- FG Backs Single Petroleum Sector Regulator, Wants Minister as Chair
The federal government has said it was in support of the idea of a single regulator for Nigeria’s entire petroleum sector as proposed in the Petroleum Industry Governance Bill (PIGB) currently before the Senate for consideration.
It however stated that it would want the commission to be created by the PIGB in this regard to be chaired by the minister of petroleum resources.
The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu stated this in his address at the National Assembly during the public hearing in the bill, which is sponsored by Senator Tayo Alasoadura from Ondo Central.
“We are aligned on the concept of a single regulator for the petroleum industry. What Nigeria needs going forward is a regulator that covers the field, as opposed to dissipated regulatory power amongst agencies.
“The regulator should cover upstream, midstream and downstream oil, gas and products regulation, as well as technical, economic and Health, Safety and Environment (HSE) regulation,” said Kachikwu.
Speaking on the composition of the proposed commission, the minister explained: “There needs to be careful calibration of the relationship between the role of the minister as the institution charged with overall supervision of the industry vis-à-vis that of the super regulator as the institution responsible for regulation.
“The calibration must ensure checks and balances on regulatory power through tools such as administrative law; however, it seems essential that the power to issue regulations should at all times reside with the minister.”
He stated: “Section13 does not envisage a position for the minister on the board of the commission. We propose that the minister chair the board of the commission to ensure effective interface between the regulatory and policy making institutions.”
The PIGB, he stated proposes four year terms for commissioners but that in accord with best practice, the government would suggest that staggered terms for commissioners be considered in order to ensure continuity in the governance of the commission such that there would not be vacancy of executive commissioners in office at any time.
Kachikwu also said the government would propose that the PIGB consider setting up a technical directorate for the industry, as well as an open registry regime to advance transparency in the affairs of the commission.
“A core aspect of the reforms that we propose to the effectiveness of the minister’s powers to issue policies, supervise the industry and manage Nigeria’s petroleum resources, is the need for a well-resourced and solid technical back office.
“Hence, the National Oil Policy and the National Gas Policy contains proposals for institutional reforms at the ministry of petroleum resources in this regard. It is our position that the PIGB should address this long standing issue legislatively by creating a Petroleum Technical Directorate,” he stated.
He added: “An essential issue, going forward, is the need to establish a registry of records for all the titles to be issued and managed by the commission. This will aid public access to information, and the due diligence reviews by third parties into assets.”