Dr Ibe Kachikwu, Minister of State Petroleum Resources, Thursday in Abuja expressed the hope that the Petroleum Industry Governance Bill (PIGB) would be signed into law by June, 2018.
The Minister noted that following the disposition of the National Assembly to the Bill, the harmonized version will very likely be ready by next month, and the signing into law likely by June. The bill is currently undergoing harmonization by a joint committees of the Senate and the House of Representatives.
Dr Kachikwu, represented by his Senior Technical Adviser, Policy and Regulation, Mr. Adegbite Adeniji, was speaking at a roundtable themed: Critical reform issues contained in the PIGB, organized by the Nigeria Natural Resource Chatter (NNRC) in partnership with Media Initiative on Transparency in Extractive Industries (MITEI).
“With the work that has been done so far, we are targeting June as the date we think the PIGB can become law before legislative activities of the current National Assembly end,” the minister said.
The law, according to Kachikwu, will, when in force, insulate the proposed regulator, Petroleum Regulatory Commission (PRC), from interference. “The aim is to ensure that both the policy and regulation duties are clearly spelt out because we need institutions to implement the policies,” he said, and “ensure that both the operators and the government play by the rule.”
With the new regulator expected to combine the functions of the existing Petroleum Inspectorate (PI), the Department of Petroleum Resources (DPR) and the Petroleum Products Pricing Regulatory Agency (PPPRA), Dr Kachikwu used the opportunity to allay fears over the sacking of workers of these agencies, explaining that they would rather be assimilated into the new regulatory body.
He however, pointed out that “Where there are gaps in the manpower it provides an opportunity for people to be appointed from outside, because you want to put in new ideas in the whole process. In that process, you preserve the jobs, and you also attract a pathway for the employment of other skills from outside to help energise the new system.”
Earlier in her welcome remarks, The Program Coordinator, NNRC, Tengi George-Ikoli while calling for a.quick assent to the bill upon the passage of the harmonized version, said Nigeria had lost $275 billion as a result of the non-passage of the Petroleum Industry Bill (PIB), into law over the years.
“Analysts say that Nigeria has lost over $235 billion due to its inability to pass the Petroleum Industry Bill (PIB) into law since the reform in the Nigerian petroleum industry was kick-started almost two decades ago. Comparatively over the last five years, Uganda, Kenya, Tanzania and Ghana all passed their respective petroleum sector bills in 2012, 2016, 2015 and 2016 respectively.”
She noted that as a result Nigeria is no longer as competitive globally; or even within the continent of Africa, and emphasised the need for the PIGB passage in order for Nigeria to remain a dominant force in Africa’s hydrocarbon sector.
Presenting a paper titled, “Critical Reforms Issues Proposed in the PIGB,” Prof. Wumi Iledare, President Nigerian Association of Energy Economics, said the summary of the key changes in the bill are accountability, governance and transparency as well as meritocracy for appointment.
He posited that there is likely no reason for the bill not to get assent as it’s contents are in line with the document already ratified by the Federal Executive Council.
He pointed out that the new institutions to be created by the PIGB must operate as intended with robust controls, checks and balances as well as consequences and devoid of wastes and leakages.
In his opening speech at the event which had in attendance participants from Civil Society Organisations, oil and gas operating companies, government agencies, the media and other experts, National Coordinator of MITEI, Mr. Collins Olayinka, urged the media to be proactive and be at the fore front of the push for a quick passage of the harmonised version and assent to the PIGB, reiterating that “as journalists we cannot be passive reporters.”
About the PIGB
The PIGB was recently passed by the House of Representatives after same passage by the Senate in May last year. It is presently undergoing harmonisation by both legislative chambers.
When signed into law by the President, the PIGB is expected to most importantly, restructure and reform the oil sector by unbundling government controlled Nigerian National Petroleum Corporation (NNPC) and create an independent agency tasked with effective operationalization and regulations of the sector.
The bill aims to establish the Nigerian petroleum regulatory commission as a one-stop regulator that will be responsible for licensing, monitoring, supervising as well as enforcing industry laws, regulations and standards. In other words, the bill is seeking to institutionalize processes instead of residing powers in personalities as is the present case.
It is also expected that the bill which seeks to attract investors and open up the sector for investment by restoring business confidence will help resolve the issues plaguing the downstream sector.
Furthermore, the bill would modernize operations in the petroleum industry by overhauling the entire system in line with best practices. It will promote openness and transparency in the sector by clarifying the rules, processes, and procedures that govern the Nigerian oil and gas sector while also making it mandatory for processes and operations to be digitalized. These are aimed at significantly reducing corruption in the sector and make it more efficient and productive.