By Comrade Hyginus Chika Onuegbu –
We commend the 8th Senate led by Senate President Senator Bukola Saraki and its Joint Committee on the Petroleum Industry Governance Bill (PIGB) led by Senator Tayo Alasoadura for the passage of the Petroleum industry Governance Bill (PIGB) 2016.
This is indeed a milestone achievement especially when you consider that the PIGB is not an Executive Bill. Also, when you consider that Nigeria has lost over 235Billion dollars due to its inability to pass the Petroleum Industry Bill into law since the reform in the Nigerian Petroleum industry was kick-started 17 years ago.
We therefore look forward to the concurrent passage of the Petroleum Industry Governance Bill (PIGB) into law by the Federal House of Representatives and also eventual accent by the President of Nigeria.
We however note that the PIGB only deals with the one aspect of the PIB, that is the governance and institutional framework of the Nigerian Petroleum industry, We therefore look forward to the passage of the other aspect of the Petroleum Industry Bill(PIB) namely such as the : The Petroleum Fiscal Framework Bill; The Petroleum Industry Downstream Administration Bill; The Petroleum Industry Revenue Management Framework Bill and the Petroleum Host Community Bill.
The passage of the PIGB whilst commendable will not deliver the full benefits of the intended reforms except if the other aspects of the PIB are also legislated.
For instance, we know that there is no mention of the Petroleum Host Community Fund in the PIGB and we know that one of the major challenges facing the industry is host community and Niger Delta issues. Until recently , following the truce of the Acting President when he visited the Niger Delta this year, the Militant Attacks in the Niger Delta led to significant amounts of shut-in production at onshore and shallow offshore fields & frequent declaration of force majeure by oil and gas companies in Nigeria.
You will recall for instance that Nigeria’s 2016 budget was based on Crude oil export of 2.2mln bpd with MTEF projections of 2.347mln and 2.469mln bpd for 2017 and 2018 respectively. Unfortunately, due to the Militancy in the Niger Delta, Nigeria’s crude oil export in 2016 only averaged some 1.5mln bpd creating a deficit of some 700,000 bpd in export, thereby worsening her economic crises and pushing the country deeper into recession, exchange rate crises, and stagflation.
Therefore, it is important that any legislation to address the challenges in the Nigerian oil and gas industry must make provisions on how to effectively address the Petroleum Host community issues.
Also the Fiscal regimes aspect of the PIB is not included in the PIGB. It is this aspect that will guides the final decision of the International investors on how much to invest as it has direct impact on the profitability or other wise of the investments in the Nigerian oil and gas sector vis –a-vis other Petroleum host countries.
Having said that, we must commend the 8th Senate for this feat while looking forward to the passage of the other aspect of the PIB and the concurrent passage by the House of Representatives and accent by the President of Nigeria.
*Comrade Onuegbu is Chairman, NUPENG and PENGASSAN Petroleum Industry Bill Committee
