The Department of Petroleum Resources (DPR) has said that Nigeria’s oil industry has over time grappled with multiple regulatory agencies which has potential investors moving to other markets.
The Department noted that the federal government realising overlapping functions of these agencies raised a committee to harmonise and prune down the number of agencies in the country.
Speaking with our correspondent in Lagos on the sidelines of a one-day sensitisation seminar on research outcome of water contamination in Baruwa community of Lagos State funded by Tertiary Education Fund (TetFund), director of the DPR, Ladan Mordecai, warned that apart from multiplicity of functions each agency sets out regulations and levies which impacts on the profit of operating oil companies.
Mordecai , who spoke to our correspondent through the director of environment, Dr. Musa Zagi, said that those calling for two regulators for the industry did not consider the challenges faced by investors who had to deal with various regulatory demands of government agencies in the country.
“What we need at this time is a well funded and vibrant agency with the capacity to deal with industry issues. In DPR we have effectively managed both the up and downstream sectors as well as the midstream sub-sector. “Multiple agencies brings about confusion apart from the fact that it costs government so much to fund them.
If you look at oil spill in the country in the last nine years we have recorded more incidents than what we have experienced in the last fifty years of oil exploration in the country, and this is the time we have the National Oil Spill Detection and Response Agency (NOSDRA) established in 2006 as an institutional framework to coordinate the implementation of the National Oil Spill Contingency Plan (NOSCP) for Nigeria.
According to him, “We are just trying to discourage investments in the sector by calling for establishment of two agencies for the industry.”
Operators in Nigeria’s downstream sub-sector of the petroleum industry are demanding separate regulatory agency for its operations.
The operators have expressed deep concern that a single regulatory body as recommended in the Petroleum Industry Governance Bill (PIGB), by the National Assembly would further create more problems inherent in the industry which the New Bill intends to solve.
LEADERSHIP reports that oil marketers and the Organised Private Sector (OPS), at a joint media briefing in Lagos at the weekend called for two regulatory bodies to regulate the oil industry in the bill, currently pending before the national assembly.
Executive secretary of the Major Oil Marketers (MOMAN), Mr. Obafemi Olaworein, in his remarks warned that an omnibus commission that would be empowered to regulate the entire petroleum sector, runs contrary to industry standards which by default already provide for an upstream and downstream regulator.
He recommended for separate regulatory bodies for upstream and downstream, arguing that single regulator would create complexities and challenges for operators in the petroleum value chain.
He said that because the structure, operation and nature of the downstream are totally different from that of the upstream sector, a single regulator would create complexities and challenges for operators in the petroleum value chain because the structure, operation and nature of the downstream are totally different from that of the upstream sector.
“We strongly canvass for the creation of two regulatory bodies each focusing on the downstream and upstream sectors of the Industry and on the entire gamut of technical and commercial issues in each of the sub-sectors. Being mindful of need to merge and streamline the number of existing regulatory agencies in the face of dwindling revenue of government.
“ We hereby affirm that there is no need creating another regulatory agency that will further swell the list of existing agencies with similar functions and duplicated mandates,” he stated.
On his part, the executive secretary of the Depot and Petroleum Products Marketing Association of Nigerian, (DAPPMAN), Femi Adewole , regretted that the position of MOMAN and DAPPMAN at the public hearing on the PIGB advising against a single regulator for the industry was not taking into consideration in the final harmonisation of the PIGB.
“We marketers were at the PIGB public hearing at the national assembly. And there we made our position known that a single industry regulator would be inimical to the growth of the industry. But to our surprise, our position was not taking into cognisance in the harmonised PIGB.
“It is in the light of this error or omission that we are calling on the national assembly to withdraw the PIGB and include the position of stakeholders on this, so that we don’t have a defective law that will create problems in the future,” he said.
On his part, chairman, Economic Policy of the Manufacturers Association of Nigeria (MAN), Reginald Odiah, lamented that a critical stakeholder like the Organised Private Sector (OPS) was not invited to make submissions at the public hearing on the PIGB. The denial of the OPS to have an input in the PIGB according to him, amounts to shaving ones hair behind him.
He noted that the OPS as a stakeholder in petroleum sector value chain, making use of huge quantity of petroleum products including gas should not be left out in the scheme of things.
He argued that a single regulator for the petroleum industry would do the industry more harm than good, adding that having two regulators for the petroleum industry would create room for effective policing of the sector.
Odiah, said more worrisome was the idea by the national assembly to jettison the position paper of the Manufacturers Association of Nigeria (MAN), which largely represents the views of the OPS on the PIGB which included the idea of having two industry regulators for the petroleum industry.