Nigeria’s PIB: A litany of broken promises
With the expiration of the self-imposed April deadline for the passage of the Petroleum Industry Governance Act (PIB) by the National Assembly, stakeholders in Nigeria’s oil and gas sector have yet again, been on the receiving end of a litany of broken promises. Chukwunonso Udeh reports.
When in year 2000, the President Olusegun Obasanjo administration constituted the first Oil and Gas Reform Implementation Committee (OGIC) to recommend a policy for reforming the petroleum industry, stakeholders were optimistic that a new dawn beckoned for the country’s ailing oil sector.
By 2007, the Yar’ Adua regime reconstituted the OGIC to use the provisions of the National Oil and Gas Policy to setup legal, regulatory and institutional structures for managing the oil and gas sector. The reconstituted committee submitted a report, which redrafted several times over the course of a decade, has today morphed into the Petroleum Industry Governance Bill (PIB).
However, 17 years down the line, Nigerians still have their eyes fixed on the horizon as sun has refused to rise on the PIB, thereby, casting large swathes of darkness and associated confusion across the landscape of Nigeria’s petroleum industry.
For a critical policy document which aims at revamping the regulatory framework of operations in Nigeria’s petroleum industry, the delay in its passage has avoidably set Nigeria back several decades. As a result, Nigeria has witnessed a decline in exploration activities; infrastructure development has been non-existent, while regional competitors have taken up the slack to make themselves more attractive to suitors.
At the beginning of 2017, the popular narrative from government sources was that everything was on course to pass the PIB latest by April 25, thus generating excitement among many who actually believed and cautios optimism from those who had learnt to take anything about the PIB with a pinch of salt. Yet again, Nigeria's fragile and fickle political system failed to match words with action as the due date for the sun to rise on the PIB has elapsed with consequences for the country’s struggling operators.
The PIB imbroglio is not short on conspiracy theories among which include the claim that powerful vested Nigerian interests would rather oppose the bill whose passage would upset their nice and tidy arrangements for fleecing our commonwealth. On the other hand, some fingers point to the oil majors who activities stand to be considerably altered if the PIB were to be passed.
Nigerians have not hidden their disdain for the manner in which the PIB has been handled and voiced their concerns at the delays and risks of not prioritizing its passage.
Head of EcoBank Energy Research, Dapo Oni, said “The kind of message we need to send out is that we are ready to provide the right regulation; and that is important because the Minister of State for Petroleum Resources has announced that he wants to do a proper licensing round and marginal field round as well. Those two things are dependent on regulation because people want to know who they will be relating with. If you are trying to do a licensing round, these critical issues have to be ironed out. Regulation is one of the best body languages we can send out.”
Oni sadly recalled that a Senator on the Petroleum Committee indicated that they were looking at giving the Petroleum Industry Bill (PIB) its third and final reading in March. Alas, we are three days into the month of May and the status quo remains.
Likewise, Senior Special Adviser to the Ogun State Governor on Energy, Ronke Onadeko, expressed disappointment with the handling of the PIB, having stuck her neck out, only for the bill to be delayed further. “I am embarrassed and ashamed. I have given international interviews saying we are almost ready to pass the bill, but here we are,” she said.
“If that bill is passed, it will open up the market. I can’t remember when last we had a bid round in this country. Everybody else is having bid rounds and money is moving to other markets; East Africa, Angola and Ghana, while Nigeria is stuck and we are not doing anything. We have wasted so much time. If only we can get our act together so that the minute the market picks up, we should be ready. Everybody says they cannot make a decision because they don’t know what the fiscal terms are or what the policies will be. International companies coming to invest need to know all of these things for them to plan properly,” Onadeko told M&P.
In view of the expiration of the self-imposed deadline by the National Assembly to pass the PIB, the Buhari administration has missed out on one significant element that would have given impetus to its ambitious Economic Growth and Recovery Plan (EGRP). Other implications include resumption of militancy and destruction of petroleum infrastructure in the Niger Delta, persisting oil theft, further destruction of the environment from activities of illegal refiners, no new reserves discoveries, dearth of new businesses and absence of technical expertise.
According to a petroleum policy analyst, Awele Okigbo, the PIB is a landmark opportunity to herald a new era of reform in the oil and gas industry what will maximise Nigeria’s vast potential, restore transparency and facilitate a thriving industry and overall economy. Failure to pass the PIB has and will lead to a reduction of investments in the sector until there is clarity as to what provisions will be contained in the final Bill and how it will affect the industry. With the rise of other attractive petroleum industries in Africa (Angola, Ghana etc.), Nigeria must understand that investments are fungible and will eventually flow to alternative countries that are more receptive.