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PIB and Alison-Madueke’s midas touch

THE  first time I came across Mrs .Diezani Alison- Madueke, the first female to be  appointed Minister of Petroleum in Nigeria and in the entire African continent was in 2007 on the Lagos- Ibadon Express Way.

I was with TheNews magazine at the time and was travelling from Lagos to Akure, Ondo State capital to do a story on the governorship tussle in the election tribunal between Governor Olusegun Mimiko and his predecessor, Dr. Olusegun Agagu.

And suddenly, I saw Madueke, who was Minister of Transport at the time crying profusely.  She had taken time out of the comfort zone of her office to do on the spot assessment of major roads in the country and the Lagos Ibadon road which had become a death trap.

She saw Nigerians suffer and she wondered why the ordinary people on whose palms sovereignty lies die like rodents on the road which ordinarily should have been on nylon tiles considering the enormous resources allegedly spent on it by the previous administration.

For me, the tears flowing from her eyes down her maxilla showed her connect with the ordinary Nigerians who are common victims of road accidents which regrettably have killed more Nigerians than all killer diseases put together.

This encounter endeared me to this amazon who had carved a  niche for herself in the oil and gas sector in Nigeria and in the international community. Little wonder that she is the first woman ever to lead a Nigeria delegation to Organisation of Petroleum Exporting Countries (OPEC) to Vienna in Austria in 2010 and the first Nigerian woman to be conferred with  an honorary doctorate degree by the Nigeria Defence Academy (NDA) for excelling  in a field that is strictly a men’s world.

So I was not surprised that President Goodluck Jonathan retained Madueke as Petroleum Minister in the face of unfounded calls for her head. And with the recent presentation of the water-proof Petroleum Industry Bill (PIB) to the National Assembly for passage by the Executive Arm of government, the Bayelsa born technocrat has added another feather to her cap.

It is true that she is not the first to moot PIB but Madueke is clearly the architect of this new-versioned PIB and mid-wifed it to maturity, in spite of the distraction by enemies of reforms.

She achieved this by rallying round all the stakeholders in oil and gas industry including the malignant Oil Producing Companies (OICs) through dialogue, wide consultations with Nigerians across board and the engagements of the  media and civil society, the result of which is a brand new PIB that in the words of the minister addresses the concerns of OICs and engenders a win, win situation for Nigeria, Nigerians and the IOCs alike.

This new PIB which is adjudged to be pro-Nigeria because of its rich local content is divided into eight broad parts and four schedules couched in 226 pages with 365 sections to make interesting reading.

The Minister must be praised for securing the buy-in of the IOCs in the new PIB. It will be recalled that IOCs had surreptitiously frustrated the passage of the earlier bill in the defunct sixth National Assembly on grounds  that it was insensitive to  their strategic  interest.

They, for example claimed that the old PIB amongst other things, compelled them to pay mind-boggling and unrealistic  royalties and taxes to the Federal government through the Nigeria National Petroleum Corporation (NNPC) and feared that if passed into law, it would freeze them from business. Some of them like Shell Petroleum Development Company (SPDC), Chevron, Mobil, etc even threatened to vacate the shores of Nigeria for neighbouring countries like Ghana, Niger, Angola and so on that now have oil in commercial quantity.

No responsible government would allow them to leave as that would cripple oil exploration, exploitation, refining, and revenue profile of Nigeria. So government was in dare need of solution to keep the IOCs in the country and a Diezani had to come to judgement by deploring her sterling leadership qualities and persuasive skills.  The Minister quickly addressed the issues of royalties, taxes and licenses in such a manner that the interests of the IOCs are protected in the new PIB. And before the skeptics and cynics could say Nigeria, the minister talked the IOCs into it and they flew with it!

If the bi-cameral Nigerian legislature as expected by Nigerians passes the PIB into law as quick as possible as promised by Senate President David Mark, the administration of oil and gas  sector will be transparent and accountable to the public and the pricing of petroleum products in the downstream sector will be completely deregulated with more indigenous  participation. Deregulation will amongst other things create fair market value for petroleum products in the Nigerian economy, make enough products available by removing artificial scarcity and ultimately remove economic distortions.

If critics thought the new PIB would be insensitive to the Niger Delta, the region that produces the golden eggs, then they were dead wrong. The Minister ensured that the PIB provides  for the setting up of a Petroleum Host Community Fund which compels oil companies to surrender 10 percent of their profits from upstream activities for the development of the oil producing communities as more and more Niger Deltans especially the youths will be gainfully employed. This I believe will complement the activities of the Niger Delta Development Commission (NDDC) and quell youth restiveness in the area. The PIB further protects the environment, terminates oil flaring and makes it punishable by law! Rather the hitherto flared gas will now be exported to developed nations in dire need of the product hence creating another window for the inflow of revenue into the economy and hence signaling the implementation of the gas master plan.

The Department of Petroleum Resources (DPR) and Petroleum Products Pricing Regulatory Agency (PPPRA) which had become the butt of many jokes in pepper soup joints are to be scrapped if the new PIB sails through. They are to be replaced with Petroleum Technical Bureau and the Downstream Petroleum Regulatory Agency with in-built measures to curb malfeasance and waste.

EQUALLY interesting is the fact that NNPC is to be unbundled into three companies – National Oil Company, National Petroleum Assets Management Corporation and National Gas Company.

To further give the public a say in the oil and gas sector, Nigerian investors are to have 30 percent equity in the National Oil Company and 40 percent in the National Gas Company within six years from the date of incorporation.

Parts of section 150-152 of the PIB read: ‘‘The Minister of Petroleum shall, not later than three months after the effective date, take such steps as are necessary under the Companies and Allied Matters Act to incorporate  the National Oil Company as a public company limited by shares, which shall be vested with certain assets and liabilities of the NNPC.

At the time of its incorporation, the initial shares of the National Oil Company shall be held by a nominee of the Ministry of Petroleum Resources and Ministry of Finance incorporated on behalf of the government…”

The PIB insulates the National Oil Company from the hammer of the Fiscal Responsibility Act 2007 and the provisions of the Public Procurement Act 2007.

The bill also makes it mandatory for government to, within six years of the incorporation of the National Oil Company divest up to 30 percent of the authorised shares of the company to the public in the Stock Market transparently.

If the National Oil Company is incorporated, the assets and liabilities held by the NNPC on behalf of the Federal government except the interests in the unincorporated joint ventures and Nigerian Gas Company Limited shall be vested in the National Oil Company within 12 to 24 months from the effective date.

The transfer of liability or obligation under the section stated above frees the NNPC from the liability or obligation as far as the transferred assets are concerned but the National Oil Company can defend or enforce all obligations for or against NNPC as if it is the original party to such obligation in the event of majeure or default.

The PIB provides for a National Petroleum Assets Management Corporation as a holding company which will operate fully on a commercial swing.

Consequently, the Corporation will have power to (a) enter into contracts and incur obligations; (b) acquire, hold, mortgage, purchase and deal with all types of property; (c) establish and maintain subsidiaries for the discharge of its functions as the Corporation may determine and so on.

Similarly, the sections allow the Downstream Petroleum Regulatory Agency to oversee tariffs to prevent hijack of deregulation by exploitative marketers. Aside this, the agency will oversee transportation of pipeline, bulk storage of petroleum products at designated depots.

In spite of this power conferred on the agency, PIB empowers all marketers to establish loading facilities, jetties and own independent pipelines and depots to create a level playing field for all players in the oil and gas sector.

One salient provision of the PIB is that it gives absolute power to licensed oil marketing company, bulk consumer of petroleum products or independent refineries to construct  and operate independent pipelines, depots or jetties for their exclusive use.

A deep study of the crux of the NNPC reform embarked upon by Alison-Madueke is to reposition the corporation in such a way that it is  more transparent and profit-oriented so that it could generate more funds for the federation thereby dispelling rumours of NNPC’s insolvency, alleged sharp practices and inefficiency.

The reforms will equally make the corporation to be at par with its counterparts in other oil- producing countries like the Petrobras of Brazil, Aramco of Saudi Arabia and Petronas of Malaysia. The implication of this is that NNPC will declare  more money for government to develop the country.

Nigerians and the National Assembly must rise up in unison to own, fly with the PIB and chart the course of our collective destiny by ensuring that the PIB is expeditiously passed into law. It is by so doing that the name of the seventh National Assembly will be written in gold. It is by so doing that there will be more money to meet the Millenium Development Goals.

All men of good will, civil society and media must sustain the support for the bill that seeks to revolutionise the downstream sector. Neither the baby nor the bath water should be thrown away since this version of the PIB has received the endorsement of majority of Nigerians, the critical stakeholders in the oil and gas sector, civil society and the popular media.

>> The insinuation by a few individual and a section of the  Abuja press that the PIB vests too much power on  Alison-Madueke should be discarded.

The issue at stake is not about her or President Jonathan but about our destiny as a people and institutional reforms of the sector which we all desperately desire. In any case, Alison-Madueke will not be Minister of Petroleum till eternity, many will still come after her. So Nigerians should not allow the thunder of the minority to cow the ovation of the majority as far as the PIB is concerned.

Mr. FRANCIS OTTAH-AGBO, a public affiars commentator, wrote from Abuja.


Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.