Energy Analyst Offers Insight Into Why President Buhari Will Not Sign The PIGB

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Thursday, August 30, 2018   14.30PM / Proshare WebTV  

 

Following a recent press statement from the Presidency explaining why it has withheld its assent to the “Petroleum Industry Governance Bill” (PIGB), 2018; a former Head of Energy Research at the Ecobank Group and respected energy analyst on sub-saharan energy markets, Dolapo Oni has reacted to the decision, offering insights into the process for the bill and the position of President Buhari.

 

In a series of tweets unpacked via @Dolarpo he  through his twitter handle, Dolapo elevated the discourse situated around the three reasons provided by the senator Ita Enang, the President’s liaison with the National Assembly; and countered the submissions with three (3) cardinal reasons why the PIGB is not receiving the full backing from the Presidency, viz:

1.              If the PIGB is signed, the President loses the power  to award and renew oil licenses;

2.             With the PIGB, the President will not be able to award new marginal fields; and

3.             Under the PIGB, the President will not be empowered to appoint board members into the NPRC

 

He noted that despite the claims by the Presidency that the PIGB had some legal issues; the document had been subjected to a rigorous process including several public hearings in the country.

 

While the PIGB is an improvement on governance in the petroleum sector, the energy analyst is concerned that it is providing the required true transparency, compared to other climes like Ghana.

 

According to him “We still don’t have access to the petroleum agreements with oil companies, expatriate quotas or contracts signed in the industry. This gives a degree of opaqueness that limits our ability to check these operators also and government officials”.

On the way forward he asserted that the only option left is if a two-third majority of the National Assembly can agree to pass the bill, to make the “PIGB” law. Dolapo is of the view that with intense political activities in the country and the countdown to the 2019 general elections, the PIGB bill issue may be delayed.

 

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The Thread

 

“I have read the press release about why the President will not sign the PIGB and there are 3 reasons stated:

1) if the commission keeps 10% of revenue, it could affect FAAC revenue sharing;

2) difference of opinion on scope of responsibilities given to PEF; and

3) Legal wording

 

This was quickly released to counter claims in the media that the President did not sign the bill because it reduces his powers as President and Petroleum Minister, his ministers disagree with the bill and it contains no fiscal element.

 

This is closer to the truth however... here's a copy of the PIGB again so that you can read it for yourself petroleumindustrybill.com/wp-content/upl…

 

Particularly pay attention to pages 13 to 14, sections 1 to 6. The 10% has nothing to do with government oil revenue shared as FAAC. Instead it deals with revenue from fees and licenses, publications sold, fees for services rendered by the NPRC to non-petroleum companies and only 10% of this fund is to be kept by the NPRC

 

All other monies made from production, leases, bonuses and etc are to be paid into the Federation account. Read no 6. It is clearly stated.

 

Please I would like to ask if someone can point me to where this regime has articulated its policy for an independent PEF.

 

Don’t worry I checked the National Petroleum Policy. The PEF is mentioned only once and in passing.

 

When we find this, we can discuss the second topic...

 

The wording of the PIGB has some legal issues is the final point. The presidency has to do better and show us where these are.

 

Don’t forget that this is a document that has gone through several public hearings with all industry stakeholders over several weeks

 

If you missed those public hearings, you can read up on all of them here on http://www.petroleumindustrybill.com/, a wonderful website by the law firm Odujinrin & Adefulu. All the points made by every major stakeholder is noted for reference.

 

Not once did this issue of wording come up but heck.... this is why I am convinced that there is no other explanation for refusing than the loss of power and to be fair to the President, it is a major loss if the PIGB is passed.

 

He loses power(s) to:

1) award and renew oil licenses

2) award marginal fields

3) appoint board members to NPRC

 

All these now require senate and in some cases National Assembly approval. The commission that will be taking up these responsibilities will also have its budget approved by the house like the national budget. Basically, there is a lot of leeway to check the president...

 

On the flip side, my own grouse with the PIGB stems from the fact that while it is an improvement on the PIB sections on governance of the sector, it stops short of giving us true transparency.

 

We still don't have access to the petroleum agreements signed with oil companies - expatriate quotas or contracts signed in the industry.

 

[For example] I can pull Tullow's agreement with the government of Ghana but I can't do that with any company in Nigeria. This gives a degree of opaqueness that limits our ability to check these operators also and government officials.

 

The only option left now is if a two-third majority of the National Assembly can agree to pass the bill then it becomes law but with all the chess pieces that have moved in recent weeks, this will be unlikely to happen. So the bill goes into a loop until after elections.

 

Lastly, it will be well with us in Nigeria.”

 

Proshare Nigeria Pvt. Ltd.


 

 

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