Discontent in Petroleum Industry Bill

The restlessness that has greeted the passage of the much-talked about Petroleum Industry Bill (PIB) by the National Assembly (NASS), the other day, has clearly counteracted the desired goodwill that the proposed law should ordinarily command. The bill ought to represent a good starting point in the effort to re-position the oil and gas industry but it does seem that the legislature has bungled such an important assignment after several years of undertaking it.

On the one hand, it is fulfilling that the bill’s passage has brought a close to about 20 years of heated debate over its provisions; it is unfortunate on the other hand that the action has only resulted into a heated controversy, signposting either that the lawmakers did not do a thorough job in tune with the yearnings of the people and stakeholders; or it only worked to satisfy the personal or sectional cravings of the National Assembly members. The NASS should have taken steps to ensure that the bill does not create more problems than it was meant to solve. What is worth doing is what doing well. The NASS has a duty to pass a bill that would address the injustice and sleaze in the oil and gas industry in Nigeria.

The Petroleum Industry Bill (‘PIB’ or ‘the Bill’) was passed by the National Assembly on Thursday, July 1, 2021. It has been in the works since the early 2000s, and will become law once the President assents to it. Enactment of PIB is seen as Nigeria’s boldest attempt at revamping the fortune of the Nigerian Petroleum sector. The PIB either repeals or amends at least 10 different legislations applicable to the Petroleum Industry. This ‘substantially enacted legislation’ is expected to bolster the government’s revenue and create significant investment opportunities for local and international investors.

But activists drawn from civil society organizations, as well as host communities have condemned the bill for failing to address critical issues in the oil and gas sector, especially as they concern oil-bearing communities. They described it as “obnoxious and vexatious,” insisting that it failed to address community, economic and environmental concerns.

As it were, some of the criticisms are not misplaced as, given the crisis of a warped polity, the bill fails to reflect the desire for fiscal federalism where regions can control their resources and the country can grow. In view of the uproar still bedeviling the harmonization by both arms of the National Assembly, lawmakers should realise that they have not finished work until all disagreements and differences arising from it are fully resolved. For the aggrieved parties, mostly from the oil-producing Niger Delta communities, this is the time to pursue their grievances steadfastly and diplomatically before the president assents to it, so as to prevent being presented with a fait accompli.

The bill contains 319 clauses; the overriding issues that have raised opprobrium seem to be the percentage allocations made to various stakeholders. For instance, whereas, the Senate approved 3 per cent equity share of profits accruing from oil and gas operations by the Nigeria National Petroleum Corporation (NNPC) to the host communities, the House of Representatives granted 5 per cent. This contrasts with the 10 percent demanded by the host communities in the original PIB. The Senate Committee had proposed 5 per cent that was rejected. Over and above that, the Senate granted 30 per cent of the same profits for exploration of oil in what it calls “frontier basins.” The Niger Delta communities feel short-changed in the new bill. Pundits say it amounts to robbing Peter to pay Paul.

The bill also threw up other controversial issues. For instance, the definition of host communities is contentious; as “host communities” are no more restricted to the oil-producing areas alone but includes communities where pipelines pass through. Under the bill, non-oil producing states that have pipelines passing through them will now be beneficiaries of the percentage allocation for that purpose. That automatically grants some northern states the status of oil-producers.

More than that, the bill includes transforming the NNPC into a profit-oriented company devoid of political interferences. Whatever would make the NNPC to be efficient and profitable is welcome but given the sleaze that defines the company, would it not have been better to privatise the behemoth, as government-run organisations hardly make profit?

The granting of humongous 30 percent to imaginary frontier basins that are mostly in the north is blatantly unjustifiable. If that is not cheating, then the meagre 10 per cent demanded by the oil-producing communities in the Niger Delta should be granted for peace to reign in view of the crass underdevelopment and degradation of the region and its livelihood system by oil pollution. Expectedly, the Pan Niger Delta Forum (PANDEF) and the host communities have rejected the 3/5 per cent equity shareholding and have called for its reversal. The public perception is that the 30 per cent is skewed to favour the north.

Besides, that such a huge percentage is made for oil prospecting when the rest of the world is moving away from oil is astounding and myopic. Why did the Senate choose to ignore the emerging trend worldwide that has to do with a future without oil? Why did the bill not make provision for finding alternatives to oil?

The bill passage is the second time in two decades. The first was under the Obasanjo administration that refused to assent to it. If the provisions are satisfactory and assented to by President Buhari, the bill is expected to drive investment into the nation’s oil sector. It needs to be stressed that the bill is not an end in itself but a means to a desired end.