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The Senate stirred the honest net officially last Tuesday when it announced through the Chairman, National Assembly’s Joint Committee on Petroleum Industry Reforms, Senator Tayo Alaosoadura, that it would pass the controversial Petroleum Industry Governance Bill (PIGB) in which the absolute power of the president and minister of petroleum resources would be whittled down.
Nigeria’s upper legislative arm went a step further to water down authority of the executive to give out the common resources without recourse to “the people through the National Assembly.”
This major change, New Telegraph gathered exclusively last Tuesday, was a part of the PIGB undergoing legislation before the Senate.
Speaking with this newspaper on the sideline of the just concluded Nigeria Oil and Gas (NOG) conference in Abuja, Alasoadura said that oil allocation would henceforth be done by the Nigeria Petroleum Regulatory Commission (NPRC) subject to ratification by the National Assembly.
April is the date
Stating that the bill would be passed “by March or latest April,” Alasoadura said the aspect of the petroleum law, which gives the president and the minister the absolute power to single-handedly give oil blocs to people had been reviewed with the PIGB.
Unlike what obtains when the president or oil minister, without recourse, allocates oil bloc, the lawmaker declared: “What we are proposing is that the board of the Nigeria Oil and Gas Regulatory Authority to be formed through Senate legislation will meet, assess and recommend people for oil blocs and other things to Mr. President through the minister of petroleum resources.”
Corroborating Alasoadura’s view, a member of the PIB redrafting committee told this newspaper that the Senate had successfully removed power of president and oil minister to award oil blocs.
All the oil blocks in the country were, since independence, allocated by the president and or minister of petroleum resources as the case may be.
“The law that guarantees the president and/or the minister this authority is being revoked through PIB and the only reason that this will continue is if the president refuse to accent the bill,” he said, adding: “what we are to have is subject to ratification by the National Assembly.”
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Casualties of new law
The president’s power is not the only casualty in the governance bill. Aside from stripping the president of the power to allocate oil blocs, the Senate had on paper, through the PIGB, scrapped the existing Department of Petroleum Resources (DPR), the Petroleum Products Pricing Regulatory Agency (PPPRA) and Petroleum Inspectorate (PI), thereby creating a new body to be known as the Nigeria Petroleum Regulatory Commission (NPRC).
The NPRC would take over the functions of Petroleum Inspectorate (PI), the DPR and the PPPRA. Many Senators have said that the PIB, which is currently before them would support the creation of this new commission, which is expected to administer and enforce policies that are related to all aspects of petroleum operations in the country.
Creation of PIGB
Also, if the new law sees the light of the day, two new companies- he Nigeria Petroleum Assets Management Company and National Petroleum Company-would be established.
The NPC would be vested with certain assets and liabilities of Nigeria National Petroleum Corporation (NNPC), just as the National Petroleum Company, for instance, will operate as a full independent commercial entity.
Also as part of moves to unbundle the NNPC and the petroleum Industry, the PIGB is proposing that the Ministry of petroleum Resources be renamed as Ministry of petroleum incorporated, while 30 per cent of the NNPC stakes would be sold through Independent Public Offer (IPO).
While the law is, on its surface value, better for Nigerians, a fight back on the intents of the law makers is expected from the president’s men before the bill is passed. This is expected to be resolved in favour of Nigerians who are the real owners of the assets.
Flashback: Where it all began
Senators at a four-day retreat on the PIGB in Uyo the Akwa Ibom State capital, last year, were sharply divided on the powers vested on the president and the minister to take certain decisions on issues relating to the petroleum industry.
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Alaosoadura, who insisted that every action taken must be in tandem with the provisions of the constitution, said: “We cannot go outside the constitution. “If we cannot do that, we must ensure that whatever we do is in tandem with the provisions of the constitution. We must be careful about semantics.
A ministry was created to supervise the oil industry. We must not take away the entire powers of the ministry.” Alaosoadura’s position was, however, countered by his cochairman, Senator Bassey Albert Akpan, who warned against arrogating too much power to the president or the minister.
Chairman Gas Committee of the Senate, Senator Akpan, stated that the new bill must come up with ways to guide against abuses and protect the collective interest of Nigerians.
“You cannot commit the country to any treaty without the approval of the Senate,” he said, adding that every treaty must be domesticated.
“Even if it is in the constitution, we still need to include it in this bill. We are trying to come up with this bill because of the inefficiencies in the industry.
We must be conscious of the kind of powers we give to the minister. “Tomorrow, we may have another minister there. As a Senate, we have the power of control. Let us not be biased. We have to protect the interest of Nigerians,” he said.
30 % sale of NNPC
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Parts of the key purposes, which the PIGB has come to serve, is to ensure smooth sale of government’s 30 per cent stakes in the NNPC. Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu, had earlier confirmed plans to sell 30 per cent of the NNPC’s assets subject to the passage of PIGB.
Federal Government, Kachikwu who was once the Group Managing Director of NNPC said, is planning to hold its first initial public offering (IPO) of assets owned by the corporation in 2018.
This, he said, in an interview in Abu Dhabi, “is inevitable.” According to him, “part of the cleaning up process that we are doing is to prepare for that,” he said, maintaining that the plan is to sell NNPC’s shares in its refining and distribution business and “select” exploration and production assets to the public. NNPC manages Nigeria’s stakes in joint ventures with international oil companies that pump the country’s crude.
It also operates refineries and a distribution network of depots and pipelines across the country of about 180 million people. The PIGB, on the other hand, is proposing that when the commission is created, it shall be vested with all assets, funds, resources and other movable and immovable properties, which immediately before the commencement of operation of the new commission, were held by the PI, DPR and PPPRA.
The new oil commission
The new commission, among other things, will also “administer and enforce policies, laws and regulations relating to all aspects of petroleum operations, which are assigned to it under the provisions of the Act. Consideration of some sections of the proposed bill were, however, suspended, following the inability of lawmakers to agree on certain grey areas.”
Three million barrels daily target
Basking in the euphoria of the new governance law, the NNPC, last Tuesday, expressed commitment to growing Nigeria’s crude oil production to three million barrels daily. Group Managing Director of NNPC, Dr. Maikanti Baru, stated this in a keynote address entitled: “NNPC’s Commercial Strategy and Priorities” at a conference in Abuja.
He said that the corporation would also grow the Nigerian Petroleum Development Company (NPDC)’s crude oil production to 500,000 barrels per day by 2020.
This, he said, would also include growing the NPDC’s gas production to 1500mmscf per day within the same period. Everything, he said, was being done to achieve the target reserve growth as well as increase national crude oil production to three million barrels per day from the current 2.2 million barrels per day.
He also said NNPC would sustain frontier exploration in the inland basins to meet government’s aspiration to achieve crude oil and gas reserves of 40 billion barrels and 200 trillion cubic feet respectively by 2020. Baru put the current oil and gas reserves at 37 billion barrels and 192 trillion cubic feet (tcl) respectively.
“Furthermore, efforts are currently on-going amongst all stakeholders to reduce the level of gas flare by converting most of the flared volumes to ensure commerciality of the gas resources,” he stated.
Conclusion
The Senate and the Presidency should close ranks on the PIGB by ensuring that the bill is passed as schedule without any major hiccups. Proper consultation between the executive and legislative arms of government is important and the duo should jaw-jaw on the issue.
All these must be done with sincere commitment to better the lots of Nigerians, including Niger Deltans, who are the real owners of the oil blocs.
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