We need to rework PIB: President shouldn’t award oil blocs
Oil and gas expert, Dr. Emmanuel Egbogah, speaks with News Editor MARCEL MBAMALU
CONTINUED FROM THURSDAY 05\11\2015
Who were the others involved in writing the PIB?
Late Dr. Rilwan Lukman, who was the Minister of Petroleum at the time, was the chairman of the Oil and Gas Implementation Committee (OGIC) and I was his deputy. But, in a way, I did all the work because I was the adviser to the president on oil. So, we wrote the PIB, which is the legal and regulatory framework for implementing reforms in the oil and gas industry. This is because we need laws to make certain reforms. The Bill has not been passed till this day because, when we finished writing it, I suggested that we needed to go on a roadshow across the country to sell this reform agenda to people. It was not done, and that is why the thing has remained in the National Assembly.
But many think that oil and gas multinational companies are part of the problem, as they do not want the bill to sail through?
Remember that oil and gas companies in the country are businesses set up to make money. If you go blind, they don’t care. What they want is to just take what they want and get out of the country before government changes. That is the way they operate. So, you can’t say they are responsible. No, they want things to go well, but they want it in their favour.
The objection is that the fiscal regime was not okay because there are people, who have been taking everything almost for free, and now we want to impose more restrictions on what they can take. That is what they are opposing.
I am on the side of restructuring to have progressive fiscal regime, where it will be a win-win situation — a win for them for being the ones bringing the oil out and a win for us for being the owners.
Were all of those factored into the PIB version you crafted?
There was a problem, in that sense, that it has not been done to their satisfaction. That is what they are objecting to.
The original bill was not passed in the 6th and 7th Assemblies. It was rewritten and I do not agree with it, because they bastardised what we had written and personalised it, and too much authority and discretion has been left with the Minister and the President.
For instance, the President would award oil blocs as he wishes, and the Minister will approve a lot of things as he or she deems fit, which, in a way, brings back the corruption we are trying to avoid. Openness, transparency and accountability, which we were writing against, have now been reintroduced into the system.
What were your specific recommendations, which according to you were bastardised?
I recommended a lot of things; we are talking about a 279-page report.
In terms of who decides what, how do you recommend that the President allocate oil blocs? There are things the President can approve, but cannot have the right to allocate oil blocs at his discretion. This was what was done in the past as a gift, a political gift to party friends and others. That has been the biggest weakness in the industry because there are a lot of people seeking these favours. That is why the industry has not grown.
Go and check who is allocated oil blocs in Nigeria, and why they got it. We are using it for gifts to friends, politicians and parties. We want that removed. In the United States and other places, the President does not have such right to make discretional awards to his friends or whoever. It should not be in the system because it leaves room for high level of corruption.
What they have now has it and that is what I am fighting.
And this was not in what you recommended earlier?
Yes. Few months ago, I gave a talk on what I called The Interrogation of the Petroleum Industry Bill to point out all these things that are not in the Bill and advised against passing it in the present state, and recommending that President Buhari withdraw it so that we would rewrite it and put back the essentials that give it integrity.
We need to make it whole so that it can provide a better future and growth for our industry before it can be given back to the Parliament. The Minister has so many rights of discretion. There are things the Minister must authorise, but not that he or she would decide how much fiscal regime to give to a company. There must be a standard, the same rule for everyone, but not for selective treatment.
One of the most important things in the PIB, which is not going well and I want changed because I pioneered the whole concept, is the issue of giving something back to communities where oil is produced. This was the basis of the Amnesty, which President Yar’Adua granted to the communities in October 28, 2008.
Yar’Adua, at the time, said his adviser was a genius, who came up with the concept of sharing the nation’s resources with host communities. What I recommended was that 10 per cent share of revenue should go to host communities. And since they were partners with government, they would protect what is theirs.
With that, there cannot be cases of pipeline vandalism and other things that halted oil production. Because benefits get to these communities, if there are acts of vandalism or anything that will make oil to stop flowing, they will lose for that year. Therefore, they will now have to protect rather than vandalise pipelines. Yar’Adua said he wondered why we didn’t do this before. It is clear that they wouldn’t burst their own pipelines. He said it was a genius concept and that was the basis for granting the Amnesty. That has been bastardised in the PIB, which I must redo for to restore its integrity.
With these issues hovering over the PIB, We are in for another round of bids, what challenges do you see, going forward?
I don’t think so. The bid rounds would come. And right now, government is going through reviews of operation in the country; every company will present their plans. What we have in the PIB is what we call New Encroach Management Process. It states that, if there is any property that has not been operated or action of development for 10 years running, government will say, this is not contributing to our growth and will take it back from whoever owns it. It would put it into the pool so that we can now give it to other people to operate.
That is what we had in the Bill. It is actually necessary for the Bill to be passed before that can be effective.
The new Bill that I will write, if permitted, would definitely do that, such that anything that is not being operated, will be taken back and put in the bag for people to bid for. I believe we need to get the Bill out and rewrite it. In fact, I will not say get it out, because it doesn’t exist; every Bill dies with the Parliament, so it doesn’t exist. We will need to rewrite it and resubmit. And if we are able to lobby the House properly, that is, explain the essence of everything to them, the Bill can be passed in no time at all.
But because they have not been able to understand it at all and with so many things happening, bribery included. In fact, while we are fighting to have it passed, the oil industry is against it. Four years ago, I was indicted and the National Assembly brought me for a trial.
That was the 7th Assembly?
Yes, when they called them in Ghana to resist the passage of the Bill. They brought those senators to Ghana, away from Nigeria. The National Assembly brought me for a trial and when I explained the matter, it just died like that. It was terrible.
How worried are you that the PIB you authored and nurtured has suffered such political battery?
Nigerians do not understood the opportunities the PIB presents to this country. If they do, they will leave their personal desires of little things. What the bill can do for the nation is bigger than what the individuals gain from it.
Are you ready to redraft the PIB?
I wouldn’t redraft, but make changes to what the former minister bastardised. It is not a big task, just small changes needed. If I were happy with the present Bill, I would not be making this plea to the government. I have given the notice to the President on what should happen and I am prepared to step in to do it.