- Oil Industry: PIB Tops Stakeholders’ Concerns
The nation’s oil and gas industry could get back on its feet this year, according to industry experts, if the critical issues such as the passage of the Petroleum Industry Bill and the concerns in the Niger Delta are properly addressed, ’FEMI Asu reports.
With another year gone without the passage of the Petroleum Industry Bill, industry experts have expressed concern that the bill may suffer serious setback as electioneering kicks off ahead of the 2019 elections.
A key obstacle to the growth of the Nigerian 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.
Currently before the 8th National Assembly, it was split into four parts — Petroleum Industry Governance Bill, Petroleum Industry Administration Bill, Petroleum Industry Fiscal Bill and Petroleum Host Community Bill — to fast-track its passage into law.
The Senate on May 25, 2017 passed the PIGB, with its President, Dr. Bukola Saraki, saying in September that the upper chamber was working to ensure the passage of the other bills in the fourth quarter of last year.
The Chairman, National PIB Committee, Petroleum and Natural Gas Senior Staff Association of Nigeria and Nigeria Union of Petroleum and Natural Gas Workers, Mr. Chika Onuegbu, stated that the Senate promised to pass the other aspects of the PIB in the first quarter of 2018.
He said, “It is our hope that they will deliver on that promise. Let them see what they can do to make sure that the public hearing on the remaining three bills are done to ensure the passage of the bills in Q1 2018, so that we will know that by Q2, the pressure will be on the President to assent to those bills.
“For Nigerians and those in the industry, we want to see the passage of a PIB that actually addresses the concerns of stakeholders and move the industry forward. We hope that the President and his team should fast-track the reform in the industry by ensuring that the PIB actually becomes law latest by the second quarter because thereafter, politics will take over every other thing that we will do as a country.”
Onuegbu said the outlook for the industry looked bright considering the recent rally in global oil prices.
“So, the next thing is about production, and that is where the issues around the Niger Delta come in; that is where the policies of the Federal Government come in, so that Nigeria will continue to benefit from the gradual recovery in oil prices,” he added.
An energy expert and associate professor, University of Lagos, Dr. Ayoade Adedayo, said, “The outlook does not look all that bright. Although last year, the minister (Kachikwu) was able to get through his policy documents — the national petroleum policy and national gas policy – the problem is that until we pass the PIB, we are still in the same rot, and while we remain in the rot, the industry will not recover; the transparency, governance and investment concerns will continue to haunt us.”
He decried the lack of investment in exploratory activities in the industry in recent years, saying, “If the rig count in a country is low, it shows the country is not healthy, and I think that the health of the sector should be a big concern to all the policymakers.”
“My concern is that because we are moving already into the territory of national elections, there is no way the National Assembly people will be focused enough to drive this legislation through,” Adedayo said.
The Vice President/Head of Energy Research, Ecobank, Mr. Dolapo Oni, said the industry had gone through a lot in recent times, adding, “The key things we are looking forward to in 2018 are regulatory changes. We expect all the various bills that are at different stages to gain some traction.
“I think people are interested in marginal fields bid round but financing the acquisitions is going to be a challenge.”
The Chief Executive Officer, Gacmork Nigeria Limited and ex-Chevron executive, Mr. Alex Neyin, who stressed the need to create an enabling environment for investors, expressed concern about the management of the industry.
He said, “My major concern is that they don’t have the right people to manage the industry. As long as the government is focusing more on what it can get, they are going to be in trouble. It is very unfortunate that we find ourselves in this mess.
“When you don’t have a defined policy, investment in the industry will be difficult. People want to see clear, definite policies so that when they invest money, they know when they get return on their investment.”
According to an energy expert and Partner at Bloomfield Law Practice, Mr. Ayodele Oni, there is too much vested interest in the PIB.
He said oil production would likely remain high for most of the year with the government trying to impress ahead of the 2019 elections.
“Insurgency may commence in late 2018 in the Niger Delta in a bid to discredit the government ahead of the elections,” he added.