The nation’s oil sector will be subjected to a higher level of instability owing to the continued delay in the passage of the Petroleum Industry Bill by the National Assembly, a new report has said.
The report was developed by the Petroleum and Natural Gas Senior Staff Association of Nigeria on the state of the petroleum industry and the association’s expectations from the new government, a copy of which was obtained by our correspondent on Friday.
The delay in passing the bill, according to the report, will aggravate the anxiety within host communities of oil companies waiting to benefit from the PIB’s provision of 10 per cent Host Community Fund and accept accountability for sabotage of oil installations in their areas.
The irregular funding of Joint Venture budget and the non-payment of cash call obligations in the face of the dwindling oil revenue, it stated, were likely to continue, thereby prolonging the era of economic volatility.
It will be recalled that on June 4 this year, the House of Representatives eventually passed the PIB along with a number of other pending bills. But the bill did not receive the approval of the Senate before it wound down its activities.
The bill, when passed into law, is expected to clarify the rules and procedures that will entrench good governance, transparency and accountability in the oil and gas sector as well the operational and fiscal terms that will enable Nigeria to competitively retain equitable proportion of revenue accruing from oil and gas industry operations.
PENGASSAN noted in the report that the country had not succeeded in integrating under one law the fiscal policies, instruments and institutions governing the oil industry.
It also stated that the industry’s legal/regulatory framework, which had been regularly subjected to ministerial discretion and fiat, would likely continue, notwithstanding that the development had significantly caused the suspension and diversion of several investment projects to other African countries.
According to the report, existing and prospective investors seriously yearn for basic incentives to stimulate their business interests across the industry’s value chain, and the delay in the PIB passage is, however, restraining the aspiration.
The report said, “There is the need for an all-inclusive stakeholders’ summit involving industry operators/players; representatives of the Presidency; National Assembly; security and service chiefs; state governments; ministries, departments and agencies of the government; the Nigerian National Petroleum Corporation; the Nigerian Extractive Industry Transparency Initiative; revenue offices; Nigeria Labour Congress/Trade Union Congress; the Nigeria Union of Petroleum and Natural Gas Workers/PENGASSAN, among others.
“The summit should be aimed at harmonising the grey areas in the bill and ensuring its accelerated passage in a fair and equitable manner. While the PIB is being attended to, government must resolve the foggy issues in fiscal stability and predictability of the extant laws and the regulatory framework; uncertainty around the portfolio assets leasing to allow the operators the first right of renewal; and pending cash call on the JV operation expenditure and improved funding of capital projects.”
Few members of the House of Representatives had passed the controversial PIB in a race to beat the expiration of the tenure of the seventh National Assembly.
Only 47 out of the 360 members of the House remained in the chamber at the time the session, which was presided over by the then Deputy Speaker, Mr. Emeka Ihedioha, considered and passed the bill.
However, the passage of the bill was of no effect as it did not receive the mandatory concurrence from the Senate.
The seventh Senate, which formally rounded off its tenure recently, had abandoned the PIB at the committee stage, a development which rendered the bill passage by the House an “effort in futility.”
By legislative proceedings, a bill is considered passed only when the passage is done by both chambers of the National Assembly.
The failure of the Senate to pass the bill had transferred its fate to the just inaugurated eighth National Assembly.