Experts and stakeholders in the oil and gas industry have reacted differently to the time frame of twelve months given to the Petroleum Industry Act (PIA) implementation committee inaugurated yesterday by President Muhammadu Buhari.
President Buhari had yesterday approved the implementation committee to be headed by the minister of state for petroleum, Chief Timipre Sylva, directing the committee to immediately commence implementation of the Petroleum Industry Act in 12 months.
President Buhari gave the approval while speaking on the PIB, which he signed into law on Monday, during a meeting with the leadership of the National Assembly led by the President of the Senate, Dr. Ahmad Lawan.
He charged other ministries, departments and agencies to work with the minister of state for petroleum towards the successful completion of the implementation process.
The president said the lack of political will had hampered the growth of the industry, and that in the last ten years, the country had lost about $50 billion, adding that the new act will coordinate the activities of the NNPC and reposition it for further progress.
Other members of the implementation committee include: Permanent Secretary, Ministry of Petroleum Resources, Group Managing Director, NNPC; Executive Chairman, FIRS; Representative of the Ministry of Justice; Representative of the Ministry of Finance, Budget and National Planning; Senior Special Assistant to the President on Natural Resources, Barrister Olufemi Lijadu as External Legal Adviser, while the Executive Secretary, Petroleum Technology Development Fund will serve as Head of the Coordinating Secretariat and the Implementation Working Group.
“The primary responsibility of the steering committee shall be to guide the effective and timely implementation of the PIA in the course of transition to the petroleum industry envisaged in the reform programme, and ensure that the new institutions created have the full capability to deliver on their mandate under the new legislation.
The committee has a 12 month duration for the assignment, and periodic updates will be given to Mr President,” Adesina said.
In his reaction, Sani, the chief executive officer of Nigerco Energy, in his reaction said the industry lacked basic infrastructure, transparency, was opaque and required a longer time to provide the necessary guidelines and abilities especially in the area of regulation.
Sani is of the opinion that the private sector should be fully mobilised to play a major role in the oil sector transformation as provided by the Act.
He said the six months transition period needed to bring into operation the Nigerian National Petroleum Corporation Limited and create an enabling structure for the new regulatory agencies was not enough to achieve it.
Sani also observed that the better part of 2022 would be dedicated to election matters and a period of gradual winding down of the present administration which will politically influence the decision of the committee.
Also speaking, John Udeagbala, president of the National Association of Chambers of Commerce Industry Mines and Agriculture, NACCIMA, said the committee should consider a structured and disciplined implementation of the Act in the long term so as to achieve its purpose.
Udeagbala, said an implementation approach will ensure transparency and focus while reinforcing confidence among local and international players.
He corroborated the position of Sani on the unbundling and commercialization of the NNPC and disaggregate regulation from operatorship and accommodate diverse stakeholders especially host communities is transformative.
But both said the Corporation’s transparent functionality depends on the good work of the committee.
Reacting to the inauguration, Uche Obi, a Senior Advocate of Nigeria and the Managing Partner of Alliance Law Firm, said the 12 months timeline is enough for a committee to critically study any statute.
Obi, who advises on a wide range of matters in oil and gas, power, capital markets, power, and regulatory advisory services, said though he has not seen the terms of reference of the committee, nevertheless one year is enough time to deliver on all deliverables given that the law in itself has provided the structure to work on
He, however, conceded that “political forces might come into play and agents of diversion may derail the committee’s work.”
Goke Dele, the group CEO of Quest Oil and Gas Group, said, “The action of the president shows his commitment towards the success of the Act and the development of the industry.
“This is both timely and audacious. Moreover, the country cannot afford to lose any additional investment due to delays. However, the divergent views of various stakeholders with regard to the PIA must be considered,” he said.
Law Will Reduce Government Revenues – FIRS
The Federal Inland Revenue Service (FIRS) has expressed fear that PIA would reduce government revenue expected from the Petroleum Profit Tax next year.
FIRS chairman, Muhammad Nami, stated this yesterday at the ongoing 2022-2024 Medium-Term Expenditure Framework and Fiscal Strategy Paper (MTEF & FSP) during interaction with the House of Representatives Committee on Finance and Ministries, Departments and Agencies (MDAS) at the National Assembly Complex, Abuja.
The agency projects to generate about N10.1 trillion revenue in 2022 financial year. the agency, however, said N2.053 trillion out the amount will be remitted to the federal government while the balance will be transferred to states and local governments areas.
Nami said the FIRS generated a total revenue of N4.950 trillion against budgeted N5.076 trillion representing about 98 per cent, adding that the non-oil component contributed N3.435 trillion and oil aspects brought in N1.515 trillion.
According to him, the cost of collection (4% net of 2 per cent Nigerian Customs Service NCS VAT) of N130.45 billion was achieved against the budget of N180.76 billion to fund the three operational expenditure heads for the year.
While reviewing the 2021 budget performance, the FIRS chairman said: “The Service 2021 approved MTEF projected revenue collection was N6.40 trillion representing N1.64 trillion (26%) and N4. 76 trillion (74%) for oil and non-oil respectively.
“The Service as of June 30, 2021 (half-year) achieved N2.762 trillion representing 43 per cent of approved projected revenue collection. The non-oil revenue collection during the period was N2.118 trillion against N1.5 trillion collected in the correspondIng period representing 41. 2 percent Increase.”
Niger Delta Rejects Act, Demand Total Restructuring
A group, the Niger Delta Congress (NDC) has called on the people of the region to reject the Petroleum Industry Act (PIA) recently assented to by President Muhammadu Buhari, describing it as an obnoxious law.
The NDC, in a statement made available to LEADERSHIP in Port Harcourt yesterday, also called on the people of the region to demand, with immediate effect, the total restructuring of the country so as to enable them to protect what is rightly theirs.
The statement, which was signed by the group’s spokesman, Barrister Ovunda Eni, said Buhari’s decision to assent to the PIA did not come as a surprise to the people of Niger Delta region.
It reads in part: “The Petroleum Industry Act recently signed into law by President Muhammadu Buhari does not come as a surprise to the Niger Delta Congress.
“It would be incredulous for anyone to think that the different ethnic nationalities of the Niger Delta will assent to a legislation whose very first clause dispossesses the people of their rights to their resources and, by extension, lands.
“Bearing this in mind, we believe it will be a total waste of time discussing the contents of the Petroleum Industry Act.
“Nonetheless, we appreciate the revelations on the obvious tyranny and lack of empathy by the majority for the region, and also the indolent roles played by the political leaders of the Niger Delta region in the preparation and eventual passage of this bill into Law.
“Consequently, the NDC urges all the various ethnic nationalities of the region to reject this obnoxious law and immediately call for a total restructuring of this country and ensure we protect what is rightfully ours.”
PIA Can Be Returned To NASS For Amendment – Lawan
Also speaking, the President of the Senate, Dr. Ahmad Lawan cautioned against tampering or manipulating the disbursement of the three percent ($500 million) compensation which accrues to host communities by the appointed people.
Lawan said the PIA can be brought back to the National Assembly for amendment.
He disclosed this to State House correspondents after the brief ceremony where President Muhammadu Buhari announced the setting up of an implementation committee for the new law.
According to him, it is when implantation starts, that’s when people will start to see where amendment is needed.
Lawan said the host communities are winners as well, adding that what some of them had hoped, with time, such issues will be further addressed.
He said, “So this is something we all have to address with some optimism and hope that it will be Okay. But because we are human beings, no act of human beings could be perfect. So when we are able to see issues, the National Assembly is there. Bring them for amendment. Even the most difficult issues can still be brought back to the National Assembly – if it is worthwhile to do so, but I believe that there is no need for us to be emphasising the problems rather than the prospects.”
“But you know from zero to over $500 million and with time, such issues will be further addressed but I want to also caution that it is not the $500 million that is more important but how we are able to prudently and transparently deploy this $500 million in the host communities. This time around, there should be no excuses for anybody to tamper with this money.”
Nigeria Lost $50bn In 10 Years Due To Uncertainty In Petroleum Industry- PMB
President Muhammadu Buhari yesterday in Abuja said Nigeria lost an estimated $50billion worth of investments in ten years, created by the uncertainty of non-passage of the Petroleum Industry Bill (PIB), and lack of progress in the petroleum industry.
In his remarks at a ceremony on passage of the PIA, which preceded the Federal Executive Council (FEC) meeting, the President said the stagnation affected growth of the economy, citing lack of political will on the part of past administrations to actualize the needed transformation.
According to a statement by presidential spokesman, Femi Adesina, President Buhari said the assent of the Petroleum Industry Bill on August 16, 2021, marks the end of decades of uncertainty and under-investment in the petroleum industry.
“We are all aware that past administrations identified the need to further align the industry for global competitiveness, but there was lack of political will to actualise this needed transformation.
“This lack of progress has stagnated the growth of the industry and the prosperity of our economy. In the past ten years, Nigeria lost an estimated US$50 billion worth of investments due to uncertainty created by the non-passage of the PIB.
“This administration believes that the timely passage of the Petroleum Industry Bill will help our country attract investments across the oil and gas value chain.
“In view of the value our nation and investors will derive from a stable fiscal framework for the oil and gas industry, our administration has found it necessary to work with the two chambers of the National Assembly to ensure the passage of the PIB,’’ he said.
Meanwhile, the Progressive Governors Forum has commended President Muhammadu Buhari for assenting to the PIB, saying it will facilitate investments in the sector.
The chairman, PGF and Kebbi State governor, Atiku Bagudu, made the remarks yesterday.