Nigeria is probably one of the most cheated in its oil and gas industry and the reason is not far- fetched. That the legal framework which addresses complex nature of the industry has never been in place and effort to reposition the industry which accounts for 90% of the nation’s foreign earnings has been met with resistance and conspiracy among industry players, hence, the nation continues to be on the receiving end.
The Petroleum Industry Bill (PIB) which began in 2011 by the 7th Senate, almost eight years ago has not been passed into law as a result of vested interests and unfortunately, each time the bill was to be debated at the public hearings, it has been divergent and convergent views by those supplanted by the politicians who have stakes in the industry thereby frustrating every step taken to ensure passage of the bill.
Obviously, Nigeria’s oil and gas industry has witnessed influx of persons and corporate organisations across the globe who have taken advantage of legal loopholes to make billions in dollars as well as enriching various countries to the detriment of domestic economic advantages. In other jurisdictions, it should not have taken them this long to strengthen the industry particularly as an oil mono-economy.
As an industry that is knowledge driven, expatriates who have the ‘technical-know-how’ would ensure that this bill that would have put the nation at comparative advantage and a frontier in African sub-continent at both upstream and downstream levels was frustrated, thereby making some of federal lawmakers having a manifest lack of commitment to ensure passage of the bill. The Petroleum Industry Bill which according to Nigeria’s Senate President in his address at a Public hearings on Senate Committee on Petroleum Resources (Upstream) earlier in the year, ”stating that the 8th would ensure passage of Petroleum Industry Bill in segments as a result of complex nature of the bill”, witnessed the second reading six months after, having been introduced for the first time on 13th April, 2016.
The bill which was sponsored by Chairman, Committee on Petroleum Resources (Upstream), Senator Tayo Alasoadura, though passed through second reading on the floor of the Senate, the lead debate showed a face value rather than addressing fundamental issues that would have ensured derivation and protection of oil revenues for the nation as well as addressing unethical practices that has been a culture among industry players. It therefore means, if the bill is passed in the next few weeks as envisaged, there would not be an infinitesimal difference in the industry in terms of revenue generation and operations.
Notably, Nigeria will continue to loose investment opportunities and one continues to wonder, what should be the level of commitment of legislative arm of government in the face of industry abuse and obvious leakage of revenues, vis-à-vis inherent hazards of gas flaring?
Part of the objectives of governance bill was to create efficient and effective institutions with clear and separate roles for the petroleum industry. Thus, the bill dealt more on creating administrative structures with objectives splitting and usurpation of responsibilities of existing agencies which will at the end of the day create confusion among those agencies. Structures to be created with overhead cost and running cost as well as capital expenditure has not addressed incessant loss of huge revenues at the NNPC as often confessed at Public Accounts or Public Finance sittings. At this time of the day, the Senate ought to have moved to protect the nation’s earnings by putting in place mechanisms that nips in the bud potential areas of revenue loss in the face of economic downturn rather than dissipating energy on creating institutions within institutions.
Moreso, administrative responsibilities of the proposed entities viz: Petroleum Regulatory Commission, National Petroleum Company and the National Assets Management Company have been those saddled with departments and agencies under the NNPC. Their ineffective or otherwise have been the lack of monitoring and supervision, lack of policy direction of government of the day and compromise in oversight function of relevant committees of upper and lower legislative arm of National Assembly.
The bill would have focused more on transparency and accountability and value for the worth of those existing agencies. For instance, National Oil Spill Detection and Response Agency (NOSDRA), an agency responsible with prevention and detection of oil spill; an agency that came into being by the act of parliament with administrative structure cannot be said to have performed optimally as they are relatively unknown.
Taking a look at the environmental degradation in the oil rich Niger Delta, one discovers that NOSDRA has been in comatose, but rather than splitting its mandate of ‘preventive’ and ‘environmental clean ups’, among the Federal Ministry of Environment (FME) and the newly proposed Petroleum Regulatory Commission, it would have been strengthening the administrative structure of the agency and tackling challenges that has rendered them incompetent.
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