Recently, Nigeria’s foremost oil industry association, Petroleum Club, had a Workshop in which stakeholders made presentations about the industry bills to members. Dr. Godswill Ihetu is the Chairman of the Club, in this interview with some journalists shortly after the Workshop, he made it known that the Club is more concerned about the governance aspect of the bill since it has been passed to President Mohammadu Buhari awaiting presidential assent. He spoke on the host communities in the Niger Delta that there should be trust and strategic plan for them. Ihetu stated further that escalation of crude oil price gives room for subsidy.
Can you briefly tell us about the significance of this Workshop?
It is about the details of the Petroleum Industry Governance Bill (PIGB) and other bills as well, the presentations were fantastic
What’s your position as Petroleum Club Chairman with regards to the PIGB that has been passed and waiting presidential assent? Also, what are your concerns and comments about other bills?
Well! There are quite a number of comments on both the PIGB and the other three bills. Unfortunately, we didn’t have time to talk about the Host Community Bill. Those drafting the documents are doing a good job and you cannot have a perfect document or perfect presentation, but, by and large, what is in the PIGB is quite commendable and we will like to support the work they have done. They have tried to move it as quickly as possible.
Other bills were presented in the Workshop, but the bill on the Host Community was not presented, why?
It was not presented because of time.
Is it because of time or there was nobody working on it?
If you see our notice, we said the Workshop will start by 11am to 3pm but as I speak now, it is almost past 4pm. The Workshop went well and people were asking questions on the Host Community Bill and remember that the presenters said they will soon make the Host Community draft available for discussion and inputs. The most important bill for Petroleum Club is the PIGB because it is ready for presidential assent. They did not avoid the Host Community Bill presentation. It is something that will definitely be done and even in our plan, we intend to look at the remaining three bills including the Host Community bill. Nobody had a copy of it but it will soon be circulated for public view.
There is concern about the Host Community Bill. Don’t you think if it is not well addressed, it will put spanners in the works?
The summary the presenters gave was fantastic and that is something I have always looked forward to not just giving out things to these people but there should be a trust for the communities. It is not a matter of what one chief, community leader or someone else says, but a strategic plan should be put in place for them.
One of the emphasis that was placed on PIGB was the inclusion of Petroleum Equalization Fund (PEF), what is Petroleum Club doing about this?
The question about PEF is that, is the industry going to deregulate? If we are going to deregulate, then PEF becomes a bit redundant. But one of the presenters said it is something that has a timeline and it is National Assembly bill, the legislators were looking at the national interest and said they will recommend a gradual phase-off of the bill and not something that can be done overnight. You can see the political issues here and even deregulating the downstream is not easy. It has been a recurring issue that has no headway and now the country is still paying subsidy. Nigeria is paying subsidy because crude oil price which is a big element has gone up. When the present administration came to power, crude oil was low and it could claim not to be paying subsidy but now there is no way with the oil price escalating, the gap will always be there. That was the problem we had three to four years ago when oil price went up as high as $101, 140 or thereabout and the subsidy provision became so large. One governor was even accusing the government of inflating subsidy. It is a function of crude oil price unless if you want to jerk up the market price for everybody then you have a problem. It is an aspect that government tends to soft pedal.
On the aspect of deregulation, many regulatory bodies like Petroleum Products Pricing Regulatory Agency (PPPRA), Department of Petroleum Resources (DPR) among others were mentioned. Bringing these regulatory bodies into one umbrella, is it not going to be cumbersome?
I think it is the PPPRA that we know has kicked against one regulator and I don’t believe it will be too cumbersome. They like what they are doing and they will rather remain separate but the argument for one regulator is also good because you don’t have boundary or people over stepping their bounds. This is the issue that one regulator and one responsibility will take care of. Otherwise we will have all kinds of gray areas that will not be good for the oil industry.
The Petroleum Development Trust Fund (PDTF), of what relevance is it to the industry since the government is thinking of scrapping several other bodies?
I have not read the law setting PDTF up, but I see it developing high caliber personnel for the oil industry. It gives scholarship to engineers on Master’s Degree level in all kinds of fields related to petroleum. This is what I see PDTF doing and in some cases it had given some subvention to universities. This is what it is, it funds and develops high caliber personnel for the oil industry, which is okay.