President of the Senate, Dr. Ahmad Lawan, on Monday warned against further delay in the passage of the Petroleum Industry Bill (PIB) as it will result in more colossal losses to the Nigerian economy.
Lawan, in his remarks at a two-day public hearing on PIB organised by the Senate Joint Committee on Petroleum Sector (Downstream), Petroleum Resources (Upstream) and Gas, committed the National Assembly to pass the bill by April so that by May it would have become law after President Muhammadu Buhari’s assent.
However, at the hearing, critical stakeholders in the nation’s oil and gas sector, including oil producers and host communities, kicked against certain provisions of the bill, which they called on the National Assembly to revisit before passage.
Lawan, while declaring the public hearing open, assured the stakeholders of the speedy passage of the PIB this year.
According to him, “The National Assembly will pass the bill by April and I’m sure it will get presidential assent by May, this year.”
He thanked the stakeholders for their contributions in shaping the bill and assured them that the National Assembly has been working assiduously in conjunction with critical stakeholders to pass it this year.
Lawan said: ”The Ninth Senate in its wisdom, made the passage of the bill a priority in its legislative agenda and has since in conjunction with critical stakeholders been working assiduously to get the bill passed this year.
”Arguably, Nigeria’s oil and gas industry has experienced several shocks and challenges over a long period as a result of outdated laws. These challenges include those dictated by global practices, the persistent calls for the deregulation of the downstream sector, the agitation of the oil-producing communities and the unbundling of the NNPC, all these, underscore the need for urgent legislative reform.”
Communities, IOCs Oppose Bill
Stakeholders, including oil producers and host communities have kicked against certain provisions of the PIB with a plea to the National Assembly to revisit them before passage.
In rejecting the 2.5 per cent provided in the revised PIB, the Host Communities of Nigeria Producing Oil and Gas (HOSTCOM) said it won’t accept anything below 10 per cent.
HOSTCOM National President, Mr. Benjamin Style Tams, in his presentation, said it will be absurd and economically illogical to deprive “HostCom” the right to equity shareholding in both the establishment of the NNPC Limited, the commission, the authority and the boards.
It said: “This quest to take over complete control of all our national assets by a very unpatriotic few has to stop.
“In the case of the gas flare penalty funds, the host communities, which are the direct recipients of the negative effects, are the ones to receive the gas flare penalty. “Regarding the environmental management and sustainable development of the host communities, it’s imperative that all laws and policies precedent to the commencement of any action must conform with the existing international standards inherent in our submission.”
In their presentation, the oil-producing companies under the aegis of the Oil Producers Trade Section (OPTS), led by Mr. Mike Sanger, faulted the bill for not making provisions for investment in the oil and gas sector.
“If the PIB is passed in its current form, it will not meet the government’s objectives of making Nigeria the leading destination for oil and gas investment and the recent scarcity of investment, only $3 billion out of $70 billion in Africa, will continue. Nigeria faces ever-increasing competition for investment and despite having the largest reserves, only $3 billion out of the $70 billion committed in Africa for projects sanctioned between 2015-2019 were attributed to Nigeria, representing a meagre for per cent.
“This lack of competitiveness is caused in part by the high cost of doing business in Nigeria, with overall project costs and operations costs being 69 per cent and 42 per cent higher than the global average respectively.
“A PIB, which safeguards existing projects and introduces competitive terms, is required to fully utilise the country’s resources for the benefit of all Nigerians,” Sanger said.
In another presentation, Women In Energy Network (WIEN) also raised concern over the proposal in the PIB, which stated that “each settler, where applicable through the operator, should contribute an amount equal to 2.5 per cent of actual operating expenditure in respect of all petroleum operation.”
President of WIEN and Managing Director of Zigma Limited, Mrs. Funmi Ogbue, said the 2.5 per cent is too expensive.
She said: “WIEN posits that a total of not more than one per cent consistent with other statutory provisions like the Nigerian Local Content Act 2010, replace the current figure captured in the PIB.
“This will improve investors’ perception that the industry is already overtaxed, which will attract even more foreign direct investment to the sector and the country at large.
“WIEN would like to see the deliberate inclusion of policies that will ensure that at least 35 per cent of each governing board is constituted by women.”
In his presentation, the Minister of State for Petroleum Resources, Timipreye Sylva, stated that the petroleum sector is faced with internal and external problems, including the COVID-19 pandemic that threatened the international market since 2019.
Also speaking, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mr. Mele Kyari, expressed concern that the nation’s petroleum industry has been stagnant since 2000.
“The three attempts to make this legislation work that has not succeeded but every time you have such a situation, you have uncertainties. We will not find other investors coming as long as we remain a very high-cost environment, a very uncertain fiscal environment and with other associated issues that come with it,” he stated.
Deji Elumoye, Udora Orizu