Passing the Petroleum Industry Bill (PIB) into law is necessary to attract investors for the production of the alternative fuel of N97 per litre. JOHN OFIKHENUA reports that unless Nigeria enacts the law, investments, job opportunities and peace will keep eluding the industry
FOR years, the near-success syndrome has always characterised the passage of the Petroleum Industry Bill (PIB).
However, the worst mirage of the great expectation was that of the 8th Senate when one of its components- the Petroleum Industry Governance Bill (PIGB) scaled through the National Assembly passage. But it failed to secure President Muhummadu Buhari’s assent till the end of his first tenure.
Worst still, the other parts of the bill could not fare that far. The three other components are the Petroleum Industry Administration Bill; Petroleum Industry Host Community Bill; and the Petroleum Industry Fiscal Bill.
In the 8th National Assembly, the high hope and efforts at enacting the laws still come to nought to the consternation of expectant stakeholders.
Just as every action and inaction has implications, the pains and pangs of the non-passage of the bills are the harsh realities that the players in the industry contend with daily. However, some lucky beneficiaries earn a living from the spoils in the industry. They fight with anything at their disposal to thwart the efforts of the supporters of the bill. This category of people triumphed over other proponents of the PIGB.
It comprises members of staff of different parastatals in the Ministry of Petroleum that is proposed for merger owing to overlapping roles with other agencies. Yet, another class is not comfortable with a new petroleum law because the restructuring would affect their questionable benefits. Indeed, pecuniary interests are the bane of the bill.
Meanwhile, the game has frozen investments from the industry since the existing ones do not adequately define the interplays and trends in hydrocarbons business.
Non-passage of the PIB has cast a shadow of uncertainty that scares investors from taking their Final Investment Decisions (FIDs) on some pending multi-billion dollar projects. Also, the situation has held fresh contracts in abeyance.
In his bid to unlock the investments opportunities that the lingering Petroleum Industry Bill (PIB) has held down, Minister of State for Petroleum Resources Timipre Sylva is supporting the National Assembly for the passage of the legislature before May 29 this year.
The absence of enabling laws will hinder Sylva from actualising his plans for the industry.
The minister, who spoke with reporters in Abuja, said: “The petroleum industry has not moved very far in Nigeria for some time now. And I am the first to admit it because a few years ago, in my first incarnation in the Ministry of Petroleum, we were already producing as a country over two million barrels a day. And we had a projection to move our production to three million barrels a day and four million barrels a day by this time.
“At that time, at the same time, the UAE, for example, as a country, was producing 2.7 million barrels a day or thereabout. Today, the UAE has moved on to produce up to four million barrels a day.
“From 2.7 million barrels a day of that time, they have moved the industry to four million barrels a day in the UAE. We would have been very lucky if we were even stagnant in this country but instead of being stagnant we have even gone backwards. Today, we are producing, according to OPEC quota, 1.774 million barrels.”
He said the passage of the bill would help with the plan to have the Compressed Natural Gas (CNG). The new law is expected to give the necessary assurance and incentive that the off-takers look out for.
His words: “The second one will be to improve the relationship between this industry and the man on the street. A lot of Nigerians on the streets do not have any other relationship with the industry other than at the pump. You go to the filling stations, they buy PMS (petrol) or diesel or they go and get gas to cook. That is their relationship with petroleum.”
Stressing how to cultivate and nurture a better interplay with the least person in the country, he vowed that “we want to improve that relationship with the common man by making jewels more accessible and more affordable. We will go into all this over time but at this moment let me just give you a few of the things that we intend to do this year so that you can have them as a basis for interaction for the rest of the year. Number one, we want to progress the consideration and passage of the overall petroleum legislation.”
According to him, a pilot project in Benin City, Edo State has proved that the CNG is cheaper than petrol. Besides, being green energy, the gas is sold for about N95 to N97 per litre while petrol has a pump price band of N143 to N145 per litre. The experimentation of the gas has recorded a huge success in Benin-City, Edo State where it is used to fuel over 10, 000 transport vehicles.
He observed that an expansion of the CNG Programme would create more jobs for the masses and relieve them of the anxiety emanating from petrol price increase news.
On how the ministry is going to bring the masses close to petroleum, Sylva said: “We are thinking of reducing pump price of fuel. I could easily say yes and I am sure all of you will wonder why I am saying that. Why I should say yes is that we are thinking of giving the masses an alternative.
“At present, we are all hooked on PMS. What we want to do going forward is to see that we can move the masses to CNG cars… Currently, everybody clamours, poor people, agitate when the Federal Government mulls the idea of an increase in price. And of course, we all agree that it has continued to be a drain on the finances of Nigeria because, when you spend so much to subsidise fuel and the process itself is being manipulated by all kinds of unscrupulous elements, there is a big drain on the finances of Nigeria.
“But we also recognise that it is the only point of contact between the oil industry and the masses. So, what are we going to do? What we decided is that we should try to give the masses an alternative. If we move the masses to CNG, that is taking transport vehicles in the first instance for example, out of the PMS loop and take all those transport vehicles to be using CNG, then you will see that that is the point of contact with the poorest of our population.
“We believe that if you even further take out a lot of people from the loop of PMS. Now CNG, unit for unit, costs less than even the subsidised PMS per litre. The subsidised rate of PMS is 145 naira per litre. CNG will cost about 95 to 97 naira per litre. That is why I said that we could say we want to even reduce the cost of fuel. That way, we believe that we have given an alternative and if Nigerians get used to the alternative, they will not even notice when the subsidy on PMS is removed.
“That is the alternative we are working on and we will start very soon to roll out. Already there is a pilot programme in Benin-City and that pilot programme has worked for a long time and about 10, 000 vehicles are already on CNG in Benin-City.
“So, we want to expand that CNG programme across the country and we believe that it is going to create a lot of opportunities for Nigerians and also give Nigerians a new lease of life because they will be accessing their jewels cheaper.”
The ministry gas plan, which transcends the deepening of domestic utilisation and monetisation, is targeted at increasing the sector’s contribution to the nation and world Gross Domestic Product (GDP). The plan is based on the fact that natural gas can transform economies. He cited examples of Qatar that has the world’s highest GDP per capita, that its growth is anchored on natural gas.
The minister added that Saudi Arabia has positioned itself as the world’s hub for petrochemicals, creating significant job opportunities and enabling industrialisation of the country. Meanwhile, Nigeria’s gas reserve is significant. It currently has an estimated 202 TCF with potential for up to 600 TCF in undiscovered resources.
Sylva added that “with the undiscovered potential, Nigeria could be in the same league as Iran, Qatar, Saudi Arabia and Russia. Recognizing the potential of our enormous natural gas resources and the unprecedented growth in domestic gas demand, the Federal Government, through the Ministry of Petroleum Resources, over the years, has championed various interventions to stimulate gas utilisation and monetisation.
Part of the transactions that the Federal Government has suspended owing to the non-passage of the PIB is the commencement of the bid round for new acreages. The Federal Government must have the law in place before conducting a major bid round for oil blocks. Already the ministry is looking forward to conducting the bid round for marginal fields this year.
Sylva said: “We are aiming at conducting bid rounds for marginal fields and opportunities within 2020 to ensure settlement of dispute partners and pave way for FID on major capital projects. New acreage management and bidding process are thoroughly elucidated in the upcoming PIB. It is therefore highly desirable that the bill is passed before any bid round.
“This is one of the reasons we implore Nigerians to support us in our quest to pass the bill in earnest. We will aim at the marginal field round earlier but the major bid round will have to come after the passage of the bill from PIB.”
He revealed that the team working on the PIB is at the final stage for the harmonisation of all the existing actions from 2, 000 to date, through 2009, 2012 and 2018. The team, he said, is bearing in mind the concerns raised by the industry players to create an enabling environment for investors.
Sylva, who counted on the harmony between the executive and the legislative arms of government, submitted that “we are optimistic that both the Petroleum Industry Governance Administration and Host Communities Bill on the one hand and the Petroleum Industry Bill, on the other hand, will be passed within the first anniversary of this administration.”