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Utomi, others warn FG on oil bill

By Tordue Salem
Political economist and Director of Lagos Business School, Professor Pat Utomi and other stakeholders in the oil and gas industry, yesterday, urged the Federal Government to exercise caution over the controversial Petroleum Industry Bill.

Utomi, who spoke at the National Assembly yesterday, while the public hearing of the joint committees on Petroleum and Justice was going on, said the bill neglected very knotty economic variables and political considerations.

According to him, issues such as “occupational health and safety” as well as the global issue of “climate change” and the future of the environment, should have been taken into account by the bill.

He said as a sector that was prone to accidents, he expected that issues of health and safety should have been well treated in the bill.

“Something that is missing from this bill is an occupational health and safety segment and this is a deficiency that I would like to be addressed. I think also that we should address the issue of climate change,” he said

“At a time when carbon trading is going on and people are saying you can profit by selling your emission rights to other countries that are emitting so much more, it is sad that we are not addressing this issue for the sake of future generations.”

Utomi also faulted clauses in the draft bill, seeking “too much” discretionary powers for the minister.

The Oil and Gas Service Providers Association of Nigeria in their submission at the hearing on the bill, declared that the non-inclusion of their interest in the bill may spell doom for the planned reform in the oil and gas sector.

In the presentation made by their National President, Mazi Colman Obasi, they warned: “That this omission, if allowed, could mark the beginning of the failure of the reform being envisaged by the government and the administration of President Umar Yar’Adua.

“All the technologies, machineries, technical and intellectual skills, knowledge, competencies and funds to finance projects and services in the industry are owned and provided by service providers without which nothing functions in the industry,” it said.

The association also requested for the inclusion of their members in the board and governing councils of nine agencies, including the Nigerian Petroleum Directorate, Nigerian Petroleum Inspectorate, the Petroleum Products Regulatory Authority and the National Petroleum Assets

However, the government of Rivers State while presenting its official position on the bill took an extreme position saying: “we propose that the Bill be withdrawn and completely redrafted to ensure respect for the component parts of the federation, fair play and equity.”

According to the state, 25 per cent royalties from oil and Gas must be paid to states and communities where the oil is from.

The state is also asking for 25 per cent of Petroleum Profit Tax as well as dividends /profits accruing to NNPC Limited and the International Joint Venture partners as well as all other taxes, licenses and fees.

“This will ensure adequate compensation to the states for their infrastructural deprecation caused by petroleum products consumption e.g. Lagos State.”

A total of 54 civil society organisations working in the extractive industry also presented their position at the hearing.

The organisations presented their memorandum under the aegis of Civil Society Organisations Working on Extractive Revenue Transparency, Accountability and Good Governance in Nigeria, recommended that the provisions in he Bill “should align with existing provisions in the Fiscal Responsibility Act, 2007 and other relevant laws.”


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