Clara Nwachukwu and Sebastine Obasi
… Says more convergence than divergence in PIB
One of the issues that could frustrate the success of the Petroleum Industry Bill, PIB, is over-regulation of the industry, the Director, Department of Petroleum Resources, DPR, Mr. Osten Olorunsola has said.
Olorunsola, who spoke with Vanguard on the sideline of the ongoing Offshore Technology Conference, OTC 2013, said that the Nigerian government is aware of the concerns on over regulation, which he described as “a recipe for disaster.”
He, however, gave the assurance that government was looking into the issue and that the National Assembly, which is currently tweaking proposals in the bill will streamline functions for effective operations in Nigeria’s petroleum industry.
The Managing Director/Chief Executive, Niger Delta Petroleum Corporation, Mr. Layi Fatona, in his assessment of the prospects and opportunities of the Post-PIB, observed that rather than reducing the number of regulations, the new PIB instead increased the number of regulatory agencies.
He said the development will not only lead to increase in costs but also prolong the cycle of approvals, which may affect projects delivery in the industry.
Acknowledging the development, Olorunsola said, “It is true. It is an area that still has to be looked at, not from the point of what can be resolved in Nigeria alone, but actually looking at the benchmarks across the whole world. Apart from fiscals, one thing international investors look at is the robustness, simplicity and transparency of your regulation.
“The National Assembly is aware of that. I think they will look at it very well. However, in looking at it, we also have to take our local environment into consideration. The mere fact that there is only one regulator does not mean that we cannot have another two or three.
“The only thing is that it has to work. It does not have to become a bureaucracy to the industry. That is really the point. Any institution you have too many regulations, it is recipe for disaster. I think the National will look at that angle.”
Already, industry operators have accused some of the regulatory agencies as taking advantage of the situation, noting that “almost every government institution is finding a way to be linked to oil and gas because they feel that is where the money is and want to have a share, resulting in unprecedented costs and unnecessary operational delays due to strings of approvals.”
DPR’s role in the new dispensation
Asked if the DPR is not concerned that its role would be gradually whittled down on account of these new industry regulators, Olorunsola argued that the issue was being addressed in the new bill.
He further noted that “Even some of the extant regulators that have been around, they have been somehow addressed in the PIB. However, we have to wait until it becomes an Act. If it does not become an act, all of them may still continue to parade themselves as regulators.
“We have made our views known very well. In any case, we were part of the team that put the bill together as an executive arm. We have to wait and see the wisdom of the outcome from the National Assembly.”
Olorunsola maintained that there are a lot of opportunities in the new PIB, adding that even the divergent views would only help in strengthening the eventual outcome of the bill.
He said, “My view is that you cannot take away the importance of dialogue. The more we discuss and the more we share, the more the chances that we will get to a common ground as some point. In my view, I am quite happy with what has happened this morning. It shows there is still a lot of interest.
“Two, the mere fact that people are speaking their minds is even the important thing. If people keep quiet over their views, it does not help. It is nice that people came up with their views. And the key areas of gaps are narrowing down.”
With regard to the ability of the PIB to uphold national interest in the face divergent views and interests, he argued that there were more areas of convergence than divergence in the bill.
Olorunshola noted, “The bill has several hundreds of pages. The areas of divergence you are talking of are less than 10 pages. People have been repeatedly talking about these 10 pages, completely undermining the 200 pages that are areas of convergence. We should focus more around where we have actually agreed. People can choose to look at a cup half empty. I personally like to look at a cup as half full. Let us give attention to the 200 pages that we have convergence, but address these little areas that are remaining.
“In my view, there are three or four things people are still talking about. If they don’t talk about fiscal gaps, they talk about host communities, or institutional authorities. But there are several other parts we can actually run with today.
“We should not stop talking about these little areas that are remaining. In any case, after going through these for 12 years, if it is only three or four areas that are remaining, we can try and resolve it. My personal view is that we should not spend another 12 years trying to fix these three or four items. Where we are today, we are ready to go. I think half PIB is better than none.”