Friday, January 22, 2021 / 11:12 AM / by CSL Research / Header Image Credit: Twitter; @OfficialNCDMB
President Muhammadu Buhari on Thursday inaugurated the
National Oil and Gas Excellence Centre (NOGEC).The center which was established
to ensure transparency in the Nigerian oil and gas sector is expected to serve
as an integrated resource complex to drive safety, value and cost efficiency in
the industry, as well as strengthen Nigeria's position as regional leader in
the oil and gas industry. The centre will reside at the headquarters of the
Department of Petroleum Resources (DPR) in Lagos. There will be a few functions
within the NOGEC including a Search, Rescue and Surveillance (SeRAS) centre, a
National Improved Oil Recovery Centre (NIORC), a Dispute Resolution Centre
(DRC), Competence Development Centre (CDC) and Integrated Data Mining and
Analytics Centre (IDMAC).
Transparency and accountability is critical in the
extractives industry, which sustains the Nigerian economy. There have been some
attempts to address this by government but there are still major gaps to be
addressed. While we appreciate the government's efforts at seeking to ensure
transparency in the Nigerian oil and gas sector, we are of the view that the
most critical step in this direction will be a complete assent to the long
debated Petroleum Industry Bill. The Bill among other things proposes the
restructuring of the Nigerian National Petroleum Corporation (NNPC) and the
Petroleum Products Pricing Regulatory Agency (PPPRA). The unbundling of the
NNPC is aimed at eliminating government/political interference. The bill also
proposes the establishment of an agency known as the Nigerian Upstream
Regulatory Commission which will be responsible for the technical and commercial
regulation of upstream petroleum operations alone.
The Petroleum Industry Bill (PIB) was first introduced
to the National Assembly in December 2008. A presidential committee set up in
2007 to look into the oil and gas sector came up with this bill, which aims to
improve transparency at the NNPC and increase Nigeria's share of oil revenue.
Drafts of the bill, however, became very contentious due to objections from the
international oil companies (IOCs) and the Nigerian National Petroleum
Corporation (NNPC). Consequently, the bill was never passed into law. Towards
the end of 2015, the PIB was amended to speed up its passage and was broken
into different bills, one of which was the PIGB, to address the governance
framework of the oil industry. The Senate President noted that the plan was to
expedite the aspects of the old law that were not controversial while the
controversial areas could be placed on hold. The two houses passed the PIGB in
2018 but the President did not sign the bill till it ran out of time. In
September last year, the President sent a version of the bill to the Senate for
consideration and passage.
With more than a decade of deliberations and
revisions, it will be a great relief to all stakeholders if the Bill is finally
passed into law. Many stakeholders hold strongly that new investments in the
oil sector is dependent on the passage of the PIB which would take a more
holistic approach in addressing issues around the fiscal terms especially
following the passage of the Deep Offshore and Inland Basin Production Sharing
Contracts (amendment) Bill, 2019 (PSC Amendment Bill).
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