Following the uncertainty that for long surrounded the Petroleum Industry Bill (PIB) and the consequent lack of progress and stagnation in the industry, Nigeria lost an estimated $50 billion worth of investments in 10 years, President Muhammadu Buhari has said.
Buhari spoke Wednesday at a brief ceremony to celebrate the signing of the Bill into an Act shortly before the Federal Executive Council (FEC) meeting in Abuja.
He said the stagnation stunted the nation’s economic growth and its prosperity.
The president cited lack of political will on the part of past administrations to actualise the needed transformation.
With the Act, Buhari said, the decades of uncertainty and under-investment in the petroleum industry were gone.
“We are all aware that past Administrations have identified the need to further align the industry for global competitiveness, but there was lack of political will to actualise this needed transformation.
“This lack of progress has stagnated the growth of the industry and the prosperity of our economy. In the past ten years, Nigeria has lost an estimated US$50 billion worth of investments due to uncertainty created by the non-passage of the PIB.
“This administration believes that the timely passage of the Petroleum Industry Bill will help our country attract investments across the oil and gas value chain.
“In view of the value our Nation and investors will derive from a stable fiscal framework for the oil and gas industry, our Administration has found it necessary to work with the two Chambers of the National Assembly to ensure the passage of the PIB,” he said.
President Buhari further said signing the bill was part of the administration’s commitment to building a competitive and resilient petroleum industry that would attract investment, improve our revenue base, create jobs and support our economic diversification agenda.
He said as a “nation that depends on oil resources for the development of other sectors, Nigeria runs a Petroleum Industry that is governed largely by laws enacted over 50 years ago such as the principal legislation; the Petroleum Act of 1969 and other obsolete legislations.”
Buhari further said the transition of the bill to “Petroleum Industry Act 2021” marked the beginning of the journey towards a competitive and resilient petroleum industry that would attract investments to support the nation’s Economic Recovery and Growth Plan.
“The Petroleum Industry Act 2021 creates a regulatory environment that would ensure efficiency and accountability across the oil and gas value chain and reposition NNPC to a commercially driven National Petroleum Company that is accountable to the Federation.
“The Act also provides for a direct benefit framework that will enable sustainable development of Host Communities. I appeal to the host communities to look carefully at the contents of the Bill which in the implementation will bring real and lasting benefits to them.
“Furthermore, the Act provides for deliberate end to gas flaring which would facilitate the attainment of Nigeria’s Nationally Determined Contributions of the Paris Agreement through a funding mechanism to support gas flare out project in host communities,” he said.
President Buhari said the administration believes that the timely passage of the PIB “will help our country attract investments across the oil and gas value chain.”
Directs implementation
While directing immediate implementation of the framework for the Petroleum Industry Act (PIA), the president urged all relevant stakeholders to comply and reposition for full activation within 12 months.
President Buhari said the Minister of State for Petroleum Resources, Mr Timipre Sylva, would head the implementation team, urging all Ministries, Departments and Agencies (MDA) to adjust to the transition, designed to reposition the economy.
“To consolidate the commitment of this administration to delivering the value proposition of this law, I have approved an implementation framework commencing immediately to ensure the industry envisaged in the new law begins to take shape.
“The implementation process to be headed by the Hon Minister of State, Petroleum Resources is hereby tasked with the completion of the implementation of this act within 12 months. I am therefore directing all relevant Ministries, Departments and Agencies of government to fully cooperate in ensuring the successful and timely implementation of this law,” he said.
The president commended the leadership of the 9th Assembly for their continued pursuit of national aspiration and demonstration of mutual harmony with the Executive in the pursuit of patriotic outcome in passage of PIB.
“I also commend the entire team in the executive that worked tirelessly to ensure the delivery of this strategic legislation for our country. I thank Nigerians and other industry stakeholders for their contributions and support in achieving this historic landmark,” he said.
The ceremony was attended by Senate President Dr. Ahmed Lawan, Deputy Senate President Ovie Omo-Agege, Deputy Speaker House of Representatives Ahmed Idris Wase and other lawmakers, members of the Federal Executive Council (FEC) and NNPC Group Managing Director Mele Kyari.
Names implementation committee
Meanwhile, Special Adviser to the President on Media and Publicity, Mr Femi Adesina, has announced members of the steering committee to be headed by Mr Sylva.
Other members are: Permanent Secretary, Ministry of Petroleum Resources, Group Managing Director, NNPC, Executive Chairman, FIRS, Representative of the Ministry of Justice, Representative of the Ministry of Finance, Budget and National Planning, Senior Special Assistant to the President on Natural Resources, Olufemi Lijadu as External Legal Adviser, while the Executive Secretary, Petroleum Technology Development Fund serves as Head of the Coordinating Secretariat and the Implementation Working Group.
The statement said: “The primary responsibility of the steering committee shall be to guide the effective and timely implementation of the PIA in the course of transition to the petroleum industry envisaged in the reform program, and ensure that the new institutions created have the full capability to deliver on their mandate under the new legislation.”
The committee has 12-month duration for the assignment during which periodic updates would be given to Mr President, Adesina stated.
‘3% to host communities recipe for crises’
But Rivers state Governor Nyesom Wike has said the provision for direct disbursement of 3 percent to host communities in the Petroleum Industry Act (PIA) is a recipe for sustained communal conflicts which would eventually negate whatever good the federal government had intended to achieve with the provision.
The governor also said without a legal machinery to manage both the identification of host communities and disbursement and distribution of funds due to the beneficiaries, they would be thrown into unnecessary wrangling.
While acknowledging the courage of the 9th National Assembly to eventually pass the PIB and the consequent presidential assent, the governor however picked holes in the Act.
He said the failure to establish a legal machinery to manage the funds would set the stage for untoward controversies among the communities and the International Oil Companies (IOCs).
Speaking on Channels Television programme (Politics Today) Tuesday evening, the governor said the IOCs would exploit the loopholes to deny the host communities their entitlements as prescribed by the Act.
Wike said by the Act, the IOCs have the powers to define who gets what and also administer the funds to those they were willing to identify.
“The 3 percent will be paid directly to the host communities to manage. Besides, the government and the operators (IOCs) will identify the host communities. Now, who defines who a host community is? The operator. How can a businessman define who his host community is? I believe that is wrong.
“This could pose a problem because I have seen IOCs deliberately put the heads of two communities together to create crises in order not to meet its Memorandum of Understanding (MoU) signed with the communities and turned up to argue that because the communities are at loggerheads they can’t do what they signed in the MoU with the community.
“Even in terms of managing this fund, it will create a problem knowing the acts of these IOCs. They will sponsor factions in the community to make sure they don’t pay 3 percent to the community; make some go to court for all sorts of frivolities and turn round to say ‘we have court injunction not to release the money’. As a council chairman and now state governor, I know the antecedents of the IOCs in this regard.
“In fact, in some cases the IOCs have sponsored chieftaincy tussles in order not to carry out their responsibilities to the communities. I was thinking that the government would have a hand in order to monitor the spending of such funds,” he said.
The governor further said “paying the money directly to any host community and leaving it alone to manage the fund will cause a lot of crises. There should be something to checkmate the communities. A provision for a board to monitor the disbursement of the fund would have been adequate.”
He further said the president ought to have consulted widely before assenting to the bill, saying such consultation would have enabled him identify the loopholes as well as address the inadequacy of the 3 percent provided.
“The House of Representatives passed 5 percent and the Senate 3 percent. I thought the president should have seen that the amount is not enough to tackle the issue of environmental pollution. How do you reconcile this, you are giving the host communities 3 percent and giving frontier states 30 percent for the exploration of crude oil?
“You have explored and got oil in an environment and in doing that they have environmental crises and you make provision for 3 percent to the host communities and then you allocate 30 percent from the purse of the NNPC to the frontier states to go explore for oil, how do you balance it?” the governor queried.
He said a careful consideration of the plight of the people of Niger Delta could have engendered a statesmanship in him, and not playing politics with such sensitive issue.
