From Ndubuisi Orji, Abuja
The House of Representatives is in a race against time in its quest to reform the oil and gas sector, which is the mainstay of the country’s economy. The reform is one or the key legislative priority of the ninth House.
The Green chamber is seeking to actualise the reform of the oil industry through the passage of the much talked about Petroleum Industry Bill ( PIB). The PIB, which was first introduced in the National Assembly in 2007, has been bogged down by unnecessary politics. Although the eight assembly had succeeded in passing only the governance component of the bill in December 2018 and sending same to President Muhammadu Buhari for his assent, he withheld it citing several reasons.
Subsequent efforts by the House to push through the bill after rescinding the contentious clauses in line with concerns raised by President Buhari, was unsuccessful as the Senate could not concur before the eight assembly elapsed.
However, the Green Chamber, in its reversed Legislative Agenda, has identified the passage of the PIB as one of the key economic legislative interventions it will pursue between June 2020 and May 2021.
According to the Legislative Agenda, the ninth House will “ ensure the passage of the PIB to improve efficiency, reduce wastage and limit corruption in the petroleum sector.”
Analysts say the country has lost trillions of Naira in the last twelve years, as a result of the non-passage of the PIB. This is especially in the area of revenue from existing ventures and fresh investments in the oil and gas sector.
Pundits say the absence of a new legal framework for the oil and gas sector, has made fresh investors unwilling to invest in the sector, as they are unsure of what happens to their investments.
The speaker, Femi Gbajabiamila, said there is a national consensus that there should be a comprehensive reform of the oil and gas industry, as it is currently not performing optimally. Pundits argue that the absence of a new legal framework for the oil and gas sector, has made fresh investors unwilling to invest in the sector, as they are unsure of what happens to their investments.
Gbajabiamila, who spoke at a public hearing, organised by the House Ad-hoc Committee on the PIB recently, added that there is need for the country to derive as much benefits as it can from oil now, before, it becomes too late.
Besides, the speaker noted that the passage of the PIB is critical to the quest of the government to diversify the economy. He noted: “the truth remains that modernising and diversifying our economy away from over-reliance on income from fossil fuels becomes a matter of greater urgency with each passing day.
“The irony, of course, is that to do this, we must first make sure our oil and gas industry is more productive, more efficient and more profitable at a time of declining global profitability. This is a tall order.
“The Petroleum Industry Bill is a necessary first step towards reorganising the sector to respond to the new global reality of decreasing demand and the diminished profitability of fossil fuels. Our assignment here is first to ensure Nigeria’s oil and gas industry operates optimally for the benefit of all Nigerians. Then we must see to it that the industry generates the resources we need to prepare Nigeria for a future when fossil fuels are worth even less than they are now.”
Gbajabiamila added: “for you to diversify your economy, you have to invest money, and for you to invest money, the resources you would use to invest and develop your economy, as it is in Nigeria for now, comes from the petroleum industry.
“Whether you believe in the finite or infiniteness of the product, the point that needs to be made is that we need to derive as much profit for the time when the product is still available. We need to derive as much profit to be able to diversify into other areas.”
In pursuit of this objective, the House has set April 2021 target for the passage of the PIB, which has severally been described as pivotal to the reform of the oil and gas sector of the economy and unlocking the many potentials in the sector.
The chairman of the House Ad-hoc Committee on the PIB, Tahir Monguno had at the inaugural meeting of the committee, last November, regreted that the National Assembly has not been able to pass the bill, which was first introduced in 2007.
Monguno, who is also the Chief Whip of the House, noted that the parliament was conscious of the fact that oil is a wasting asset, and as such would expedite action on the passage of the bill, to enable the country maximize the potentials in the oil industry, before commercial exploration of crude oil ends.
He said: “commercial exploration (of oil) may only last for another 25 years. It is not to say that we might exhaust the deposit; but that the entire world is focusing on research to develop renewable energy that could turn out to be cheaper and environmentally friendlier.
“That is why it has become expedient, more than ever to leverage on this window of opportunity that the oil exploration presents to us as Nigerians, by ensuring that the Petroleum Industry Bill is passed without further delay.
“In spite of all the effort of the preceding administrations to diversify our mono economy, the oil industry still remains the mainstay of our country. Every time there’s signiﬁcant fluctuations in the price of crude oil, all other sectors of our national lives suffers.”
Monguno expressed optimism that the bill, when passed into law will transform the oil industry and attract Foreign Direct Investments(FDIs)into the country.
“ This bill is long overdue. And because of the fact that oil is a wasting asset, there is need for us to tape from this limited windows of opportunity that we have to maximize the potentials in our oil industry with a view to unlocking them to meet other infrastructure needs.
“All things being equal, we intend to pass this bill before the end of the first quarter of next year. So, we are soliciting for maximum cooperation of the general public, so that at the end of the day, this bill will see the light of the day and it will go a long way in transforming the oil industry and attracting the much needed Foreign Direct Investment to the oil industry,” the lawmaker stated.
Nevertheless, experts say it is not enough for the parliament to pass the PIB, the proposed legislation must be such that it can pass the test of time time. According to an energy specialist, Gbite Adeniji, the minimum expected from the proposed legislation is “”a stronger, well-structured, more accountable and independent sector regulator, a commercially focused and accountable National Oil Company insulated from the political system.”
Adeniji, who spoke at a techincal session on the PIB , organised by the Facility for Oil Sector Transparency (FOSTER) in Abuja, recently, added that the PIB must make”clear provisions for the regulation of the gas sector. Clear provisions to address the policy aspirations for domestic crude oil refining and gas based industrialization”.
However, as laudable as the PIB seems, there are a lot of hurdles the House must scale through if it must achieve its objective of passing the PIB in April. Analysts say the major hurdle would be diverse interests in the oil sector, which has over the years posed obstacles to the passage of the proposed legislation.
Deputy House leader, Peter Akpatason, had told House correspondents in 2019 that the PIB is the most politicised bill in the parliament, since the inception of the present democratic dispensation in 1999.
“PIB has been the most politicised bill in this Assembly, all the way from the 7th Assembly. PIB has been the most politicised project, all the way from the Executive and even right here in the National Assembly because of a lot of contending interests all over the place.
“The multinationals formed its bloc and interest. In politics, we have all our various interests all through. The refining bloc is another; the marketers is another factor, transporters are another big factor.
“A lot of people are benefiting from a dysfunctional oil sector and these people are very powerful and highly influential people. People that can manipulate anything possible in this country.
“That is why you see that even the draft that comes to the National Assembly, you see elements of political twisting and if you try to correct at the level of committees, these interests will come to play,” Akpatason had stated.
Regardless, Gbajabiamila noted that while the House was aware of the many contending factors that had militated against the passage of the PIB in the past, the ninth assembly is committed to the passage of the bill, in the interest of the country.
“We intend to pass this bill by April. That is a commitment we have made. Some may call it a tall order, but we will do it, and we will do it with every sense of responsibility without compromising the thoroughness of the work that will be done.
“We are not oblivious to the fact of many contending interests in this sector. These contentions do not need to result in conflict, especially when we know that the objective of national prosperity benefits us all.
“Regardless of whatever other interests may exist, for this ad-hoc committee and indeed the House of Representatives, Nigeria’s best interest is both our desired outcome and guiding principle. It falls to this ad-hoc committee to engage in a necessary balancing act in the interests of our beloved nation.”
The Ad-hoc Committee, it was gathered, as part of efforts to address all the concerns of stakeholders about the bill, has concluded plans to embark on oversight visits, so as to get the input of the public into the proposed legislation.
The House, no doubt, has shown so much commitment to the reform of the oil sector through the passage of the PIB. However, it is yet to be seen if the the Green chamber will match words with action by scaling all the hurdles and passing the proposed legislation in good time.