Ex-NNPC Legal Adviser questions status of natural gas devt in PIB

A former Company Secretary and Legal Adviser of the Nigerian National Petroleum Corporation (NNPC), Prof. Yinka Omorogbe, has disclosed that there are no provisions in the draft Petroleum Industry Bill (PIB) currently before the National Assembly that takes adequate care of the development of Nigeria’s natural gas.

Omorogbe stated recently in Abuja on the heels of incessant drop in gas supply to thermal power plants in the Nigeria, that gas supply obligations to thermal power plants could remain erratic for a while following lack of adequate provisions to guarantee improved development in the country’s downstream natural gas sector.

She explained at the 7th Annual Nigerian Association for Energy Economists (NAEE)/International Association for Energy Economists (IAEE) conference that as much as passage of the PIB is wholly awaited, the country’s natural gas sector will mostly gain less from its passage.

“Energy reform has never really been driven as a whole in Nigeria, it has been sub-sectional development trend and even at that the passage of the PIB will only be the beginning of reforms in the oil and gas industry.
The present draft before the national assembly does not adequately cater for the development of natural gas, even with provisions on natural gas administration, there are no specifics for natural gas investment and development especially with such clarifications as to the amount of natural gas that should go to the power sector,” Omorogbe said.

She further noted that: “Our natural gas sector lacks structures that should help develop it for better benefits. It is good to have a law like the PIB but it is another thing to have a framework that works in place, it is important to have a good framework that will address such challenges in the natural gas sector and for as long as the electricity sector is dependent on gas, we need to have such framework for downstream natural gas.”

“I am aware that they are talking about developing a framework for natural gas and leaving the rest of the petroleum sector to continue to function as it does but I think that will be wrong because under the present condition in Nigeria, it is impossible to develop gas and leave out crude oil and others, the entire sector is in need of reform,” Omorogbe added.

In her assessment of legislative processes on the PIB, Omorogbe who was a member of the Oil and Gas Sector Reform Implementation Committee (OGIC) and chair of the legal and regulatory subcommittee, which was, inter alia, responsible for drafting the PIB that was sent to the national assembly by late President Musa Yar’Adua in December 2008 said that it was a “motionless motion.”

Section 269 of the 2012 draft PIB which dwells on domestic gas supply obligation and market management however stated in summary that the national gas master plan will be subjected to constant update by the minister of petroleum resources taking into consideration the need for sustainable development and utilisation of the natural gas resources of Nigeria.

It further noted that the annual update will take into consideration the gas demand requirement (“Domestic Gas Demand Requirement”) which shall be the aggregate of the quantity of gas required to meet the gas demand for the strategic sectors, as determined by the government from time to time, within the domestic economy for a specific period of time, not exceeding twenty years.

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