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PIB: FG pacifies North with N16bn Frontier Basin Exploration Agency

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As part of the truce deal aimed at getting the North to support the new Petroleum Industry Bill (PIB), the Federal Government has given the nod to set up a National Frontier Basin Exploration Agency. Establishment of the Agency would cost the Federal Government a princely N16 billion. Allocation for the yet-to-be established Agency was already captured in the 2013 Appropriation Act signed by President Goodluck Jonathan in February.

Chairman of the Federal Capital Territory (FCT) Committee, Smart Adeyemi is the sole sponsor of the National Frontier Basin Exploration Agency (Est. et cetera) Bill, 2013 in the Senate. The bill scaled the First Reading in the Senate yesterday, a day lawmakers resumed from the Easter recess. A similar bill, it was gathered, was already in the House of Representatives. When it comes into operation, the Agency would execute, promote and oversee exploration activities in the inland sedimentary basins in Nigeria.

Daily Sun had exclusively reported that in a move designed to secure the economic future of the region, the North now wanted President Goodluck Jonathan administration to commence serious work in hydrocarbon exploration and gas-oriented projects in the North. The region’s demand was contained in a position paper prepared by external consultants commissioned to study the PIB as it affects the North. The late Yar’Adua administration, they contended, had incorporated these in the version of the PIB he forwarded to the National Assembly in 2008.

A part of the abridged commentary on the commissioned report reads: “The new institutional structure being proposed for the country’s oil and gas industry does not create a framework for any serious or effective exploration for hydrocarbons in the frontier acreages of the country’s six sedimentary basins, four of which are in the northern section of the nation. “The New Petroleum Technical Bureau to be located in the office of the Minister of Petroleum Resources, which takes over the responsibilities of NNPC’s Frontier Exploration Services cannot really be a substitute for the National Frontier Exploration Services (NFES) that was earlier proposed in the version of the bill sent to the National Assembly by the late President Umaru Musa Yar’Adua.”

On another flank, the region is worried about the seeming inability of “the management of the petroleum industry in Nigeria to prioritise gas supply to the north.” To resolve the problem, since “the Ajaokuta-Kano gas pipeline has consistently remained in the back burner of all gas utilization plans in the country,” the only way to ensure gas supply to the north “over more export-oriented gas projects by operators in the industry is (to) ensure that the terms of Domestic Supply Obligations and Pricing Regulations signed by the late President Umaru Yar’Adua administration are incorporated in the new petroleum industry legislation.”

As proposed in the new law which would establish the Frontier Basin Exploration Agency, as contained in No. 06 of the April 8, 2013 edition of the National Assembly Journal, the Agency shall regulate petroleum exploration activities in all unassigned frontier acreages in Nigeria held by the Directorate; it would also identify opportunities and increase information about the petroleum resource base within al, frontier acreages in Nigeria, in a cost-effective manner and with demonstrable, technical and operational excellence.

Similarly it is expected to develop exploration strategies and portfolio management for the exploration of the unassigned frontier; promote and stimulate the interest of petroleum exploration and production companies in all unassigned exploration acreages in Nigeria. The Petroleum Resources Minister has the prerogative to determine any of the basins in Nigeria that the Agency would conduct its exploration services. “In this bill, unless the context otherwise requires: “frontier acreages” means any or all licenses or leases located in the Anambra, Benue Trough, Bida, Chad, Dahomey and Sokoto Basins of Nigeria.

“Inland Basin” means any of the following basins, namely; Anambra, Benin, Benue, Chad, Bida, Dahomey, Gongola, Sokoto and such other basins as may be determined from time to time by the minister.” The PIB formally titled, “A Bill for an Act to Provide for the Establishment of a Legal, Fiscal and Regulatory Framework for the Petroleum Industry in Nigeria and Other Related Matters, 2012”, is seeking to, among other things, create a conducive business environment for petroleum operations; protect health, safety and the environment in the course of petroleum operations, enhance exploration and exploitation of petroleum resources in Nigeria for the benefit of Nigerians; optimise domestic gas supplies, particularly for power generation and industrial development; establish commercially-oriented and profit-driven, oil and gas entities; deregulate and liberalise the downstream petroleum sector; create efficient and effective regulatory agencies; and promote transparency and openness in the administration of the petroleum resources of Nigeria. END

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