‘PIGB will lead to transparency, accountability in oil sector’
The Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu, has said the Petroleum Industry Governance Bill (PIGB), would ensure accountability and transparency in the oil and gas sector.
Speaking at this year’s Association of Energy Correspondents of Nigeria (NAEC) conference, he said the sector generates more than 80 per cent of the nations’ foreign exchange revenues, therefore the need to ensure that the Federal Government and investors got accurate returns on investment.
The Minister, represented by the Deputy Director, Engineering Standard Division, Department of Petroleum Resources (DPR), Olumide Adeleke, said the issue of accountability is at the heart of the oil and gas sector laws. “Moreover in a democratic system, the concept of transparency is atomically anchored by the three arms of government,” he added.
Addressing the theme of the conference, “Petroleum Industry Governance Bill (PIGB): Prospects and Challenges to Nigeria Oil and Gas Industry,” Kachikwu noted that the passage of the bill at the upper legislative house, is in line with transparency and efficiency, key focus areas of his administration’s 7bigwins initiatives.
He described the 7bigwins as roadmap of short and medium term priorities, aimed at developing a stable and enabling oil and gas investments landscape.According to him, the passage portrays plans to create the governing institution with clear and separate roles as well as establish frameworks for the creation of commercially viable petroleum entities that will eliminate bureaucracy and bottlenecks, which discourage investors.
The Group Managing Director, Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru, asserted that the PIGB seeks to create an avenue for better investment opportunitie,s and make the petroleum sector more transparent as well as ensure better accountability of revenue derived from the nation’s vast oil and gas resources.
He argued that cost recovery is a major prospect of the bill especially for NNPC to recover its cost of operations before crediting the Federation Account against the current situation where revenues flow first into the Federation Account and then budgeted for NNPC.
Baru, who was represented by the Managing Director, Netco, an NNPC subsidiary, Sidi Aliu, observed that regardless of all the positives, stakeholders should address clarity where possible to ensure that what is signed into law accomplishes the main objectives of reforming the industry for the collective good.
“The PIGB largely reflects the aspirations of the industry for the emplacement of an effective policy, commercial, and regulatory frameworks that promotes growth and efficient operation,” he said.
A former Interior Minister, Emmanuel Iheanacho, during the panel session on the theme, “optimising local refining capacities in Nigeria: opportunities and challenges,” remarked that modular refineries are the way forward because they can easily be scaled up or down.
Citing funding as the major hindrance against local refining, Iheanacho regretted that Nigerian banks don’t have confidence and believe in Nigerian companies, which he said is the reason only two out of the 40 licensed by DPR are in operation. The former minister tasked government to make the international oil companies (IOCs) to show interest in local refining instead of importing and selling petroleum products.
On his part, the Director General, Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf, argued that the policy environment in the downstream sector is not investment friendly, hence proposals are dead on arrival when investors are hindered in pricing their products.
The current policy environment cannot help optimisation, he said, hence the need for a review in order to attract investments into the sector.“We need to take conscious effort to decouple the downstream sector from bureaucracy and political apparatus, for as far as that sector is linked to government, we cannot make any headway,” Yusuf added.