Watershed Moment, As Buhari Signs Petroleum Act to Overhaul Oil Industry

•Senate President, Speaker, OPEC, NEITI, industry stakeholders hail new legislation

•PDP, PANDEF, IJC kick against Act, condemn assent, say President has demonstrated he is not a listening leader

Deji Elumoye, Chuks Okocha, Emmanuel Addeh,

Udora Orizu in Abuja and Olusegun Samuel in Yenagoa

In a historic move yesterday, President Muhammadu Buhari signed into law the Petroleum Industry Bill (PIB), a piece of legislation that will serve as the framework for the operations in the oil and gas industry.

The legislation which has suffered several setbacks since 2008, when it was first presented to the National Assembly, aims at removing legal and regulatory uncertainties that have held back the industry’s growth.

The Petroleum Industry Act (PIA) provides legal, governance, regulatory and fiscal framework for the Nigerian petroleum industry, the development of host communities, and related matters.

This is just as the President of the Senate, Dr. Ahmad Lawan; Speaker of the House of Representatives, Hon. Femi Gbajabiamila; the Organisation of Petroleum Exporting Countries (OPEC), the Nigeria Extractive Industries Transparency Initiative (NEITI) and some industry players have said the PIA would positively reshape Nigeria’s industry.

On the contrary, the Peoples Democratic Party (PDP), the Pan Niger Delta Forum (PANDEF), ljaw National Congress (INC), have expressed displeasure over the development, saying the president failed to heed to the complaints on certain areas in the law.

A statement issued by the President’s Special Adviser on Media and Publicity, Femi Adesina, said President Buhari assented to the Bill working from home.

It stated: “Working from home in five days quarantine as required by the Presidential Steering Committee on COVID-19 after returning from London on Friday August 13, the President assented to the Bill Monday August 16, in his determination to fulfill his constitutional duty.

“The ceremonial part of the new legislation will be done on Wednesday, after the days of mandatory isolation would have been fulfilled.

“The Petroleum Industry Act provides legal, governance, regulatory and fiscal framework for the Nigerian petroleum industry, the development of host communities, and related matters.”

Buhari’s government is banking that the reforms will attract a greater share of global capital allocated to fossil fuel projects.

The Senate and House of Representatives had last month passed the bill, thus ending a long wait since early 2000s.

But while the Senate had approved three per cent as operating expenditure to the host communities, the House of Representatives, on its part had approved five per cent.

Both chambers had equally approved 30 per cent of the Nigerian National Petroleum Company Limited (NNPC) profit share for exploration of frontier basins such as Lake Chad, Benue trough, Anambra, Dahomey (Lagos) and Gombe Basins.

The disparity in the percentage approved for the Host Communities by the two chambers resulted in the setting up of a Conference committee headed by the Senate Leader, Senator Yahaya Abdullahi, to harmonise the two positions.

Eventually, the committee recommended three per cent to the Host Communities which both the Senate and the House of Representatives adopted and sent to the President for assent.

The presidential assent has rekindled hope that although late in coming, some part of the losses, by one estimate by NEITI exceeding $200 billion, may be recouped before big oil finally goes into extinction.

With the new law, the establishment of an Upstream Regulatory Commission to oversee upstream petroleum operations, including technical, operational and commercial activities and ensure compliance with all applicable laws and regulations governing upstream petroleum operations, will soon be set up.

It will also see the transformation of the Nigerian National Petroleum Corporation (NNPC) into a profit-oriented company devoid of political interferences.

Added to that, is the establishment of the Nigerian Midstream and Downstream Petroleum Regulatory Authority which would be responsible for the technical and commercial regulation of midstream and downstream petroleum operations in the petroleum industry in Nigeria.

The new law will see the deregulation of the sector and ensure strict environmental implementation of policies, laws and regulations for midstream and downstream petroleum operations; and to develop and enforce a framework on tariff and pricing for natural gas and petroleum products.

With the signing of the bill into law, NNPC now becomes commercialised as Nigerians will have the opportunity to buy shares in the business and ensure more transparency in its operations.

Senate, Gbajabiamila Say Legislation Positive for Nigeria’s Economy

The Senate described the new PIA as a major victory that has the potential of bailing Nigeria out of its economic predicament.

According to the upper legislative chamber, the Act will also enable the country to make the most of economic gains of the oil industry for the benefit of Nigerians.

Chairman of the Senate committee on Media and Public Affairs, Senator Ajibola Basiru, in a statement congratulated the Executive arm of government, the leadership and members of the National Assembly and all other stakeholders in the oil industry for the realization of the new Act.

He noted that efforts at reaching this stage had been a protracted affair as the Bill, first initiated in 2003 had been subjected to a ping pong affair between the previous legislatures and the Executive.

According to him, the Ninth National Assembly finally broke the jinx when it recently passed the Bill after working dispassionately by putting the interest of the nation first over petty squabbles and other self-interests, thereby laying finally to rest previous failed attempts.

The Senate spokesman further attributed the success of the accent to the bill to the cooperative efforts of all participating sectors in the process and also the non-confrontational policy of the current National Assembly.

On benefits of the new law, Basiru said the PIA will juice up the national economy by liberalising the petroleum sector which will pave way for investors, both local and international, to invest in the oil sector with government on a competitive basis.

In his contribution, the Speaker of the House of Representatives, Hon. Femi Gbajabiamila, also hailed President Muhammadu Buhari for assenting to the PIA, saying Nigeria’s oil and gas industry will now receive a breath of fresh air and allow investments and transparency to flourish.

Gbajabiamila, in a statement, noted that the coming into being of the law was a victory for Nigerians and a landmark achievement that ended the two-decade-long journey.

According to him, when massive investments come in as a result of the PIA, many Nigerians will gain employment.

He expressed optimism that with the law, Nigerians would also benefit from reduced fuel prices as there would be competition among the industry players.

He said, “As I said before, this is a landmark achievement. It has been 20 years in coming. This ninth Assembly will be recorded on the right side of history for this big score. I call on investors to take full advantage of the opportunities that the new law provided.”

OPEC: Buhari Has Ushered in New Era for Oil Sector

The Secretary General, OPEC, Mohammad Sanusi Barkindo, in a statement congratulated President Buhari, saying it marked significant milestone for Nigeria’s oil industry and an historic achievement for the Presidency.

According to Barkindo, with the stroke of a pen, the president has inaugurated a new era for the industry following years of legislative efforts to strengthen the legal, regulatory, fiscal and governance framework of the petroleum sector.

“Indeed, the new law will enhance the Nigerian petroleum industry’s reputation, open the door to new investment, and ultimately strengthen its position to meet the world’s growing demand for energy. The enactment of this legislation is especially timely as the investment outlook becomes clouded by efforts aimed at accelerating a lower-carbon future.

“Furthermore, the new law will help harness Nigeria’s potential to achieve its programme of raising oil production to four million barrels per day and oil reserves to 40 billion barrels, while also drawing on the country’s vast natural gas reserves to provide clean and efficient energy.

“In addition, these resources will be vital to supplying world markets with a broad portfolio of energy options, and support global efforts to alleviate energy poverty as outlined in the United Nations’ Sustainable Development Goal 7,” the OPEC scribe added.

He noted that the signing into law of the legislation also coincided with another significant milestone in Nigeria’s history – the 50th anniversary of Nigeria’s Membership of OPEC.

According to Barkindo, the golden moment provides a unique opportunity to reflect upon Nigeria’s rise as a global energy supplier and partner.

“Since the 24th OPEC Conference on 12 July 1971, when Nigeria received a unanimous and enthusiastic welcome as the 11th Member Country of the Organisation, our country has come to symbolise Africa’s within OPEC and its pivotal support for global oil market stability.

“Excellency, the past year has been a time of enormous challenges for our world, for our Organisation, and for each Member Country. Yet throughout this difficult period, we have demonstrated the enduring importance of OPEC and its timeless commitment to dialogue, cooperation, multilateralism and respect among all nations,” he added.

NEITI: Law Has Ended Uncertainty of Future of Nigeria’s Oil Sector

In its assessment, NEITI also described the development as historic.

The Executive Secretary of NEITI, Dr. Orji Ogbonnaya Orji, in a statement, noted that the new law has ended decades of uncertainty concerning the future of Nigeria’s oil and gas sector.

According to Orji, “The new law has opened a new phase of wider opportunities in the oil and gas industry. For us in NEITI, President Buhari has broken new grounds, created new business horizon built on healthy legal frameworks that will push the boundaries of reforms in the sector with realistic optimism for inflow of investments, revenue growth and job opportunities.”

The transparency boss applauded the significance of the Presidential assent to the Bill, adding that NEITI looks forward to playing active roles in designing a new future for Nigeria’s oil and gas industry under the new Petroleum Industry Act.

“The signing into Law of the PIB has demonstrated government’s resolve to strengthen governance processes and systems especially in the extractive industry through an institutional and legal framework. NEITI is encouraged by the development,” he added.

The NEITI Executive Secretary expressed delight that the, “Petroleum Industry Law will provide the dynamic legal governance framework required to re-position Nigeria’s Petroleum industry to fully embrace competition, openness, accountability, professionalism and better profit returns on investments to both companies and government.”

He further stated, “I want to also use this opportunity to call on companies, government agencies and civil society involved in the oil and gas sector governance to give this Law a chance to succeed. NEITI as an agency with legitimate interest in the Law will carefully study the contents of the new Law and work closely with national and global partners especially the EITI to use the Law to open the Nigeria oil and gas sector for transparency, accountability and inflow of foreign direct investments into Nigeria.”

Industry Stakeholders Say Legislation Big Win for Nigeria

In his reaction to the promulgation of the new law, Chairman, Board of Trustees of the Oil and Gas Trainers Association of Nigeria (OGTAN), Dr. Mayowa Afe, told THISDAY that it was a happy day for the industry and a big win for the country.

The former President, Nigerian Association of Petroleum Explorationists (NAPE) and current President, European Association of Geoscientists and Engineers (EAGE), explained that aside the argument over the three per cent or five per cent for host communities, the law is a foundation that can be built upon in the future.

“It’s good news that the president has come all the way from his holiday and on his first day of work assented to the bill. It is good news for all of us. It has been there for 20 years although it’s not perfect. No law is perfect, but we can begin to work on it from here, particularly the three per cent or five per cent for the communities.

“Now, we have a law regulating the oil and gas industry and the ones that are not up to what we want, we begin to work on it and there will be a lot of advocacy concerning this. So, it is a good day for all of us.

“For investors, those who are bringing their money into the country, they now know what they are bargaining for and the communities will know what to expect. I am happy, the industry is happy.

“Now every company knows what they are working against, because there is now a regulation and a framework, so I can put my money there. It’s different from a situation where people didn’t really know what was going on, no regulation and those we had were archaic, he stressed.

In his remarks, President of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), Dr. Billis Gillis-Harry, stated that although the law was largely unfair to the Niger Delta, it wasn’t a bad place to lay a solid foundation for the sector.

He noted that the country’s scarce resources that were being used to fund the petrol subsidy regime will now be used for developmental purposes, saying that the organisation had always supported deregulation.

“As for the three per cent, it is unfair to the Niger Delta that bears the burden of oil production in the country to be so unfairly treated.

“When you compare this to 30 per cent of NNPC profits even as a private company, being reserved for the frontier exploration, it doesn’t add up.

“However, bills are made by man. I believe that at the right time some factors should change, but I congratulate Nigerians that this bill has been passed, though it had been jinxed for a number of years. It’s a landmark event,” he stated.

Chairman, Petroleum Technology Associated of Nigeria (PETAN), Mr. Nicholas Odinuwe, in his remarks expressed joy that the bill had been signed into law, adding that the views of the organisation were taken into consideration in the process of consultations.

“The president has signed the PIB and there’s no comment from me that will change anything. We are happy that our views were taken into consideration. We are happy, so let the bill work for Nigeria,” he said.

Also, a Niger Delta activist and the National President, Niger Delta Nonviolence Agitators Forum (NDNAF), Wisdom Ikuli, hailed President Buhari’s prompt signing into law of the legislation.

Ikuli, said the action of the President showed his high level of responsibility and responsiveness and a further confirmation of his proactive and compassionate disposition especially to the plights of the over exploited people of the Niger Delta and the Oil Producing Communities in particular.

PDP, PANDEF, Others Kick

But despite the accolades that have been heaped on Buhari over the new oil and gas law, the Peoples Democratic Party (PDP) has berated the president.

According to the political party, the president ignored the outcry by Nigerians across board not to sign the law, describing it as offensive, repugnant and anti-people.

The party in a statement by the National Publicity Secretary, Kola Ologbondiyan, noted that the signing of the law, despite widespread public rejection, amounted to endorsement of imposition, saying it further confirmed that, “President Buhari and his All Progressives Congress (APC) have no iota of respect for the people as well as the tenets of democracy as a system of government.”

According to the PDP, “By his action, President Buhari has only authenticated that he is not a listening leader and that the APC and its leaders are only out to trample on the will of Nigerians for their selfish interests.

“In putting his hands to endorse the obnoxious bill, even with its distasteful, paltry and provocative three per cent revenue to oil producing communities, President Buhari and the APC have again displayed disdain and insensitivity to the sufferings of the people of the Niger Delta.”

The PDP said the President could have returned the bill to the National Assembly with a request that it was made to address the demands of the oil producing communities.

It added: “Our party fears that the new law cannot guarantee the desired stability and development in the oil and gas sector as well as respite in the Niger Delta region.

“If anything, the Act as signed by President Buhari is a dangerous recipe for avoidable crisis in the sector.”

The PDP called on President Buhari to salvage the situation by immediately forwarding an amendment bill to the National Assembly to reflect the true wishes and aspirations of every segment of the nation.

While calling for calm across the country, particularly the South-South geo-political zone, the PDP also charged lawmakers elected on its platform to be at alert even as preparation must be commenced for an urgent amendment to this law.

Also, the Pan Niger Delta Forum (PANDEF) faulted Buhari’s assent signing of the bill into law, describing it as unfortunate especially with the public outcry associated with the passage of the bill by the National Assembly.

It stated that the Niger Delta people may have no option but to take a position on the issue which include seeking political as well as legal response to the issue at stake.

The group in a statement by its spokesman, Ken Robinson, wondered why President Buhari assented to the bill to become law despite condemnation of some of its provisions including the paltry three per cent provision for the Host Communities Development Trust Fund and the appropriation of 30 per cent of NNPC Limited’s profit for the Frontier Oil Exploration Fund.

According to the group, the law fell short of the expectations of the Oil and Gas Producing Communities, which bear the brunt of unconscionable industry operations.

It further stated: “This assent, by President Buhari, simply speaks to the repugnant attitude of disregard, propelled by arrogance, disdain and contempt with which issues concerning the Niger Delta Region are treated, particularly, by the present Administration.

“What this act signifies is an unequivocal message to the Niger Delta people that how they feel and what they say, do not count, at all, in the Schemes of the Nigerian Project.

“That’s insensitive, abominable and afar every boundary of proper Democratic practice, and, therefore, unacceptable to the good people of the Niger Delta, the critical economic nexus of the entire Nigerian territory.

“The Niger Delta people will speak, shortly, after full consultations, on this callous act, on the best legal and political response.”

On their part, the ljaw National Congress (INC) said it remains resolute on its earlier stance on the minimum acceptable allocation of 10 per cent to the oil bearing communities as compensation for the various degrees of damages suffered in course of oil and gas production in the area.

The president of the umbrella body of Ijaws worldwide, Prof. Benjamin Okaba, said with President Buhari’s assent, their next line of action after the passage of paltry three per cent would be announced after further consultations with critical stakeholders within and outside the region.