israel Aye, senior partner, Primera Africa Legal and oil and gas expert, speaks with Anayo Ezugwu, staff writer, Realnews at the end of a one-day dialogue on Petroleum Industry Governance Bill, PIGB, organised by Facility for Oil Sector Transparency, FOSTER, in collaboration with the Centre for Financial Journalism, CFJ, on the crisis in the industry due to non passage of PIB. Excerpts.

Realnews: Can you explain what you mean by saying that the Petroleum Industry Governance Bill, PIGB, which was passed recently has missed opportunities?

Aye: What I meant by missed opportunity is the failure to set-up statutorily a back office for the minister because some of us believe that the minister is the head of policy making. But in order to have a robust policy that continues from time to time, you need a professionalised body behind the minister. But politics did not allow them to make that provision.

Realnews: Can you elaborate on the crisis in the oil and gas sector as you see it?

Aye: There is crisis because we don’t have enough investment coming into the sector. There is a sense of fear, first by potential investors in Nigeria but also by those who make regulations because a lot of persons in the regulation are not sure if they should approve projects based on existing law which could change later. I will give you an example, the Associated Gas Fiscal Act, which allows a producer to write-off their gas investment against the oil operations, is still the law but as at today, it is tough to get any approval on the basis of that law because the proposed law intends to take it away. What we then have is not enough investment flowing into the industry with the result that for the first time in a long while our reserves have declined.

Realnews: To what? Do you have the statistics?

Aye: Unfortunately I don’t have the exact numbers.

Realnews: Can you explain more on why you said the PIGB is what we need now?

Aye: I’m not sure I actually said that is what we need but the view is that since is the one that has been passed let it be the one that opens the way for others to be passed.

Realnews: You have been a keen observer in the oil and gas sector for the past 17 years that we have tried to pass this PIB. Can you tell us about the current state of the industry in Nigeria?

Aye: It is a fact that in terms of new investments, we haven’t had that many if at all. As a matter of fact, the additional investments we had are from the existing players. Significant as it may be, but we need to have more of inflow of investments. Remember the data I shared with you that the first power plant in Nigeria was established 15 years after the one in UK. Now what stalled our own is that we didn’t have fresh investment. It shows that whatever that stops to grows starts to die. That is essentially what we are talking about that it is not growing as it should because of the prevailing atmosphere of uncertainty that have been imposed by the non-passage of Petroleum Industry Bill, PIB.

Realnews: If the non-passage of the PIB over the years have weakened Nigeria’s position vis-à-vis its counterpart in Angola or Algeria, How comptetitive will Nigeria be when eventually this PIB is passed?

Aye: That is an excellent question. We would make that argument perhaps that the PIGB as it is called, is necessary but not sufficient condition to move the industry forward. It is only the first of four bills that need to be in place for it to move forward. Secondly, the question is even if you pass all four today, how soon are we going to see the effect? The petroleum industry is like a ship. When you turn it, it doesn’t turn immediately. It takes a while for it to respond. So in the same way that catastrophe that may result from bad decisions would take years to manifest, similarly, good result don’t follow good decisions immediately.

These things tend to be long term. So every time you lose can have multiplier effect; it may or may not have an immediate effect in terms of the impact but it will ultimately produce the result.

Realnews: Won’t having one regulatory body result in a situation we are facing with NNPC now?

Aye: Well, the NNPC was not intended to be a regulator. It was supposed to be the national oil company. But the question is not whether we have one or two regulatory bodies or multiple regulators but whether we have the regulatory capacity within whatever entity you choose. I have suspicion about multiple regulations because people can say that one is for the upstream and another for the downstream, but listen it still one industry with overlaping functions. By the time you have them in separate regulatory agencies, and then we can begin to have problems. But if you have them under one leadership where there are overlaps and touch points things can easily be resolved in the interest of the industry.

Realnews: Is there any other information about the PIGB or the PIB that you will like to give us?

Aye: We should continue to sensitise Nigerians that this has to do with all of us. That it is not for Shell, Chevron, Exxon or whoever, that the petroleum industry is our collective heritage at this moment as a people. It is not only Niger Delta. Even for my brothers and sisters in the Niger Delta, I also like to say that we should be concerned about the survival of this industry before we even argue about what you get out of it.

– July 6, 2018 @ 18:35 GMT |