EMEKA OKOROANYANWU
President Muhammadu Buhari last week signed into law the controversial Petroleum Industry Bill (PIB) and quickly approved a steering committee to oversee the process of its implementation.
The Petroleum Industry Act provides legal, governance, regulatory and fiscal framework for the Nigerian petroleum industry, the development of host communities, and other investment-related issues.
The Senate had passed the Bill on July 15, while the House of Representatives did the same on July 16 and President Buhari signed it into law on Monday, August 16, 2021, thus ending a long wait since the early 2000s.
The Bill, one of the most controversial since the return of democratic rule in Nigeria over 22 years ago had been in the works for over a decade and when implemented is expected to attract investments to the petroleum industry while also engendering growth in the oil sector.
The Law has, however, attracted both commendations and condemnation from various sections of the country, even as it has generated unending controversies.
While signing the Bill into law last week, President Buhari said the country has lost an estimated 50 billion dollars worth of investments in ten years, because of the uncertainty of non-passage of the Bill, lack of progress and stagnation in the petroleum industry.
Buhari, therefore, gave the steering committee 12 months to complete the implementation of the Act, directing all “relevant Ministries, Departments and Agencies of government to fully cooperate in ensuring the successful and timely implementation of the PIA.”
The implementation process which is to be headed by Minister of State, Petroleum Resources, Timipre Sylva is charged by the President to consolidate the commitment of the administration to delivering the value proposition of the Petroleum Industry Law.
The president maintained that signing the Bill into law had become necessary in view of the fact that Nigeria runs a petroleum industry that is governed largely by laws enacted over 50 years ago such as the Petroleum Act of 1969 and other obsolete legislations.
He said: “We are all aware that past administrations have identified the need to further align the industry for global competitiveness, but there was lack of political will to actualize this needed transformation. This lack of progress has stagnated the growth of the industry and the prosperity of our economy. In the past ten years, Nigeria has lost an estimated 50billion dollars worth of investments due to uncertainty created by the non-passage of the PIB.
“This administration believes that the timely passage of the Petroleum Industry Bill will help our country attract investments across the oil and gas value chain.’’
He commended the two Chambers of the National Assembly for ensuring the passage of the PIB, noting that his signing of the Petroleum Industry Bill on August 16, 2021 to “Petroleum Industry Act 2021” marked the beginning of the journey towards a competitive and resilient petroleum industry that would attract investments to support the nation’s economic recovery and growth plan.
According to President Buhari, the PIA creates a regulatory environment that will ensure efficiency and accountability across the oil and gas value chain and reposition NNPC to a commercially driven National Petroleum Company that is accountable to the federation.
The Act also provides for a direct benefit framework that will enable sustainable development of oil host communities, appealing to the host communities to look carefully at the contents of the Act which in the implementation will bring real and lasting benefits to them.
The Act, said the President, will deliberate end to gas flaring which would facilitate the attainment of Nigeria’s contributions of the Paris Agreement through a funding mechanism to support gas flare out project in host communities while also acknowledging global energy transition and making necessary provisions for the Nigerian National Petroleum Corporation (NNPC) to invest in renewable energy.
The law has, however, attracted a barrage of criticisms from many Nigerians even as it has been applauded by so many others.
One of the areas of contention was the five per cent of the actual annual operating expenditure of the upstream petroleum operators as fund for the establishment of the Host Communities Trust Fund.
While the Senate settled for three per cent (about $502 million) of the upstream oil and gas companies operational costs, its counterpart in the House of Representatives initially insisted on the provision of five per cent (about $502.8 million).
The conference report of both chambers, however, adopted the Senate resolution of three per cent. Both chambers also adopted the committee’s recommendation of 30 per cent profit of the proposed Nigerian National Petroleum Company (NNPC) to be dedicated to crude oil exploration in the Frontier Basins.
Kicking against the Law, the apex socio-cultural group, Pan Niger Delta Forum (PANDEF), and the Centre for Human Rights and Anti-Corruption Crusade (CHURAC), criticised the President for disregarding the issues raised over a portion of the bill that ceded a paltry three per cent to Host Communities Development Trust Fund and 30 per cent of NNPC Ltd profit to Frontier Oil Exploration Fund.
National Publicity Secretary of PANDEF, Ken Robinson, in a statement, described the assent to the Bill b y the President as callous, repressive and insensitive to the plight of the Niger Delta.
“This PIB falls way short of the expectations of the oil and gas producing communities that bear the brunt of unconscionable industry operations.
“This assent by President Buhari simply speaks to the repugnant attitude of disregard, propelled by arrogance, disdain and contempt with which issues concerning the Niger Delta region is treated, particularly, by the present administration.
“What this act signifies is an unequivocal message to the Niger Delta people that how they feel and what they say do not count at all in the schemes of the Nigeria project.
“That’s insensitive, abominable and, therefore, unacceptable to the good people of the Niger Delta, the critical economic nexus of the entire Nigerian territory.
“The Niger Delta people will speak shortly after full consultations on this callous act on the best legal and political response,” he disclosed.
Speaking in the same vein, CHURAC’s president/chairman, Board of Trustees, Cleric Alaowei, said the unusual speed by President Buhari in assenting to the Bill was suspicious and a sign that he was predisposed to doing the bid of a section of the country to the detriment of others.
“It appears President Buhari is yielding to the desires of a section of the country, especially the core northern supremacists. For us in the Niger Delta, the hasty signing into law of that rather repressive Act only marked another draconian legal regime where the region is being subjected to the whims and caprices of the inimical petroleum laws.
“Niger Delta people need 10 per cent equity share. Three per cent cannot remedy the despoliation of our environment occasioned by the years of unhindered oil exploration,” he said.
Also, communities in Rivers State, under the umbrella of the Coalition of Rivers Oil and Gas Host Communities (CROGHCOM), rejected the Bill and condemned the signing without first resolving the rifts in it or even putting into consideration the outcry of the people from the host communities to law in a press release in Port Harcourt.
CROGHCOM said: “We want to state very clearly that this PIB is just a rubber stamp of what the executive wanted, that’s why it’s been hurriedly passed and signed just like that.”
The statement, signed by chairman of the coalition, Barituka Loanyie, added: “We want our people and indeed the world to know that the meagre three per cent provided for the host Community Trust Fund as signed into law by the president is to be managed by the oil companies. It is like the case of the Niger Delta Development Commission (NDDC), where they give with one hand and take with the other hand.
“We reject this PIB because it does not scratch where it is itching us. This is complete injustice.”
The Peoples Democratic Party (PDP) said President Buhari showed his contempt for oil producing communities by signing the Bill into law despite the outcry against it.
In a statement issued by Kola Ologbondiyan, its national publicity secretary, the party noted that the signing of the law, “despite widespread public rejection, amounts to endorsement of imposition and further confirms that President Buhari and his All Progressives Congress (APC) have no iota of respect for the people as well as the tenets of democracy as a system of government.”
The party argued: “By his action, President Buhari has only authenticated that he is not a listening leader and that the APC and its leaders are only out to trample on the will of Nigerians for their selfish interests.”
Ijaw youths across six states of the Niger Delta region under the aegis of Ijaw Youths Council also lampooned President Buhari and the Minister of State for Petroleum, Timipre Sylva for the signing of the Bill into Law. They declared President Muhammadu Buhari who doubles as minister of petroleum and Timipre Sylva, persona non grata over the Petroleum Industry Act (PIA).
The group threatened that the duo were no longer welcomed in the region for their role in the passage and signing of the Petroleum Industrial Bill (PIB) into law, noting that despite the fact that the constitution guarantees the duo freedom of movement to any part of the country, they would be met with boos and jeers if they ventured into any part of the Niger Delta region for disregarding the plights and cries of the people of the region over the years.
IYC which had earlier rejected the PIA, describing it as a total affront on the people of the region, said the decision not to welcome Buhari and Sylva was a further show of disdain for their drop in the ratings of the Niger Delta people and should not expect any accolades and congratulatory messages from the region.
National spokesman of IYC, Ebilade Ekerefe, in a statement in Yenagoa, Bayelsa State, insisted that the best course of action the president should have taken was to send the Bill back to the National Assembly for upward review of the three per cent equity share to host communities whose environments had suffered decades of oil exploration activities by the oil companies.
According to him, a substantial percentage to the host communities would have helped to address the age long criminality.
Ekerefe described the explanation offered by Sylva on the three per cent as an afterthought adding that what the minister should have done as an illustrious son of the soil was to apologise and appeal to the consciences of the people, rather than justifying an act which is politically tailored to favour the north and its allies in the industry.
The statement read in part: “With the amount of speed the president used in signing the PIB without recourse to the stand taken by stakeholders from the region, the president has further demonstrated that the opinions of the Niger delta people don’t matter in his government as we have witnessed in other areas that requires urgent attention of his government.
“In the light of the forgoing, there’s no better time for the people of the Niger Delta region to intensify the struggle for resource control and self-determination. We believe strongly that will be the only sure path upon which our God giving natural resources can be managed by us, and not this impunity we have witnessed from a repressive federal government under President Muhammadu Buhari.”
Imo State Governor, Hope Uzodimma on his part commended President Muhammadu Buhari for the courage to ensure that the Petroleum Industry Bill was passed into law. He said that by assenting to the Bill, the President succeeded in breaking the jinx of the old 1969 Petroleum Act begging for amendment over the years.
Speaking in a live programme on Channels Television, Uzodimma also congratulated members of 9th National Assembly for working hard to ensure that the PIB eventually becomes a law.
“I am excited over the Petroleum Act. I commend the NASS and President Muhammadu Buhari for a job well done, and particularly Mr.President for breaking the jinx of the 1969 Petroleum Act as enacted,” the Governor said. Governor Uzodimma listed the gains of the Petroleum Act to include regulation of environmental hazards, creation of room for value addition to oil bearing communities and the oil companies, and generally, the ability to engender a value chain in the oil sector. He reasoned that 3% assented for the oil bearing communities should not be the focus of the Petroleum Act.
“All over the world corporate organizations have a responsibility to embark on Corporate Social Responsibility (CSR). We don’t even need a law for oil operating companies to know that when the community is not happy it will affect production.”
According to the Governor, creating a conducive working environment will enhance return on investment and create a win win situation for both oil companies and host communities.
His words: “It is not about 3 per cent or even 10 per cent or more. To me, it is not about money, it is more about return on investment, ensuring that business is doing well. Even if you make a law for 10% or 20% or more payment and the business is not profitable, there will be no money to give. We need an enabling environment beneficial to the host communities, oil companies and the government and everybody will be happy. Reasonability of men to understand that a win win situation and live and let live is needed is key in the operation of the Act.”
He also emphasized ability to avoid discrimination and obey regulatory framework. “The companies operating here are the same as those operating elsewhere. We need a strong regulatory environment and instrument, and since 1969, it has taken a man like Buhari to ammend the existing Petroleum Act. With the new law in place the companies will be forced to follow the rules and do the right thing,” the governor said.
For his state, Uzodimma said the advantage is threefold and more – it will standardize oil production, regulatory instrument will be at work and the feeling of grievance of the host communities will be addressed.
He said: “Even if you didn’t get 10% or more now as recommended, with further amendments, you will get them, but for now, there are many advantages that have come with the Petroleum Act. All the hazards that follow the production of oil, mostly environmental hazards are as a result of the absence of regulatory environment. These laws when put in place will not only regulate the environment but will also create room for value addition, both in the oil-bearing communities, the oil-producing companies and government loyalties. So, it is going to be a value chain. The benefits are going to be so enormous.”
Niger Delta Affairs Minister, Senator Godswill Akpabio who addressed newsmen at a briefing organised by the Presidential Media Team in the State House, Abuja, while speaking on the PIA, assured that the ministry would ensure that the 3% funds allocated to host communities are used on executing tangible projects, rather than disbursing among the elite class from such communities.
He said notwithstanding the controversy that has continued to trail the three percent allocation, the move by the President is a good starting point.
He also opined that rather than the back and forth over how the 3% would be utilised, President Buhari should be commended for mustering the political will to assent to the law after over five decades.
“I think the major problem is not about the disbursement but how it will impact the communities. These funds will be managed by the host communities themselves and the 3% will go into a trust fund for the various communities who are the original indigenes,” Akpabio said.
“We are excited about the Petroleum Industry Act, our job is to help facilitate the effective participation of the host communities. The trustees of the fund will come from the actual community.
“PIA when implemented is going to assuage the feelings of the host communities because they never had any real benefit in over 50 years. The major thing now is to use it well for their own benefit.”
Akpabio prayed the people to see the development as a major step in the right direction.
“The problem of the host community fund is not the percentage neither is it the problem money. But how the money will be utilized judiciously and the same time, in a way where there is no acrimony.
“I don’t want that will break or cause communal clashes. So, I believe strongly as a ministry that is responsible for the peace for the region, that we will take interest in how certain decisions are made as to who is a host community and who are those that should manage the fund.
“The law would have provided for this but at the same time, human being must also assist in the law in such a way that there is no acrimony.
“The Petroleum Industry Act PIA when implemented is going to assuage the feelings of the people of the host communities because they never had half a percent when oil when discovered in 1956 in Olobri. That is why I said that it is not the percentage that is the issue. Some communities could not even do this solar powered toilet, some had no drinking water, even water tankers supplying them water failed because they had oil exploration and exploitation had destroyed their water system. But now with the PIA, they would be able to do certain things for themselves without waiting on oil companies, the federal government or the state to do it for them.
“My prayer is that the people would see this as a major step. People are arguing about percentages, I am not interested in that. We would manage this 3% but the major thing is to use it well. Even the small percentage that use to come to the NDDC, at least, they did not utilize it well. I believe the host communities would list out their problems, come together in unity and justify this action of Mr president and this action of Nigerians.
“This one is going directly to the host communities. We will do a lot of sensitization from the ministry, visit the people. When we look at the Act and know the composition of those who should be in charge of the money, we will also make our inputs. And it should be mostly project based. It shouldn’t be like a normal contract. It should almost be like direct labour. It is a major leap forward.
“Today, majority of Niger Deltans are very happy that the government has decided to deal with the host communities directly. This one will touch their lives directly. I also know that some communities will fight but of course, it is expected. Most of those things would be settled.
The Senate also has commended President Buhari for giving his presidential assent to the PIB. Senator representing Osun Central and chairman, Senate Committee on Media and Public Affairs, Basiru Ajibola, described the assent by President Buhari as “a major victory that has the potential of bailing Nigeria out of its economic predicament and an act that will enable the country make the most of economic gains of the oil industry for the benefit of Nigerians.”
Senator Ajibola further attributed the success of the assent to the Bill, which has now become an Act, to the warm relationship between the Parliament and the Presidency.
Speaker of the House of Representatives, Femi Gbajabiamila, in a statement issued by his Special Adviser on Media, Mr Lanre Lasisi, said the bill has become an Act of the National Assembly and expressed optimism that Nigeria’s oil and gas industry will now receive a breath of fresh air. Gbajabiamila said when massive investments come in as a result of the Act, a lot of Nigerians will gain employment.
Organisation of Petroleum Exporting Countries (OPEC) in its reaction congratulated President Buhari for signing into law the PIB. Secretary-General of OPEC, Dr Mohammed Barkindo, in a congratulatory letter released to the News Agency of Nigeria (NAN) said: “Indeed, the new law will enhance the Nigerian petroleum industry’s reputation, open the door to new investment and ultimately strengthen its position to meet the world’s growing demand for energy.”
He added that the enactment of the legislation was timely as the investment outlook had become clouded by efforts aimed at accelerating a lower-carbon future.
According to him, the new law will help harness Nigeria’s potential to achieve its programme of raising oil production to four million barrel per day and oil reserves to 40 billion barrels, while also drawing on the country’s vast natural gas reserves to provide clean and efficient energy.
The OPEC secretary said since the 24th OPEC Conference on July 12, 1971, when Nigeria was welcomed as the 11th member country of the organisation, it had symbolised Africa’s leadership within OPEC and its pivotal support for global oil market stability.
