- PIB Faces Uncertain Future as Elections Draw Near
Against the backdrop of the refusal of President Muhammadu Buhari to assent to the Petroleum Industry Governance Bill and as electioneering intensifies ahead of the 2019 elections, industry experts have expressed doubt about the Petroleum Industry Bill becoming law in the current administration.
A key obstacle to the growth of the nation’s oil and gas industry has been widely described as the regulatory uncertainty caused by the delay in the passage of the PIB.
The bill, which seeks to change the organisational structure and fiscal terms governing the industry, suffered setbacks in the 6th and 7th National Assembly.
To fast-track its passage into law, the current National Assembly decided to split the bill into four parts – the PIGB, Petroleum Industry Administration Bill, Petroleum Industry Fiscal Bill and Petroleum Host Community Bill.
After its passage by both the Senate and the House of Representatives, the PIGB was transmitted to the President for assent in July to enable it to become law but it emerged last week that Buhari declined to accent to the bill.
The Senior Special Assistant to the President on National Assembly Matters (Senate), Ita Enang, identified the provision of the PIGB permitting the Petroleum Regulatory Commission to retain as much as 10 per cent of the revenue generated as one of the reasons Buhari declined assent to the bill.
A petroleum expert, Mr Bala Zakka, in a telephone interview with our correspondent, said, “As far as the oil and gas industry is concerned, there is every reason to say that the inability of Nigeria to pass the PIB into an Act is an indication and demonstration of lack of seriousness. There is a justification to conclude also that Nigeria does not know the benefits that will accrue to the country by passing the PIB.”
Bala, who noted that he did not support the splitting of the PIB into four parts, said he was not surprised that the President didn’t assent to the PIGB.
He said, “If we want a good job done on the entire PIB, then this 8th National Assembly cannot meet up. As you can see, only the PIGB has been passed to the President for assent. There are three other bills and the fiscal regime bill and the host community bill are even more contentious. So, if you have those three bills waiting, that means they have only done 25 per cent.
“And most of the National Assembly members are fighting for their political survival in their respective constituencies, and we are already in the heat of the campaigns before the elections. So, there is likelihood that nothing will be achieved. It is very clear that the PIB will outlive the 8th National Assembly.”
A former President of the International Association for Energy Economics, Prof. Wumi Iledare, is of the view that the other three bills are anchored on the PIGB.
He said, “The National Assembly can go back and rework the rejected bill by the President into the administration bill. In that case, the administration bill then becomes the governance and administration bill. That is a possibility. However, the political environment is even toxic because the entire National Assembly is now fragmented. In my opinion, to be able to override the President’s position because now, it is about the APC and the PDP.”
The Chairman, PENGASSAN and NUPENG National PIB Committee, Mr Chika Onuegbu, said recently that the country had lost some $235bn of investments due to its inability to legislate on the proposed reforms in its oil and gas industry.
He said over $15bn yearly investments were withheld or diverted by investors to other countries because of the uncertainty as investors did not know which rules would guide their investments.
According to him, $120bn could have been earned in six years, from 2010 to 2016, had the reforms proposal (PIB) been passed into law in 2009.
Some industry experts have said the President’s rejection of the PIGB poses a significant setback to the oil and gas industry reforms.
The reform efforts, which date back to April 2000 when the government of President Olusegun Obasanjo set up the Oil and Gas Reform Implementation Committee, have suffered serious setbacks.
Onuegbu, in a telephone interview with our correspondent, said, “We must remember that the National Assembly members are politicians; the President is a politician. Politics is about dialogue; so whenever things that ordinarily should be resolved by dialogue are not being done so by politicians, then it calls for concern.
“I think that there is still an opportunity for the National Assembly and the President to close ranks and ensure that we have a PIGB, and that others are passed into law. Now, I don’t know what is going to be the fate of the Host Communities Bill, which the people of the Niger Delta are looking forward to; I don’t know what is going to be the fate of the Fiscal and Administration Bills?
“I want to be optimistic that the PIB will be passed because it is in the interest of the country; the PIB has become a huge project. So, if we cannot get it right this time and pass it into law, it means that we will be talking about reform for 20 years. While we are talking about reform, the new energy transition is staring us in the face. So, I think, as a country, we should come together and move the oil and gas industry forward.”
Another expert said, “The option available is for the National Assembly to overrule the President. This would require a two-third majority of members present and voting in both houses of the National Assembly. In view of the current political climate, this does not seem likely.”
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