By Michael Eboh & Sebastine Obasi
The Federal Government, Tuesday, stated that until all the components of the Petroleum Industry Bill, PIB, are passed by the National Assembly and assented to by the Presidency, no new licensing rounds for oil wells would be conducted.
Speaking in Abuja, at the Nigeria Extractive Industries Transparency Initiative, NEITI, symposium on the PIB, Minister of State for Petroleum Resources, Mr. Ibe Kachikwu, disclosed that the Federal Government would only award new licenses for oil production under new legislations.
Kachikwu, who was represented by his Senior Technical Adviser on Efficiency, Mr. Johnson Awoyomi, emphasized the need for transparency and clear policy direction in the Nigerian petroleum industry.
He said, “Finally, it is a national priority to have certainty and clarity over the operations of the petroleum industry as it will foster more licensing rounds, enhance revenues and increased economic activities.
“New acreages will be awarded for exploration and production under new laws and terms, especially offshore which is likely to account for much of the growth in the nation’s reserves.
“For too long we have waited for this moment with bated breath and sheer excitement, knowing that the bill will disentangle us from the manacles of inefficiency, low investment drive and opacity.”
Kachikwu said stakeholders must relish the urgency of the current stage at which the various petroleum bills are, stating that all hands should be on deck to making sure the bill achieves what it is meant to achieve.
“Getting to the yes on the PIGB is a great milestone, I am so glad we have begun heeding the clarion’s call,” he noted.
The minister lamented that the aggregation of laws which had governed the Nigerian oil and gas sector over the years had become archaic and no longer competitive and needs to be reviewed and harmonized into a comprehensive law.
He said, “After a critical study of the myriad of challenges on ground, we observed that crucial to the fixing of these problems lies in the question of the governance of the industry, and effort from the legal wing which could play a critical role in presenting a robust, effective governance and institutional framework for the management and regulation of petroleum resources in Nigeria.
“The role of the government needs to be better clarified by refocussing the mandate of the policy, regulatory and commercial institutions to ensure better sector governance, transparency of regulations and operations, accountability of the institutions and removal of opaqueness around the industry.”
Also speaking, Executive Secretary of NEITI, Mr. Waziri Adio, however, stated that passage and assent to the bill do not signify the end of the sector’s challenges, noting that the most crucial part aspect is the implementation of Bill when it eventually becomes law.
He said, “But we will be deluded to think the job is done. It is not. Succumbing to such a temptation will be wrong-headed and misdirected. And here we are not just talking about the need to finally pass the PIGB and transmit it to the President for assent. And not even about ensuring that the other three bills are passed and signed. It is more about ensuring effective implementation of the resultant laws in ways that will reposition and transform our oil and gas sector to become a real blessing, and not this needless curse, for our people.
“Our expectation is that we will address many of the questions that have been asked, including those yet to be asked, or at least set us thinking seriously about these questions. Some of these include: what transitional arrangements are being contemplated? What is the plan for the fiscal, host community and administrative bills?
“How do we create a Pareto optimal equilibrium between revenues for government and returns for investors on one hand and among the geo-political zones on the other? How do we ensure that the new institutions created by the bills do not end up as replicas of the existing ones, or even worse? How do we use the proposed laws to embed contract disclosure and beneficial ownership and other new frontiers of openness? And what will success look like?”