to the issue, Yusuf said Nigeria cannot afford any further delay in the presentation and passage of the PIB, noting that the absence of an appropriate legal framework had been a major undoing of the Nigerian economy.
According to him, “we have not been able to unlock huge investments, revenues and thousands of quality job opportunities for this reason. The PIB was first introduced to the floor of National Assembly in 2003, over 16 years ago.
“Since then, the bill has undergone several reviews and elicited diverse sentiments among stakeholders, making it one of the most contentious bills in recent memory.”
The LCCI DG explained that the importance of passing the PIB was underscored by the fact that the oil and gas industry was very strategic to the economy of Nigeria, and that the industry currently accounts for about 80 per cent of the government revenue and about 95 per cent of foreign exchange earnings.
He added: “Today, that revenue is facing a serious risk of shortfall from illegal bunkering, declining demand from buyers, stalled investments in the oil and gas sector and emerging technology in renewable energy.
“We are of the view that the government should not be oblivious of the rapidly evolving nature of the dynamics in the global oil and gas industry.
“We are concerned about the face of rapidly evolving competition in the global oil and gas market, and the increasing challenges such as insecurity and uncertain investment climate.
“The policy uncertainty around the oil and gas sector continues to undermine the confidence of investors in the sector. It is of interest to note that several oil producing and service companies have left the country on account of these challenges.”
Yusuf, pointed out that recent feedback from operators in the oil and gas industry showed a number of concerns, among which, according to him, were that the “Niger Delta region remains a dangerous place to operate for oil companies and this add to operating cost.
“Special security arrangements such as provision of convoys, security support and flight operations currently add around 12 per cent to Joint Venture (JV) costs; government finds it difficult to meet its own share of Joint Venture (JV) funding obligations.
“This seriously undermines growth in the onshore and shallow water – especially in the country’s gas sector; and it takes an unduly long time to secure approvals for contracts compared to other oil producing countries.
“The above concerns highlight the need for a clear understanding of the contentious issues surrounding previous version of the bill and build stakeholders’ consensus. The PIB is very critical for Nigeria and we cannot afford to get it wrong or delay its passage/approval any further.”
