By Clara Nwachukwu

The Bureau of Public Entreprises, BPE, has called for the recall of the 2009 version of the Petroleum Industry Bill, PIB, saying it is the least controversial among the various bills so far introduced to the National Assembly for passage into law.

The BPE’s latest advocacy throws up a new twist to the legion of calls for the passage of the PIB, which had been enmeshed in controversies since its introduction by the former President Olusegun Obasanjo’s administration.

The call, which was contained in a statement from the Bureau yesterday, is in addition to its suggestion for the abolition of the role of the Nigerian National Petroleum Corporation, NNPC, as both a regulator and an operator, as currently perceived.

The Acting Director-General, BPE, Dr. Vincent Onome Akpotaire, argued that since the 2009 PIB approved by the then Federal Executive Council, FEC, “had no controversial provisions, and having had the benefit of review by stakeholders, should be represented with necessary adjustments to reflect the current realities in the sector to the National Assembly for enactment.”

He identified some of the strong points of the 2009 PIB to include: to promote transparency and openness in the administration of the petroleum sector in Nigeria; separate the commercial institutions in the sector from the regulatory and policy making institutions; deregulate petroleum product prices; increase domestic supply; and put in place a fiscal framework for increased revenue.

Akpotaire, who made the call at the ongoing National Stakeholders’ Workshop on, Petroleum Industry Reform, in Abuja, based his recommendations on the seeming shortfalls of subsequent versions of the PIB presented to the lawmakers.

According to him, “The challenges we are facing today were envisaged by the BPE over 10 years ago, hence the articulation of the Petroleum Sector Reform and the first ever drafted, Petroleum Industry Bill, PIB; and for over a decade, we are still talking about the problems rather than the solution.”

He added that the reform was meant to enthrone international best practices in the sector, one of the reasons the National Council on Privatisation, NCP, in 2009, through the FEC sent the PIB to the National Assembly.

PIB controversies

Akpotaire accused the Ministry of Petroleum Resources of stalling the first attempt to pass the 2009 PIB after it had passed through the first and second readings and subsequently tabled for public hearing.

He alleged that this happened because “the Ministry had introduced additional legal and regulatory provisions for a third regulator for the midstream petroleum sub-sector as well as other ancillary provisions” that were allegedly omitted in the FEC’s approved draft Bill.

He regretted that this consequently led to the redrafting of other versions of the PIB, which he noted were in conflict with the NCP’s reform mandate and the globally accepted framework in the sector.

In the 2012 version for instance, Akpotaire highlighted some of the contentions as:

• Part 1 of the 2012 PIB as ambiguous, as it does not expressly state who will drive the sector (i.e. public or private sector). This could affect private sector confidence, especially with the powers the Bill seeks to confer on the Minister as well as the huge new National Oil Company;

• In part 11 of the Bill relating to the role of the Minister particularly sections 6(g), 6(h) and section 8(6) in which the minister is the final authority on purely regulatory matters. This could be overbearing, discretionary and could lead to conflict of interests/executive abuse;

• Section 152 (10) seeks delisting of the NNPC enterprises listed under the Public Enterprises Privatisation and Commercialisation Act, and the vacation of the power of Attorney earlier granted the BPE. It amounts to back-door amendment of the Public Enterprises (Privatisation and Commercialisation) Act 1999, and invariably halting the Federal Government’s divesture of its shareholding in the refineries, Nigeria Gas Company (NGC) and Petroleum Products Marketing Company (PPMC); and

• The power of appointment, discipline and removal of the heads of the proposed regulatory agencies resides with one arm of the Government, whereas it ought to be that the functions be subjected to an approval process by another arm of Government, as it is obtainable in the Electricity Power Sector Reform (EPSR) Act 2005, and the National Communications Commission (NCC) Act.

Similarly, he said the 2015 version of the PIB, which is privately sponsored, is outlined in only two parts, which were not properly structured.

According to him, the 2015 PIB “creates an Asset Management Company, creates a Frontier Exploration Services, does not state who carries out the implementation of the reforms in the Oil and Gas Sector; and also does not state who manages the funds on behalf of the Petroleum Host Communities Fund (PHCF).”

Separation of powers

With regard to the dilution of the NNPC powers, Akpotaire canvassed for the separation of the roles of the regulator from the operator and policy formulation currently vested in the NNPC.

In a paper titled: The Petroleum Industry Reform in Nigeria: Reinventing the Wheel by Innovation,” which he presented at the workshop, the BPE boss noted that the Directorate of Petroleum Resources, DPR, which ought to be the regulator is an arm of the NNPC in the present arrangement.

In his opinion, “the NNPC currently acts as the policy maker, the regulator as well as an operator of the policies which go against international best practices.”

PIB 2016

Meanwhile, even the new bill titled, “The Petroleum Industry Governance Bill,” the first of the four versions of the PIB to be introduced to the legislators, has already suffered its fair share of controversies, mainly related to the place of the Host Community Fund, in the new dispensation.

Rather than being expunged the PIB as erroneously believed, the fund will form a part of the last of the four new bills, the original PIB had been split into.

Vanguard had exclusively reported in April that the Petroleum Industry Governance Bill before the legislators is one quarter of the bills they will be considering, the other three being, the Fiscal Regime Bill; the Upstream and Midstream Administration Bill; and the last, the Petroleum Revenue Bill.