The National Assembly has pledged to make extensive adjustments on the various sections of the Petroleum Industry Bill (PIB) to ensure that it comes out as a quality law that would address major concerns of various stakeholders as well as put a stop to the arbitrariness in the award of oil blocks.
This came as the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, equally disclosed that the National Assembly and various relevant stakeholders in the country’s petroleum industry are currently fine-tuning the fiscal regimes in the PIB.
The Deputy Chairman, House Committee on PIB, Hon. Samson Osagie, said at a Special Panel Session organised by the Petroleum Technology Association of Nigeria (PETAN) at the ongoing Offshore Technology Conference (OTC) taking place in Houston,Texas, USA that the bill would be scrutinised and modified to address concerns of investors, particularly in respect of fiscal terms, while at the same time ensuring maximisation of government revenue.
Specifically, Osagie said the lawmakers would work on the aspects of the PIB that have to do with acreage allocation; fiscal regime as it relates to gas; exercise of discretionary powers; local refining and importation of petroleum products as well as address stakeholders concerns on who manages the Host Community Funds.
The lawmaker said in carrying out the scrutiny, the House will ensure that national interest was not compromised, but will come out with a bill that is devoid of high-handedness in the management of Nigeria’s hydrocarbon resources and the favouritism that characterised the allocation of oil leases.
“We want a PIB regime where authorities that are supposed to regulate the system are not compromised. We do not want a PIB where oil acreages are used for political patronage, we want a bill where local participation is increased,” Osagie said.
He expressed dissatisfaction on Nigeria’s overdependence on foreign countries for its refined products, positing that clauses in the PIB that will ensure full operation of Nigerian refineries and put an end to massive importation of refined petroleum products would be given priority attention.
The lawmaker also added that the issue of availability of adequate gas for the domestic market would be given priority, pointing out that any economy that is dependent on generators runs the risk of losing its industrial foothold.
He explained that the bill may not be passed as early as Nigerians want it, because a lot needs to be done to be able to synchronise the various issues around it, pointing out that the last National Assembly could not pass it because various version of the bill were before its domain.
“I will not tell you that this bill will be passed in two weeks. Given the interest that this bill has generated, you will agree with me that a lot needs to be done for us to be able to synchronise the various issues around the PIB. What am very sure right now is that we do not have different versions of the PIB as we had during the sixth National Assembly.
But I can assure you too that what the National Assembly and the executive will do as authors of this bill are quite verse that this bill be passed. And I don’t think there is any reason why it should not be passed, even the industry operators want it passed, because I have asked a few of them. So I want to say definitely that the legislative process is not subject to mathematical position, I cannot tell you that in two months it will be done, we are going for the last public hearing at the House of Representatives in no distance future and there after we shall go into retracting of certain areas we feel need to be reworked and then we will pass it at the of the House and then send it to the Senate for concurrence.”
Speaking in the same vein, the Chairman of the Senate Committee on Petroleum, Upstream, Paulker Izibefien Emmanuel, said the bill would take into consideration all the concerns expressed by the stakeholders, but will definitely not compromise national interest.
On his part, the Country Chair and Managing Directorof ExxonMobil upstream companies in Nigeria, Mark Ward, who spoke on behalf of the Oil Producing Trade Group (OPTS), described the bill as “ambitious, complex, laden with uncertainty and time-consuming in implementation,” noting that it also has extreme complexity with objective to transform the entire oil and gas industry.
The ExxonMobil boss argued that the bill lacked clarity in implementation including lack of transition plan, adding that there are enormous investors’ uncertainties with apparent divergent interest. “Nigeria’s Joint Venture oil fiscal terms are already among the highest in the world, not considering the high risks and cost due to security and bunkering.”
He added: “The PIB outcome is highly uncertain for the industry. It applies to only existing projects and does not preserve contractual basis on which investment were made.”
Also, Ward said ExxonMobil was looking to invest up to $33 billion in Nigeria within the next five years.
He, however, said a chunk of the money would be committed to Independent Power Plants (IPPs) to boost power generation and supply in Nigeria.
Earlier, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mr. Andrew Yakubu, insisted that the oil reform bill would increase participation of new players in the Nigerian oil and gas industry through the proposed new acreage management system involving the release of acreages that have been held without activity due to one constraint or another.
He clarified: “Contrary to some widely held views that dismal regime is the cause of low exploration activity, rather it is exploration activity. The proposed new acreage management system would release new acreage for exploration. Throughout the world, new successful exploration plays are being developed not by the majors but smaller independents. In addition to the proposed competitive fiscal system.”
Meanwhile, in a statement signed by the NNPC yesterday in Abuja, Alison-Madueke, disclosed at the sidelines of the Nigeria and South Africa business forum in Cape Town, South Africa, her confidence in the modified fiscal regime to attract huge investment into the country’s petroleum industry.
“There are a number of incentives packaged in the Petroleum Industry Bill (PIB) and by the time the fiscal regime is worked out by the National Assembly along with every other stakeholder in the oil and gas industry, I am sure Nigeria will become the choice destination for investors in the petroleum industry,’’ Alison Madueke was quoted to have said.
The statement which was signed by the acting General Manager Public Affairs of NNPC, Tumini Green, also explained that the federal government and the Republic of South Africa had signed a Memorandum of Understanding (MoU) in the oil and gas sector to reinforce and strengthen the existing symbiotic relationship between the two largest African economies.
Accordingly, Alison-Madueke noted that the visit and MoU were aimed at boosting the volume of oil and gas trade between Nigeria and South Africa, adding that the interface between the two countries would further develop and deepen their bilateral relations to develop synergies that would impact positively on them and Africa at large.
She said: “The historic visit to South Africa has afforded the Nigerian government the opportunity to sign nine memoranda of understanding in different areas of the economy. Specifically, the MoU on the oil and gas sector is to basically help in the transfer of knowledge, skills, capacities and technology.
Mobil Producing Nigeria Unlimited (MPN), operator of the Nigerian National Petroleum Corporation (NNPC) and MPN Joint Venture, recently signed a Seller’s
Representative Agreement (SRA) for the Qua Iboe Power Project, located at its Qua Iboe terminal in Akwa Ibom State.
The proposed power project includes the construction of a 500megawatt-capacity power plant as well as a 56-kilometre transmission line connecting the plant to the national grid at Ikot Abasi, also in the state.
Ward, had stated that the project was a tangible demonstration of MPN’s commitment to Nigeria and supports the president’s priority of providing electricity to the country.
MPN’s General Manager in charge of Public and Government Affairs, Mr. Paul Arinze, had also in a statement noted that the signing of the SRA was “A critical part of the overall commercial framework that enables MPN to undertake power activities and facilitates the sale of power by MPN to Nigerian Bulk Electricity Trading Plc for itself and on behalf of the NNPC.”
According to Arinze, Front End Engineering Design (FEED) and Environmental Impact Assessments (EIAs) for the project had been concluded, while commercial tenders for Engineering, Procurement and Construction (EPC) were near completion.
Mobil Producing Nigeria awarded the FEED contract for the project in September 2009, while the ground-breaking was performed in March 2010. FEED is the conceptual process of development and design for large industrial projects such as power plants. The Power Plant will provide 330kV export power to the national grid.