CHIEF Executive Officer, African Initiative for Transparency, Accountability and Responsible Leadership, AfriTAL, and formal President of Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, Dr Louis Brown Ogbeifun, has warned of dire consequences if the fiscal and host community Bills component of the Petroleum Industry Bill, PIB, are not passed by the National Assembly and President Muhammadu Buhari sign into law before the end of August.
Consequently, Dr Ogbeifun who is also a former Industrial Relations Manager of the Nigerian National Petroleum Corporation, NNPC, called on stakeholders to work creatively to enable the National Assembly pass the Bills for the President’s assent without delay.
According to him, if the Bills are not signed into law by the end of August and full politicking begins ahead of 2019 general elections, both the lawmakers and the president would no longer have interest for the bills and that would lead to a very serious set back that the nation could not afford.
Speaking in Lagos, at a strategic engagement of stakeholders on THE PETROLEUM INDUSTRY ADMINISTRATION AND FISCAL REGIME BILLS, before the National Assembly, PENGASSAN former President lamented that 18 years after the PIB was first came to limelight i Nigeria was still foot dragging on the Bill.
At the event that attracted members of the Nigeria Union of Petroleum and Natural Gas Workers, NUPENG, and their PENGASSAN counterparts, Ogbeifun contended that no nation could develop its hydrocarbon potentials to the optimum with the type of procrastination and indecisiveness as had been the case of Nigeria since 2000 till date.
He said: “My worry is that, despite the efforts of the 8th Assembly in breaking the Bills into smaller components, it does not still look like stakeholders are ready as a group to effect the positive changes that would lift the industry higher.
Some of the reasons for the failure in the past include but not limited to: Lack of political will by the previous administrations to follow through the reforms; Positional bargaining by the critical stakeholders especially on the fiscal regimes; Perceived possible job losses, inadequate guarantees on pension and employment security of the workers; Perceived loss of economic, political, administrative and governance benefits/powers by various agencies; The voluminous and complex nature of the Bill; Political interests especially on the host community funds etc.
“In midst of our inaction, we have been running the oil and gas sectors with policies that were majorly not enacted into laws. We have also tried several administrative and financing regimes like the, Crude Swap Arrangements, third Party Financing, Carry Arrangement and Modified Carry Arrangements in managing the agreements with the JV partners. Our nation’s oil and gas sector cannot develop with obsolete laws, inability to restructure or carry out the necessary reforms over a long period of time.
This surely cannot promote investors’ confidence and therefore, not likely to come out strong like Saudi Arabian Oil Company, which earned a revenue of about $455.49 billion in 2015 and had employees in the range of 65,266 in 2016.
‘’It is said to be one of the largest companies in the world by revenue with a market value of about $2-$10 trillion. China Petroleum and Chemical Corporation were founded in 1988 with employees totalling 1, 636,532 in 2014 and a Revenue of $428.62billion in 2015. Hindustan Petroleum Corporation runs like the NLNG with 51.11% state holding.
In 2013, it ranked 260th in the Fortune Global rankings. It has more than 18,000 employees. Abu Dhabi National Oil Company was founded in 1971 and restructured in 1988. It is rated world’s 12th largest oil company by production of about 3.1 million barrels per day. It returned revenue of $60 billion in 2014 and had 55,000 employees in 2015.’’
According to him, “These companies though state or partially state owned entities run like ideal businesses with strictly commercial orientations. They make money for their countries and companies, provide massive employment opportunities to their citizens, invest outside their shores in oil and gas, and other profit yielding businesses. This is possible because their countries’ laws and best practices support them to so excel. But in our clime, our models reflect the Father Christmas approach, in which government in the past discretionally allocated oil blocs as gifts to who they liked without due process.
We entrenched monthly “share the money syndrome (STMS)” without commensurate reinvestment programmes at the expense of Nigeria and the development of the oil and gas sector. The change in the operations of the NNPC; as typified by the incessant firing of the Corporation’s Chief Executives at will; and by extension the change at the top management level by successive political administrations has come with dizzying astonishment.
“There is no doubt that the country has lost dominance of its oil and gas industry and also lost trillions of naira because of the delay in passing the PIB either in its original form or in a collaborative compromised state. The IOCs are revaluating, divesting and adjusting their business strategies. NEITI audits from time to time have clearly shown disparities in figures of the agencies of government that should have the same figures from real time data generated.
There are project delays due to funding challenges and delayed approvals from the highest level of governance. The sector has also been impacted by the falling Oil reserves in the onshore fields, insecurity in the operating areas, crude theft, vandalism, artisanal refining, community challenges, high Dollar/Naira parity, confused and undefined subsidy regimes and global oil politics. All these resulted in the stunted growth and crippling of the industry as typified by occasional products’ scarcity that have grave consequences for labour, marketers and the Nigeria in general.”