PIB: Why NASS needs patriotism

SINCE the latest drafting of the Petroleum Industry Bill (PIB) by its Technical team led by Group Executive Director of Nigerian National Petroleum Corporation, (NNPC), Engr. Abiye Membere, the sector has expectedly been witnessing deluge of reactions from stakeholders. The exercise is viewed by most opinion leaders as an excellent effort by the foresighted honourable Minister of Petroleum Resources Dr. (Mrs) Diezani Allison-Madueke to comprehensively reposition the oil and gas industry to serve its supposed purpose for the Nigerian people and trading partners in line with international best practices. While some of the points being raised by vested interests and the bill enthusiasts might sound reasonable on the face value, they might not stand the test of time and necessitate re-examining their validity to avoid pitfalls of wrong judgments. The National Assembly whose responsibility it is to pass this all important legislation more than any other institution needs sound judgments anchored on utmost national interest especially as it affects the fiscal components, establishment of host community fund and the power of the minister which essentially is the controversial areas of the bill.


The International Oil Companies (IOCs) operating in Nigeria have not hidden their antagonistic stand to the PIB. The IOCs which include Chevron, ExxonMobil, Total and Shell under the auspices of Oil Producers Trade Section have been voicing their concerns on the bill, insisting that the fiscal components if passed as drafted will make Nigeria oil fields the harshest to operate in. Disturbingly, the IOCs opposition to PIB seems to have received the backing of some local oil companies. But the question is where on the face of the earth has the role of fixing price become the responsibility of the buyer in a competitive market? It is the Nigeria who owns the commodity and knows the quality that should fix price. Good enough, the team that packaged the bill is composed of the best brains imaginable with extensive experience in the nitty gritty of the industry. The fiscal argument by oil majors therefore can be seen as mere insatiability of profit in business.

On some state governments especially the non-oil producing showing misgiving on the provision of host community fund citing 13% derivation as having taken care of the intentions of that section. It is noteworthy to realize that host community fund is meant to calm frayed nerves of the locals whose means of livelihood has been destroyed by oil exploration activities. The argument that creating host community fund amounts to excessive impoverishment of other states of the federation at the expense of the oil producing areas, is a gross insensitivity to the plight of oil host communities that bear the brunt of farmland, air and water pollution emanating from hydrocarbon related activities. Beyond that, the fund is also meant to douse tension, curb militancy and promote peace in the oil producing vicinities as no business can progress in the atmosphere of insecurity. Nigeria Extractive Industry Transparency Initiative (NEITI) and Revenue Mobilization Allocation and Fiscal Commission (RMAFC) that seem to hold this position need to understand how the federal government amnesty programme was able to increase output over between 2010 and 2013 and lend their support for host community fund establishment. In addition, the host community fund, it must be noted, is open to any local government where oil is discovered and is not the exclusive reserve of any part of the country and to step up petroleum exploration to other parts of the country especially the Benue through and Chad basin new frontier exploration agency is proposed in the bill.

Similar opposition is also being advanced by certain stakeholders that the PIB as presently fashioned conferred too much powers on the minister. In their opinion, a situation where the minister presides over the board of all the eight agencies created by the bill will not give room for efficiency as the minister is just but an individual. But this position is erroneous because that will actually enhance efficiency and in practice, the bill allows the minister to delegate his powers. Moreover, comparative assessment reveals that Nigeria’s petroleum minister has less power than ministers of petroleum across developed and developing oil producing countries and the present PIB even further reduced the minister’s power. Far from that, those having issues with PIB with respect to powers of the minister should look beyond this administration as the bill is futuristic and might not come to effect before the end of this administration. The minister has consistently assured that the bill as a legal, fiscal and institut ional framework for the oil and gas sector is all about liberating petroleum industry from the grip of inefficiency by injecting transparency, accountability, competiveness prior to answering to the needs of Nigerians as obtained in other peer oil producing nations.

Looking at the magnitude of determination with which opponents of the bill are going and political gyration trailing it, there are fears that they may sway the opinion of the National Assembly. However there is the need to conscientiously caution all the decision makers to the passage of this vital bill especially the leadership of NASS to place the collective interest of Nigeria above private, corporate or sectional interests.

The profit and loss concerns raised by the IOCs and their local collaborators should not be above the interest of Nigerian people. The PIB must be understood as a component of the government’s transformation agenda meant to reposition the hydrocarbon sector to give Nigerians fair dividend in the globally dynamic hydrocarbon industry.

By Johnson Eze, September 9, 2013