Assurances by Senate President, David Mark, on the resolve of the nation’s parliament to work towards the passing of the lingering Petroleum Industry Bill (PIB) is a very welcome development, coming against the background of spirited opposition by interest groups who have contrived to block the passage of a well thought-out policy that is meant to boost the revenue base of the country and better the lot of Nigerians.
At the resumption of plenary by the Senate, recently, Mark had assured that the National Assembly will expedite the passage of the 2015 budget proposal as well as the Petroleum Industry Bill, PIB as it winds down in its final days of sitting.
“I would like to assure Nigerians that the National Assembly will work hard to ensure that the 2015 Appropriation Bill is passed in good time. As we resume this last lap of the 7th Senate, we shall endeavour to pass the lingering Petroleum Industry Bill. We are conscious of the concerns of various stakeholders (Nigerians and foreigners). It has taken long but we should do all we can to pass it,” Mark had said.
The idea of the PIB began in 2007 following recommendations of a Presidential Committee set up to carry out oil and gas sector reforms in Nigeria. The reforms were expected to form the nucleus of Nigeria’s aspiration to become one of the most industrialized nations in the world by the year 2020.
For the country to realize this tall dream, it was envisaged that the major source of revenue to the Federation account, which remains the oil and gas sector, must be re-positioned through the PIB for greater efficiency, openness, and competition built on good corporate governance as obtained in other resource-rich nations.
Against this backdrop, therefore, the proposed PIB was designed to strengthen the capacity of indigenous Nigerian companies in the oil and gas sector to compete with international oil companies in the search for and acquisition of hydrocarbons in Nigeria. The measure was also intended to reduce exploitation in the sector and limit, to the barest minimum, Federal Government’s exposure to oil and gas exploration and production through joint venture operations.
So far, the controversial Petroleum Industry Bill has undergone several incarnations in the Nigerian legislature and is ready for a second attempt at being passed into law.
The original draft PIB faltered amid confusions surrounding the various versions used around the legislature and the political squabbling between stakeholders. As a result, Nigeria experienced a period of stagnation in investment in the oil and gas industry which increased calls for an overhaul of the system.
This culminated in a committee set up early in 2012 to propose a new draft bill with the aim of providing a fairer deal for the country while simultaneously accommodating the interests.
The new modified draft PIB was forwarded by President Goodluck Jonathan to the Nigerian National Assembly in July 2014 with the President requesting that lawmakers give the bill an expeditious passage.
There exists oppositions to the bill from different groups, especially from the ranks of the International Oil Companies, OICs, who are openly against the proposed reform especially as it concerns the rate of tax payable by them on production. Under the new PIB, the Nigerian government can expect to reap 73 per cent from deep-water production, up from 61 per cent under the present legislation.
Also the IOCs argue that Nigeria’s fiscal terms should be more attractive than in other jurisdictions to combat specific concerns including the risks of operating in the oil and gas business in Nigeria, notably piracy, kidnapping, large-scale oil theft and corruption.
While the PIB faces the OICs’ hurdle in one front, there is also the political challenge posed by in-fighting between stakeholders from the North and South of the country over the method of allocation of oil and gas revenue. This has remained another stumbling block for the PIB.
A committee set up governors of the Northern states further claimed that the current PIB would not only increase the derivation fund from the Federation Account allocated to the oil-producing southern states, but would also see 10 per cent of IOCs’ profits go to these states without similar provision being made for the North.
This, activists from the North claim , is unacceptable enrichment of one area at a time when the country should be pooling resources for the benefit of all Nigerians.
The PIB, indeed would do the Nigerian economy in particular, and Nigerians in general, a lot of good if passed into law as quickly as possible. The National Assembly should, therefore, rise above personal, partisan and other parochial interests to pass the bill into law for the good of the entire nation.
The Federal legislators must, therefore, endeavour to write their names in gold by passing this crucial bill, which all parties agree will enhance the revenue base of the nation and strategically empower the Nigerian masses as well as indigenous players in the oil and gas sector of the Nigerian economy.