NIGERIA has reportedly lost $10 billion (about N1.7 trillion) to fresh investments that could have come into the country if the Petroleum Industry Bill (PIB) that has been stuck in the National Assembly for nine years had been passed into law.
The chairman of Petroleum Technology Association of Nigeria, Mr. Bank Anthony Okoroafor, made the disclosure at a recent Offshore Technology Conference (OTC) in Houston, Texas, United States.
Recounting Nigeria’s losses to the non-passage of the PIB, which is designed to promote greater accountability, local content and investments in the petroleum sector, Okoroafor lamented that the country missed a huge opportunity by not passing the bill when oil price was high in the international market. Today, oil prices have reached a record low, thereby drastically reducing revenue accruals from the oil sector.
He argued that had the National Assembly passed the PIB when oil price was above $100 per barrel, a lot of companies would have sealed more than $10 billion investment deals in Nigeria. The delay in the passage of the bill, he said, portrays Nigeria as a nation with a confused system that has no discernible direction. The tardiness in our handling of the bill is a drawback to the oil sector. It is a disincentive to the investments that could have come into the sector if the implementation of its provisions had commenced.
It has, therefore, become imperative that the grey areas that are delaying the passage of the bill are resolved, so that it can be passed into law and the implementation of its provisions can commence in earnest. The losses that Nigeria has suffered over the non-passage of the bill should be a wakeup call to the National Assembly to put national interest above all other considerations. It is good that the bill has been re-submitted to the current National Assembly. Proper debate of its provisions should commence.
Vice President, Prof. Yemi Osinbajo, had last year assured Nigerians that the Federal Government would re-submit the bill to parliament before the end of the First Quarter of this year as part of its efforts to restructure the oil and gas sector.
In addition to the $10bn loss in fresh deals, statistics show that Nigeria is already losing over $15bn annually to the non-passage of the proposed law.
According to the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC) and Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, Nigeria lost $125bn between 2009 and 2014 as a result of the delay in passing the bill.
We believe that this is the time for our legislators to take a fresh look at this bill, set aside party and regional differences and pass it into law. The passage of the bill will aid the reform of the oil and gas sector. Its many benefits should not be sacrificed at the altar of personal or regional interests.
The executive bill, as represented to the National Assembly, is broken up into critical aspects for a faster passage. Section 1 of the bill provides for enhanced exploration and exploitation of petroleum resources in Nigeria for the benefit of Nigerians. It also calls for local content, which includes giving priority to qualified local companies in the award of contracts in the oil and gas sector.
However, one of the contentious provisions of the bill which has stalled the debate on it is the provision for the remission of 10 percent profit of oil producing companies to the oil producing communities through the Petroleum Host Communities Fund. Besides, the PIB provides that a petroleum prospecting licence and mining lease may only be granted to a firm incorporated in Nigeria under the Companies and Allied Matters Act (CAMA). This provision is a deliberate effort to give qualified Nigerians some leverage in the sector. We unreservedly support this provision as it will boost the economy.
We are also in support of Section 287 of the bill, which stipulates guidelines and regulations that the Minister of Petroleum may make in consultation with the Inspectorate Division of NNPC in prescribing defined targets for indigenous petroleum reserves and production personnel content. Again, this aspect of the bill will, when implemented, ensure a progressive update of the parameters for indigenous participation in line with international best practices in the oil sector.
Altogether, our lawmakers should close ranks and speed up the debate on the bill and its eventual passage. The current North/South dichotomy that has stalled its passage should end forthwith.
It is over three years now since the bill was debated in the Senate. The debate was then suspended indefinitely due to the intense disagreement along ethnic lines on it.
Nigeria’s huge losses to the delayed passage of this bill call for a sincere and patriotic revisit of the document. The National Assembly should strive to retain the beneficial aspects of the bill and swiftly pass it to aid the promised reform of the oil sector.