Energy Briefs
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THE Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, has said the Petroleum Industry Bill in the National Assembly may suffer the same fate that befell it during the last two consecutive legislative tenures.
Chika Onuegbu, chairman, PENGASSAN, PIB Committee and immediate past chairman, Trade Union Congress of Nigeria, Rivers State, stated this in a presentation at a workshop organised by the association’s Kaduna Zone in Minna, Niger State.
Onuegbu said that for 16 years the country had been dithering on the reforms in the critical oil and gas sector. “For some eight years, the PIB has been in the National Assembly, while the future of the Nigerian economy and the oil and gas sector hung in the balance.
“Indeed, there has been discomforting signals from the National Assembly and the Executive arm on the new PIB which seem to indicate that if nothing drastic is done, the PIB may not be passed by the eighth National Assembly.”
He said the association hoped that the current National Assembly and the Executive arm led by President Muhammadu Buhari would pass the PIB, not just the first part but all the parts before the end of December 2017. According to Onuegbu, the first part, which is entitled, ‘Petroleum Industry Governance and Institutional Framework Bill,’ PIGIF, aims to create commercially oriented and profit-driven petroleum entities.
He noted that the PIGIF passed first reading on the floor of the Senate on April 13, 2016 before it suffered setbacks. “As an instrument intended to bring direction to the hydrocarbon sector, the PIB represents a great opportunity for Nigeria to ensure a solid legislative foundation on which the future of oil and gas operations in the country will rest.”
Onuegbu said PENGASSAN had recommended the adoption of the Nigerian LNG model for running the government-owned refineries and to encourage private sector participation in the refining and downstream sector.
On host community issues, he said, “We strongly support the establishment of the Petroleum Host Community Fund, PHCF, to provide socio-economic infrastructure in the host communities but from which such communities cannot draw if there is sabotage of petroleum facilities in their domain.
“We, however, believe that the PHCF should include not just oil-producing communities but all communities hosting oil and gas resources and assets including downstream infrastructure since the entire value chain of the oil and gas industry has peculiar health, safety, environmental and community-related problems.”
He said a mechanism could be developed to determine each asset’s criticality, with the producing communities being the most critical. “Unfortunately, the two versions of the PIGIF 2016 we have seen have no provision for PHCF,” Onuegbu said.
He said the present arrangement where the Group Managing Director of the Nigerian National Petroleum Corporation could be appointed or removed from office via radio announcement should be discontinued in the PIB. “The present arrangement where the board of the national oil company is chaired by the Minister of Petroleum Resources should similarly be discontinued as it essentially subjects the operations of the company to the murky waters of the Nigerian politics and this is not proper if the national oil company will run as a profitable and transparent company.”
He said it had been reported that the non-passage of the PIB had stalled some $80billion worth of investments in the Nigerian oil and gas sector as investors adopted a wait-and-see attitude. Onuegbu said: “Obviously, we expect that the passage of the PIB will unlock new investments in the Nigerian petroleum industry as investors will be willing to invest in the sector since they will then know the terms and conditions for such investments.
— Aug 29, 2016 @ 01:00 GMT
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