By Clara Nwachukwu & Sebastine Obasi
One of the issues that could frustrate the success of the Petroleum Industry Bill, PIB, is over-regulation of the industry, Mr. Osten Olorunsola, Director, Department of Petroleum Resources, DPR, has said, describing it as “a recipe for disaster.”
Olorunsola, who spoke with Vanguard on the sideline of the ongoing Offshore Technology Conference, OTC, 2013, said the Nigerian government was aware of the concerns on over-regulation.
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.
Managing Director/Chief Executive, Niger Delta Petroleum Corporation, NDPC, Mr. Layi Fatona, in his assessment of the prospects and opportunities of post-PIB, observed that rather than reducing the number of regulations, the 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.
“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 that has too many regulations is recipe for disaster. I think the National Assembly will look at that angle.”
Already, industry operators have accused some of the regulatory agencies of 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.
“The result is unprecedented costs and unnecessary operational delays due to strings of approvals.”
Asked if DPR was 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 said: “Even some of the extant regulators that have been around 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.”
On divergent views
Olorunsola maintained that there were a lot of opportunities in the new PIB, adding that even the divergent views would 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 at 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 or gaps are narrowing down.”
With regard to the ability of PIB to uphold national interest in the face of divergent views and interests, he argued that there were more areas of convergence than divergence in the bill.
… more convergence
Olorunshola said: “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 like to look at a cup as half full. Let us give attention to the 200 pages that we have convergence.”