In response to criticism from experts in the oil and gas industry, the Presidency has denied reports President Muhammadu Buhari’s refusal to sign the Petroleum Industry Governance Bill (PIGB) was due to a reduction of his powers and on advice from some ministers.
Senior Special Adviser to the President on National Assembly Ita Enang, however, denied the reports and gave three reasons for the President’s refusal to assent to the bill, namely.
- The provision of the bill permitting the Petroleum Regulatory Commission to retain as much as 10 percent of the revenue generated could affect FAAC allocations.
- Expanding the scope of Petroleum Equalisation Fund (PEF) was at odds with the administration’s policy.
- Some legislative drafting concerns which, if assented to in the form presented, will create ambiguity and conflict in interpretation.
What is the PIGB ?
The Petroleum Industry Governance Bill (PIGB) is one of four bills carved out from the Petroleum Industry Bill (PIB). The PIB was split in order to fast track the necessary reforms, having been stalled at the National Assembly since 2008. The other bills are the fiscal regime bill, upstream and midstream administration bill, and the petroleum revenue bill.
The reasons may not hold much weight
A closer look at the President’s concerns, however, signal they may not have warranted his refusal to give assent.
Here’s a copy of the PIGB again so that you can read it for yourself https://t.co/s0XMSOz0ts Particularly pay attention to pages 13 to 14, sections 1 to 6. The 10% has nothing to do with government oil revenue shared as FAAC. Instead it deals with revenue from fees and licenses
— Dolapo Oni (@Dolarpo) August 30, 2018
publications sold, fees for services rendered by the NPRC to non-petroleum companies and only 10\% of this fund is to be kept by the NPRC
All other monies made from production, leases, bonuses and etc are to be paid into the Federation account. Read no 6. It is clearly stated.
— Dolapo Oni (@Dolarpo) August 30, 2018
Please i would like to ask if someone can point me to where this regime has articulated its policy for an independent PEF.
Dont worry i checked the National Petroleum Policy. The PEF is mentioned only once and in passing.
When we find this, we can discuss the second topic…
— Dolapo Oni (@Dolarpo) August 30, 2018
The wording of the PIGB has some legal issues is the final point. The presidency has to do better and show us where these are.
Dont forget this is a document that has gone through several public hearings with all industry stakeholders over several weeks
If you missed those…
— Dolapo Oni (@Dolarpo) August 30, 2018
…public hearings, you can read up on all of them here on https://t.co/en3qXX8BvO – wonderful website by the law firm Odujinrin & Adefulu. All the points made by every major stakeholder is noted for reference.
Not once did this issue of wording come up but heck….
— Dolapo Oni (@Dolarpo) August 30, 2018
Implications of the non-passage
Investments in the country’s oil sector will stall due to the non-passage of the bill.
Crude oil revenue is a key driver of Nigeria’s revenue and a slump in 2015 pushed the economy into recession. Softness in the oil sector partly contributed to the decline in GDP growth from 1.95% in the first quarter of 2018 to 1.50 in the second quarter of the year.
