The Petroleum Industry Bill (PIB) in its present form is too complex for a country like Nigeria and may need to be broken into a manageable state to have an easier chance of passage before the National Assembly, says Diezani Alison-Madueke, minister of petroleum.
“The law is not in my purview, it is with the National Assembly, so I cannot proffer or implement certain solutions right now, but it might have been better to break it into a manageable state to allow it move forward,” Alison-Madueke said at the World Economic Forum (WEF) Africa in Abuja, on Friday.
The PIB aims to unify all the necessary legislations in one bill and provide a clear framework for investment in Nigeria’s energy sector, as well as to split the Nigerian National Petroleum Corporation (NNPC) and model it after a national oil company such as Petrobras of Brazil.
The bill’s fiscal terms, which have been described by major multi-national oil and gas companies as uneconomic, would tax deep offshore oil production at 74 percent, higher than Angola’s take of 72 percent.
The PIB has been stuck in Nigeria’s notoriously unproductive parliament for more than three years, while the oil sector struggles from a slowdown in investments from majors and hurting government finances in the process.
Passing the PIB could help reverse the lack of growth in Nigeria’s oil sector which has seen investment of at least $28 billion lost or deferred since 2010.
The National Bureau of Statistics (NBS) rebased GDP figures show that the value of oil and gas production for 2013 declined to N11.55 trillion post rebasing, compared to N13.75 trillion in the old data series. Oil’s contribution to GDP also fell to 14.4 percent from as high as 32 percent earlier.
“With the oil sector accounting for 75 percent of government revenue and 95 percent of exports, the reduction in oil exports adversely affected the fiscal and external positions in 2013,” the IMF said in an April 2014 report.
Alison-Madueke also said at the WEF Africa that the Federal Government would next month shut down two gas plants for repairs, which would reduce gas supply to power generating companies (Gencos) and cause a drop in electricity supply in the country.
The repairs of the existing infrastructure will take about two weeks, said the petroleum minister, assuring, however, “We will be coming out very clearly to let Nigerians know, as it happens, and inform them when it goes back up. When this happens, it will increase the gas supply and increase power supply.”
She said the repairs were being done to ensure that over the next months, the plants would supply enough gas through creative means to give some stability and increase power supply.
According to her, the NNPC is currently auditing its various processes to ensure that the corporation finds and stops any gap or leakages that may be inherent in the system, which may have probably existed for the past 20 years.
“The time has come when we look at that clearly, so we can put solutions into play because we must create a much more accountable process in our national oil business as it relates to incoming and outgoing revenues,” she said.
Speaking on using the WEF to sensitise the international community on stolen crude, which she said had been mentioned at every forum, Alison-Madueke said there was now a very clear framework called STEM (Security, Transportation, Environment and Monitoring), which tackled issues related to the theft of crude, bunkering and sabotage of pipelines.
“This framework that is being put in place is bringing stakeholders from other countries to look at the issues of bunkering and theft,” she said.
The experts, she said, were working with the NNPC to see how the nation could find and aggressively implement solutions to the scourge in Nigeria, adding, “In the next three months, we will begin to implement the solutions they have brought to the table, we must bring this problem to a manageable position.”
DANIEL OBI & PATRICK ATUANYA
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