The new Petroleum Industry Bill (PIB) formed the fulcrum of discussion at an Oil and gas colloquium Tuesday as Deputy Senate President, Senator Ovie Omo-Agege said the bill when passed into law will help accelerate the growth of the nation’s economy through added value and wealth creation from the oil and gas industry.
Omo-Agege who echoed this perspective at the Colloquium which focused on the PIB in Owerri, and organized by Order Paper, explained that the proposed PIB would positively change the narrative in the Oil and Gas sector when passed into Law because the sector has for long been denied the requisite legislative regulations needed to crystalize its huge potentials into wealth create and economic growth.
The Deputy Senate President who was represented by his Chief of Staff, Dr Otive Igbuzor, said, “But behind such dark cloud is a silver lining. The good news is that the proposed Petroleum Industry Bill (2020) is coming to change all that.”
He added: “The two major planks of the bill is to run the Nigeria National Petroleum Corporation as a business enterprise by the name NNPC Limited.
“This is just as we have Saudi Aramco in Saudi Arabia; Petróleo Brasileiro S.A. (Petrobras) in Brazil; Equinor in Norway and Petronas in Malaysia and establish regulatory agencies to serve as the regulatory agency of the industry.”
According to Omo-Agege, the key objectives of the bill are to promote economic growth through increased oil and gas production, promote economic growth through strong investments in midstream gas infrastructure to increase gas-based power generation and industries.
He said: “Also, transform NNPC in a viable commercially-based and self-sustaining national oil company, create a strong regulatory framework with increased emphasis on midstream development and create an effective midstream and downstream licensing system.”
The deputy president of the senate noted that promoting improved environmental measures and assisting host communities in petroleum operation to achieve their aspirations are part of the desired objectives of the PIB.
He said the second aspect of the PIB that would help the growth of the oil and gas industry is the proposed creation of different regulatory bodies for the upstream midstream and downstream oil sector.
Omo-Agege said that the establishment of the infrastructure fund would also aid in the development of the sector, the region and country at large.
“Specifically, the PIB will make a number of provisions for the creation of such gas infrastructure network.
“With the lofty objectives of the PIB and the intervention mechanisms for host communities; both existing ones and the ones expected to come with the bill, a lot of things are expected to happen that will beneficially affect host communities,” he said.
He accordingly urged all stakeholders and youths in the Niger Delta region to support ongoing efforts to ensure that the PIB was passed.
He explained: “As it is, petroleum resources for many countries, particularly the developing and not-so-developed ones tend to have a usually large presence of the state in the administration of the resources. To this extent, there are rules of engagement; usually some form of “contract” with state departments, for anyone wishing to engage in the business of petroleum, at all segments of its value chain.
“For some countries like Saudi Arabia, Brazil, Russia, Norway and Malaysia, government midwifing is done, using models driven by the desire to ensure that the best values are derived from each segment of the value chain. The result is usually high turnovers at each segment, and with them robust additions to the countries’ revenues and of course, GDPs.
“Conversely, for some countries the administration of the petroleum sector is rather handled as a cost-based department of state for the purposes of regulating the industry. This comes with all the nuances, nay negative, that bedevil regulatory institutions, while at the same time, denies the system the huge potential to create value and wealth, associated with the petroleum industry, as the experiences of many climes, have shown. Unfortunately, this is the category to which Nigeria belongs.
“But behind such dark cloud, is a silver lining. The good news is that the proposed Petroleum Industry Bill (2020) is coming to change all that. The two major planks of the Bill are:
“Run the Nigeria National Petroleum Corporation (NNPC) as a business enterprise by the name NNPC limited. This is just as we have Saudi Aramco in Saudi Arabia;PetróleoBrasileiro S.A. (Petrobras) in Brazil; Equinor in Norway, and Petronas in Malaysia.
“Establish regulatory agencies to serve as the regulatory agency of the industry. To this extent the objectives of the Bill, can be summarized as follows:
“Promote economic growth through increased oil and gas production; Promote economic growth through strong investments in midstream gas infrastructure to increase gas-based power generation and industries; Promote frontier exploration.
“Establish an effective acreage management system; Create transparency and non-confidentiality; Transform NNPC in a viable commercially-based and self-sustaining national oil company.
“Create a strong regulatory framework with increased emphasis on midstream development; Create an effective midstream and downstream licencing system.
“Promote improved environmental measures, and Assist host communities in petroleum operation so as to achieve their aspirations.”
“After this ninth assembly was constituted, I was among those that went to senate president to let him know the importance of the bill and the need for its speedy passage.
“It is embarrassing that some countries that came behind long after we commenced debate on our PIB, have signed into law their PIB, now growing their oil and gas sector,” he said.
In his welcome speech, Oke Epia, the Executive Director, OrderPaper, an advocacy initiative, said that the aim of the colloquium was to bring stakeholders together to brainstorm on the PIB that was before the national assembly.
He said: “In 2018, we convened a similar HostCom Colloquium when it was the Petroleum Host and Impacted Communities Bill component of the disaggregated PIB as it then was.
“This colloquium has been designed as you may notice on the agenda to give us deep insights into the bill, offer comparative perspectives on beneficiate practices and allow us ample opportunity to deploy the understanding gained to place certain demands on the policy actors given with responsibility of reforms of the petroleum sector.”