The Nigeria’s oil industry has been in existence for over five decades with the International Oil Companies (IOCs) and its indigenous counterpart making positive impact in exploration activities. In spite the immense role of major players in the country’s exploration space, it is astounding that it has no viable Petroleum Industry Bill (PIB) to guide the oil industry while it took almost fourteen years for parliament to pass only one aspect of the bill that has split into four divisions due to political upheavals.
Apparently perturbed by this unpalatable development, stakeholders converged at the Energie Platform Lecture Series in Lagos to cast their inputs on the protracted petroleum bill. Petroleum Industry Governance Bill (PIGB) took fourteen years to be passed into law and it cost the country $200 million investment to other countries and how long it will take to pass the other three aspects is of serious concern to stakeholders. Refineries cannot work because of Turn Around Maintenance (TAM) in which huge amount of money has been spent. TAM has become a jamboree and conduit pipe for embezzlement. Besides, twenty-one licences were given out by the government for private refineries due to uncertainty in the industry, investors do not want to take risk because the price of Premium Motor Spirit (PMS) is regulated hence no one can take risk. Stakeholders believed that the fiscal bill will address cogent aspect of the industry but modular refineries are not commercially viable and may not operate effectively in a free market.
Pat Maseli, Deputy Director of the Department of Petroleum Resources (DPR), that regulates the oil industry in Nigeria, was of the view that DPR is ready to comply once the other aspects of the bill are passed into law. Maseli stated that DPR is making efforts to automate its activities to avert oil theft and those conveying PMS to other countries.
The Chairman of Aiteo, Chike Onyejekwe noted that the private sector is excited with the bill and administrative aspect will complement the regulatory bill. According to him, “the new PIB will enhance the industry and it should give room for the Nigeria Oil Company (NOC) to operate.” The fiscal bill will attract investors and a lot of benefit will be derived from it with commercial framework. It will give knowledge about how the NOC will be run.
However, Senator Omotayo Alasoadura, head, Senate Committee on Upstream submitted that the PIGB which was the governance aspect of the bill will create single regulatory system. Gas, downstream, upstream and viable aspect will be given regulatory network in which operators will deal with. The ultimate is to free the industry so as to be managed like a private sector. He pointed out that the Senate will carry everyone along in the chain, there will be consultations across board with practitioners, government and all stakeholders. There will be no government interference while some powers of the Petroleum Minister have been reduced and given to operators. Alasoadura stated further that the cost of production in terms of crude oil in Nigeria is costly but has been reduced by $5 per barrel. On the aspect of the Petroleum Products Pricing Regulatory Agency (PPPRA) and Petroleum Equalization Fund (PEF), only proper regulation can obliterate these two agencies because stakeholders do not see any meaningful relevance of these organisations. The utmost priority will be privatization. The senator assured stakeholders that the recommendations will see the light of the day with time line for critical aspect of the PIB as all the bills will be passed into law. The fiscal bill is key and will not be delayed by sequence of election. The issue of Host Community Bill, some troubled aspects have been addressed and public hearing of which people will contribute has to solve the problem.
The lawmaker made it known that the present administration came to power when oil was $21 per barrel and could not take major decisions but as the economy improves, new refineries will be built across the country. The Dangote refinery will definitely do a lot to address lingering issues in the downstream sector and augment existing ones. The head of Senate Committee on Upstream, asserted that the only way oil theft and diversion can be curbed, is when local refineries are working. He observed that security agencies collaborate will truck drivers to divert fuel products. How the demand rose from 33 million litres to 50 million litres per day is incredible but the PIB is still key to efficiency and return investments.
Besides, Alasoadura fears for Nigeria and the oil producing areas owing to recent development. He advised the oil producing states to cease in their agitation and disruption of oil facilities because oil will soon be antiquated and useless. The Senator revealed that China has developed a motorcycle that will be powered on electricity. It is a big country in Asia and once it innovates then it will stop buying crude hence the country’s crude becomes useless and worthless. He stated clearly on smuggling, that there is collusion between the truckers and security agencies. Refineries will not work effectively if Nigerians are allowed to run them. For instance, after TAM, the refineries work temporarily and production drops to pave way for another TAM, it has become a port of embezzlement. Alasoadura maintained that only Public Private Partnership (PPP) can solve the problem. He posited that every patriotic Nigerian should work together to move the country forward and everything in the bill will be passed without reservation.
Austin Olorunsola, former DPR Director who is leading the team on the PIB, made it known that some of things that were unconventional are now conventional. He noted that Nigeria needs to think outside the box and move quickly to follow the trend of development since most cars will soon be electronically powered. The governance bill is just to lay the foundation for a better industry and remove the opaqueness. According to him, “the fiscal bill is the pillar including the administration bill while the host community bill is the roof.” He added, “If you build a house without proper roof, the rain will beat you mercilessly.” Olurunsola revealed that some countries came for the bill in 2008 about ten years and they have used Nigeria’s template to pass their PIB into law. Ghana is one those countries that used Nigeria’s template of PIB. He asserted that only PMS that is not regulated while others are. The new bill will be completely market driven and deregulated.
Olorunsola submitted that the Nigerian National Petroleum Corporation (NNPC) should not be making policy statement because it is the regulator. The bill will grow the oil industry and gives room for investment, ease of doing business and competitiveness. The ultimate goal is to be privately driven and the National Assembly should be supported to move the nation forward.
Apart from being a lecture series, awards were also given to operators and corporate organizations in the oil industry. Chevron won the best external relations award owing to its relationship with the media, Total won award for excellence due to its local content contribution which has to do with the Egina project. ExxonMobil was not left out in the awards, the multinational has been supportive to the media especially the Energie Platform which is always aired in the broadcast media.