‘PIB may not be passed in 2015’

The passage of the Petroleum Industry Bill (PIB) may have to wait much longer and possibly for the in-coming 8th National Assembly, as the current legislature winds down with many unresolved electoral issues confronting it. The shift in the election dates has further eclipsed hopes and any possibility that the bill would be passed before the end of the current legislative term. “I am very pessimistic that the PIB will be passed before May 29, 2015. With the elections now postponed to March 28 and April 11, there is not enough time for the bill to scale the necessary procedures for passage. Granted that the bill could be given an accelerated process, but I do not see this happening”, Wesley Omonfoman, an energy analyst, told BusinessDay.

Going by the fact that over 70 percent of the current National Assembly members may not return to the House, analysts believe that if the PIB is not passed before the end of the current legislative session, it may take much longer, possibly beyond 2015 before it could be passed. This is on the assumption that the new legislative session would focus on issues of screening political appointees and possibly considering fiscal issues like a supplementary budget before delving into pending and new bills. The reopening of legislative debate on the bill will also depend on who emerges as the president. RTL Advisory Services in a recent report stated that the PIB would be passed faster under Jonathan, if re-elected, than under Buhari, as there is a likelihood that a Buhari presidency would want to re-negotiate the PIB, which might entail changes in the bill and starting all over again.

Beside all these, there are diverse views on certain aspects of the bill. According to Omonfoman, “The PIB has significant short-comings, particularly with the fiscal terms relating to gas development and monetisation. “Gas development is vital to sustaining the power sector, currently crippled by significant shortfalls in gas supply. My recommendation would have been that the current fiscal regime and incentives for gas development and the gas-to-power projects are maintained and/or put in place for the next five years, after which the provisions of the bill can take effect.” “An example is the Affordable Care Act or Obamacare which was passed in March 2010, but major provisions of the bill came into effect in 2014 and other provisions will come into effect in 2020. “However, it will be wonderful if the bill is passed regardless of its imperfect nature, as the passage will end the uncertainties in the upstream oil and gas sector, and will allow investors and operators make final investment decisions (FID) on key upstream projects,” Omonfoman said.