FG omits IOCs, local oil producers in consultations over revised PIB

The Federal Government has re-introduced a revised version of the Petroleum Industry Bill (PIB) which lawmakers are expected to pass into law before the end of the year, but unlike in previous versions, the input of oil sector operators was not sought in drafting it, which could impact both quality and quick passage.

This puts at risk a smooth passage of the bill because it could be subjected to protracted delay when it progresses to public hearings as part of the legislative process and operators, with a better grasp of reality, present genuine concerns based on their experience.

“The Oil Producers Trade Section (OPTS) and independents have not been consulted or sent a copy of the draft bill,” said Imo Itsueli, chairman of Dupri Oil, during a webinar organised by the Nigeria Natural Resource Charter (NNRC), a non-profit in the extractive sector, and BusinessDay Media Ltd, on stakeholders’ expectations for the new PIB.

Itsueli said that complications could arise if oil sector operators with experience of how the industry functions raise significant issues not thought of by the ministry and this could lead to further delay of passage of the revised bill when the current version is found to be unfit for purpose. Nigeria has been unable to pass a holistic petroleum industry bill for over a decade.

This contradicts an earlier comment by Timipre Sylva, minister of state for Petroleum Resources, that broad consultations would be undertaken once the process of passing the bill is completed.

Sylva, in an interview over video conference with Kadaria Ahmed, veteran journalist, which aired on Channels Television on August 2, said the revised PIB was going to be sent to the National Assembly within two weeks.

He further said that in order to prevent previous delays in the passage of the bill, the government has embarked on broad consultation with stakeholders to arrive at a bill that would not be encumbered in the National Assembly.

The OPTS and independents produce the bulk of Nigeria’s crude oil and pay the royalties and taxes, and are part of different commercial arrangements like joint ventures with Nigeria’s state-owned oil firm, the NNPC, and so are considered critical stakeholders.

It is not clear who the ministry has been consulting with because local oil producers say they have only seen versions of the bill floating around but without official communication from the Ministry of Petroleum Resources, and so they cannot be said to have participated in the process.

Experts on the video conference including Isreal Aye, an energy lawyer, Joseph Nwakwue, chairman of Society of Petroleum Engineers, Najim Animashaun, a respected policy adviser and energy lawyer, did not attest to any engagement with the Federal Government in drafting the revised PIB.

The revised PIB is an executive bill prepared by the Ministry of Petroleum Resources, unlike the previous version which was drafted by members of the previous National Assembly.

Unlike the previous version which separated the various aspects – governance, fiscal, administration, and host community – the revised version combines all the segments into one omnibus bill.

The revised PIB is currently with the Justice Ministry to ensure that its provisions do not conflict with the existing legislature. After this review, it would be sent back to the National Assembly to continue with the legislative process.

The PIB was first introduced over a decade ago but its passage has been delayed. The 8th National Assembly successfully passed the governance aspect of the bill but President Muhammadu Buhari refused to assent the bill.