Even as the Senate threatened last week to present its own version of the controversial Petroleum Industry Bill, there are strong indications that the delay in presenting an harmonized Bill will end this week. Reuters wrote last weekend.
The PIB has been years in the making and the delays have caused uncertainty over the future framework of working in the country, costing the industry billions of dollars of potential investment and the government much-needed revenues.
Even as the Senate threatened last week to present its own version of the controversial Petroleum Industry Bill, there are strong indications that the delay in presenting an harmonized Bill will end this week. Reuters wrote last weekend.
The PIB has been years in the making and the delays have caused uncertainty over the future framework of working in the country, costing the industry billions of dollars of potential investment and the government much-needed revenues.
Without it, most analysts expect oil production in Nigeria to decline substantially over the next few years
A copy of the 200-page PIB obtained by Reuters includes plans to partly privatise and list the Nigerian National Petroleum Corporation, tax oil companies’ profits at 20 per cent for deep offshore and 50 per cent for shallow or onshore, and give the oil minister supervisory powers over all institutions in the industry.
Shipping Position Daily recalls that the Senate had, also last week, threatened to introduce its own version of the PIB, following delays by the Executive to present a harmonised version of the proposed legislation to the National Assembly.
The Chairman, Senate Committee on Petroleum (Downstream), Senator Magnus Abe, in a chat with journalists, said a group of senators were currently harmonising the different versions of the bill and would present it as a private member bill to the upper legislature.
“At any time the Executive feels the need to bring what they have, they can bring it and we can add it to what we are already looking at and proceed from there. Legislation, as you know, is a function of the legislature and not an Executive function; so, it doesn’t make sense for us as a country to keep waiting indefinitely on the Executive before we proceed with what is clearly a very critical area of legislation in the affairs of our country”, the lawmaker said.
Abe added, “As you know, because of this lack of a knowledgeable way forward on the question of the PIB, it has affected investment in the sector, it has affected confidence in the sector because people don’t know whether we are still going to be operating under the old Petroleum Act or whether we are now going to operate the new industry bill.
“Since this is an industry that requires long-term planning and investment, it is difficult for participants to know exactly what to do and to move forward. So, we have decided that we can no longer allow that state of uncertainty to continue to permeate the industry. Therefore, our members of staff are already looking at the existing versions of the PIB. I don’t see much that is wrong with them, and very soon, we will be introducing the PIB in the Senate.”
Nigeria country exports more than two million barrels a day of crude oil popular with United States buyers because it is light and easy to refine. China and India are also growing takers of Nigerian crude.
Even when this version of the PIB gets to the National Assembly, there is no guarantee lawmakers will push it through, as powerful vested interests could block or delay it, as has happened in the past, according to Reuters.
The watchdog of the oil industry, Department of Petroleum Resources, has made a shocking revelation that only five out of the 31 oil producing companies use its metering system to account for their production, and by inference, sales.
The agency said this last week at a consultative meeting, which the oil companies and the Special Revenue Task Force headed by the pioneer Chairman of the Economic and Financial Crimes Commission, Mr. Nuhu Ribadu, held.
An Assistant Director in the DPR, Mr. A. O. Ohiani, who made the disclosure, however, did not give the identity of the five compliant firms and the errant ones.
The Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, had said last week that the country’s annual oil revenue loss was about $7bn through sharp practices by companies and bunkering.
Ribadu, in an interview with journalists, said the nation’s daily crude loss was 200,000 barrels; adding that insecurity was the biggest challenge facing the industry.
He said, “That is why we want to open up the industry. By the time we finish our assignment, the industry will not be the same again.
“We called them (stakeholders) to come and discuss the issue of metering. Almost all of them have come up with suggestions and are serious about it.”
Ribadu added, “Security is the reason why we are not getting maximum gain out of it. Security is only 30 per cent of the problem of the industry, and that is why 200,000 barrels are lost daily.
“We are also losing investment in the industry and this is affecting the companies seriously. Nigeria is the only country in the world today where crude oil is stolen.”
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