Saturday, 23rd September 2023

Criticism trails PIA implementation, OPL 245 as Osinbajo advocates energy security

By Kingsley Jeremiah and Terhemba Daka, Abuja
19 April 2023   |   6:20 am
International and indigenous operators, yesterday, decried poor implementation of the Petroleum Industry Act (PIA), insisting overlapping regulations in the Act remain a disincentive.

Executive Secretary, Nigerian Content Development and Monitoring Board (NCDMB), Kesiye Wabote (left); Vice President Yemi Osinbajo; Permanent Secretary, Ministry of Petroleum Resources, Gabriel Aduda and NCDMB Manager, Corporate Communications, Esueme Dan–Kikile during the Nigeria International Energy Summit at the International Conference Centre in Abuja…yesterday. PHOTO: PHILIP OJISUA

NUPRC, NMDPRA to recommend PIA amendments for incoming govt

International and indigenous operators, yesterday, decried poor implementation of the Petroleum Industry Act (PIA), insisting overlapping regulations in the Act remain a disincentive.

This is coming as Minister of Justice and Attorney General of the Federation, Abubakar Malami, asked the Federal Government to close the controversial Oil Prospecting License (OPL) 245, which has been marred by fraud.

Also, Vice President Yemi Osinbajo noted that the country must take advantage of its rich energy resources to deliver energy security, amid growing poverty and widening energy deficit.

For most stakeholders gathered at the Nigeria International Energy Summit in Abuja, sincerity on the part of government is still lacking in addressing existing challenges facing the energy sector.

The experts, who noted the need to raise over $100 billion, yearly, to meet current energy deficit, said operating environment and regulatory stability remain critical challenges in Nigeria.

They decried suspension of full implementation of the PIA to accommodate fuel subsidy, saying government must desist from controlling prices to bolster the sector.

Osinbajo said Nigeria has a crucial role to play in the transition to a more sustainable energy future for the continent and the rest of the world, even as Africa would need rapid industrialisation to get millions of its people out of poverty.

On the theme, Global Perspectives for a Sustainable Future, the Vice President underscored significance of the theme for the socio-economic future of Nigeria, Africa and the world.

Drawing lessons from the work done in the last couple of years by the Federal Government’s Energy Transition working group, which he chairs, Osinbajo said: “In that capacity, and working with a strong inter-ministerial team and several energy sector players, it has become increasingly clear to me that Nigeria has a crucial and strategic role in delivering the sustainable energy future that Africa and indeed the world must have in the next few years. The truth is, no other sector of our economy is as crucial in the transition to a more sustainable future.”

The Vice President, who restated his view on Africa becoming the first truly green civilisation in the world, noted: “The future is not in Africa as a victim; it is in our nation and our continent driving the next stage of global economic progress by becoming the first truly green civilisation in the world.”

Continuing, he stated: “The truth is, no other sector of our economy is as crucial in the transition to a more sustainable future. But what is that future? Let me say, first, what it is not. It is not a future with Africa at the bottom of the food chain in the brave new world of sustainable energy.

“But we must admit that, today, we have the largest number of individuals without access to power, the largest number without access to clean cooking options; we need rapid industrialisation to get millions of our people out of poverty, and we must do all without worsening global warming.”

THE PIA 2021 signed into law in August, last year, is one of the most audacious attempts to overhaul the petroleum sector. If implemented diligently, it can facilitate the country’s economic rejuvenation by attracting and creating investment opportunities for local and international investors.

Conversely, since its passage, President Muhammadu Buhari, managers and handlers of the Nigerian National Petroleum Company (NNPC), Nigerian Upstream Petroleum Regulatory Commission (NUPRC), and the Nigerian Midstream Downstream Petroleum Regulatory Authority (NMDPRA) have been involved in a game of wits.

In the face of mounting inefficiency in the industry, a chain of recent events, among which are oil bunkering and theft, have also seen the nation’s crude oil production heading towards its record lowest of 675 barrels per day recorded sometime in February 1983.

The Guardian had earlier reported that the NMDPRA and NUPRC were at loggerheads on overlapping roles, a development, which is creating more pains for operators amid other government-induced harsh business practices.

Stakeholders at the conference re-echoed the challenges, insisting that loopholes persist in regulations. Most operators, it was learnt, are now being compelled to get double permits, due to the dual regulatory system, as most departments across the two agencies are reportedly unsettled due to promotional issues, which The Guardian gathered places tribalism and ethnicity above competency.

Ordinarily, the upstream segment of the sector should deal with exploration, production, and evaluation. But the area of contention for the two regulators has been evacuation.

This is because oil theft has forced some operators, especially smaller entities, to resort to barges and trucks in evacuation of crude oil, even as vandalism threatens to bring the sector to its knees. The NMDPRA is allegedly claiming it must oversee the process, even though the activities are happening upstream.

Chief Executive of NUPRC, Gbenga Komolafe, and his NMDPRA counterpart, Farouk Umar, both admitted there were loopholes in the PIA but added that the issue is being fine-tuned. Komolafe said the new government would provide status updates on grey areas in the PIA.

Meanwhile, Malami insisted the country might not win the controversial case of the OPL 245 oil block. In a letter, Malami had reportedly told President Muhammadu Buhari, that terminating the case was best, citing the need to unlock economic benefits of the oil block.

OPL 245 is believed to be Nigeria’s most endowed block but has been mired in obscurity over corruption allegations.

The block was originally awarded to Malabu Oil and Gas Ltd, a company owned by a former oil minister, Dan Etete, during the regime of Sani Abacha in 1998.