Business Hilights
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Onovo picks holes in passed PIGB, says it’ll be very expensive to implement

Whereas many Nigerians have welcomed the very first segment of the Petroleum Industry Bill (PIB) which is called the Petroleum Industry Governance Bill (PIGB) being passed by the 8th Senate, Thursday last week, critical industry experts have started picking holes from the new law.

It would be recalled that the tortuous journey of the emerging law at the National Assembly in the last 17 years has yielded first fruit at the Senate even though more is expected from the lower House on the matter.

Otherwise, the Senate has passed the first part of the PIB which is the Petroleum Industry Governance Bill (PIGB), remaining another two.

The two more part of the PIB include the Petroleum Industry Fiscal Bill and the Host Community Development Bill.

Besides, none of these bills including the recently passed PIGB can become law unless the lower chambers, that House of Representatives do pass the same bills.

In an exclusive interview with former Presidential aspirant and energy expert, Chief Martin Onovo, he described the PIGB as not only going to be very expensive to run as passed, but will not tackle the issue corruption and engender massive investment which were the key factors considered ab-initio to redraft a new petroleum law for the nation.

Explaining more on why the PIGB may not hit the target as expected, he said “The first thing is that Nigeria wanted to solve a problem of uncertainties in the fiscal regime for investments. Have you solved it with PIGB, no?

“Second is that what the Senate has done is invoking a very expensive load organizational adjustment. Do we need such expensive reorganization the implementation of bill will cause, I don’t think so.

“Recall that the target we are trying to hit is to stop corruption. We do not need an organizational adjustment to fight corruption in the oil sector.

The real problem with the NNPC which you may not hear from any other mouth except me is that the political leadership whether you like it or not.

“Whatever that has been wrong with the NNPC is not the size, it is the political leadership.

This is so because the NNPC corporate leadership is is directed and tailored by the political leadership.

“Now, look at it from this angle. Who is the chairman of the board of NNPC, it’s the Minister of Petroleum Resources who incidentally is the President himself.

NNPC is public entity which is under the political leadership of whoever is the president. The question for the PIGB is whether the Minister is no more the chairman of the board or the boards of the new breakaways?

“When a country continues to accept mediocrity, it gets mediocre performance. So the get it right, we need to first reject mediocrity when you are looking for performance.

We have to encourage excellence like the Acting president said.

This is not market talk; I have been in the industry since 1989.

Onovo averred that “A reorganization of the NNPC will not solve the challenge of corruption which the entire PIB aims to resolve. What will solve corruption in NNPC is an anti-corruption strategy”.

On the solution, the petroleum engineer argued that “Since Nigeria wanted a comprehensive law to manage oil resources, a simple compilation with certain amendments of the whole would have solved the puzzle and we can be proud owner of a one document PIB”.

“The balkanization will create more problems because there must be areas of conflict between the separate segments of the PIB which I do not know may be up to five at the end which is not even insight in this current national Assembly. Doing so will have solved about 70 per cent of the problem.

“The key problem in the oil sector is individuals defending their separate vested interests in the industry at the detriment of the national interest.

Too many Nigerians are using their individual ingenuity to defend their selfish interests while the national interest lags behind.

“No doubt, the law makers that decided to balcanise the original PIB have taken positions for their interests at the expense of national interests and that is what led to the segmentation of the PIB.

“Nigeria does not have enough people defending the national interest in every department of government including the National Assembly.

If we Nigerians come to realize how expensive the PIGB will be, everybody will be worried. Am talking of the actual naira cost, you will blink

Business Hilights recalls that the Senate President, Dr. Bukola Saraki while announcing the final passage of the Bill said “A Bill for an Act to provide for the governance and institutional framework for petroleum industry and for other related matters 2017, third reading being taken and the Bill is now read for the third time and passed”.

Business Hilights recalls that the Upper Chambers had divided the previously intractable PIB into three parts to make for easier passage.

The PIB is expected amongst other thing; make and create business environment for petroleum operations, enhance the exploration of petroleum resources for the benefit of Nigerians; optimize domestic gas supplies; establish profit driven oil entities; and create efficient and effective regulatory agencies in the petroleum sector.

The Senate made it clear during the final passage, saying the Bill when passed and accented to will also “create efficient and effective governing institutions with clear and separate roles for the petroleum industry”.

The key components of the PIGB are restructuring the NNPC by splitting the assets and liabilities of the corporation into two new commercial entities to be known as the National Petroleum Company (NPC) and the Nigerian Petroleum Asset Management Company (NPAMC).

There is also the establishment of the Nigerian Petroleum Regulatory Commission (NPRC) which will among other things ensure compliance with all applicable laws and regulations governing the petroleum industry.

According to the passed PIGB which is waiting for the corresponding passage at the lower House before the needed Presidential Accent, it will on becoming law, will provide for incorporation of the Nigerian Petroleum Liabilities Management Company (NPLMC) to hold assets including shares in the NPAMC and NPC on behalf of the federal Government.

In addition, the PIGB also establishes Petroleum Equalization Fund (PEF) which is expected to ensure efficient distribution of petroleum products throughout the federation.

However, the federal lawmakers felt that the passage remains a major achievement within the period.

Already, Nigeria Extractive Industries Transparency Initiative (NEITI) the oil industry watchdog has stressed that the PIGB will eliminate the loss of billions of dollars in the country’s oil and gas sector.

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