Analysis: Task Force on Petroleum Industry Bill another job for the boys, platform for multinationals

Petroleum Minister Diezani Alison-Madueke

Advanced myopia may well be what our government is suffering from. Or it may well be just that government is glibly waxing lyrical about the deregulation of the downstream sector of the country’s petroleum industry.

What do we believe, if none of the retinue of government officials could see that the Petroleum Industry Bill (PIB)languishing in the National Assembly for almost three years, contained provisions that eloquently addressed the issue of deregulation?

If government had invested even a tenth of effort it deployed in the recent petrol subsidy removal misadventure, the country could have been the better for it. Everyone could have been spared the indignity the people suffered and the humungous bleeding of the economy of the last three weeks.

The draft PIB was a few short steps away from being passed into law before the 6th National Assembly drew the curtain on its legislative session last year. The law did not only pass the second reading, it also went through a joint public hearing, pending the submission of a report.

Final deliberation on the amendments and consideration in the committee of the whole could have prepared the document for the third reading in the Senate, giving the country a temporary Act for concurrence by the House of Representatives, after which a clean copy of the Act could have been ready for the President’s assent.

Contrary to what government would want the people to believe, it appears it was ill-prepared for a genuine petroleum industry reform. That is why the heroic resistance by the people of its dubious attempt to solve the deregulation equation from the middle caught it flat-footed, leaving it with little or no genuine fall-back position to manoeuvre.

Having to be saddled with the burden of about N46.12 subsidy on petrol when its gambit not to provide for such eventuality in the 2012 budget backfired shows clearly that government did not have the slightest clue to how it was going to embark on the journey it willfully set out.

Now, government is scrambling a desperate hold on any straw to wriggle out of the tight corner it has boxed itself.  But, the real worry is that from one faltering step to another government is inexorably pushing the country into a trap that could have been avoided with a more open, deliberate and transparent handling of the process.

The special task force on the PIB inaugurated last Thursday by Petroleum Resources Minister, Diezani Alison-Madueke, appears another gambit to create job for the boys. The task force, which is to work alongside a technical sub-committee and the office of the minister of petroleum resources to produce a draft PIB within 30 working days, is also to liaise with the National Assembly to facilitate the speedy passage of the law.

What would a technical committee constituted by a minister achieve in 30 fleeting days that the Oil and Gas Sector Reform Implementation Committee (OGIC) with a presidential mandate failed to after more than three years of wide consultation with industry stakeholders before producing the draft bill that the same members of the National Assembly failed to pass?

What kind of draft PIB are Nigerians expecting a committee populated by politically correct systems persons from the Nigerian National Petroleum Corporation (NNPC), widely known to be long in rhetoric on industry reforms but short on commitment to midwife it into reality?

“How can NNPC spearhead the process to draft the Bill?” one former top official of the corporation told Premium Times. “NNPC has been the biggest stumbling block to the reform of the industry over these years. A corrupt institution in dire need of reforms cannot spearhead a reform process and one expects something meaningful.”

One may be wrong, but most members of the phantom committee are persons who, over the years, superintended over the systematic cultivation of the rot that has characterized the NNPC and its subsidiaries as the corruption havens in Nigeria’s contemporary petroleum industry.

In this era of cost-cutting in government business, it would have served the country’s strategic interest better if some members of the OGIC, who are knowledgeable about the original objectives of the PIB, within the context of unfettered reforms of the industry, were mandated to carry out that assignment.

Most of the former OGIC members followed through the different stages the former draft bill went and are in a vantage position to appreciate the web of intrigues, manoeuvres and convoluted subterfuge that culminated in more than one version of the law circulating in the National Assembly.

It’s an open secret that the former National Assembly failed to work on the former bill because they allowed competing interests to influence their sense of patriotic duty to the country.

The PIB seeks to consolidate about 16 outdated petroleum industry laws into a single coherent legislation, covering petroleum administration, royalties, fiscal terms, taxes, bidding procedures, environmental obligations, employment and technical regulations.

Its passage would establish a new legal and institutional framework that aligns the legal, regulatory and fiscal provisions to promote international best practices in line with accountability, transparency and good governance, particularly with regard to the management of revenues, removal of confidentiality clauses in licenses, leases and contracts.

Above all, the proposed law is seeking to adjust the existing fiscal terms to enable government earn enhanced value from the award of leases and licenses as well as taxes and royalties multinational operators.  

The multinational companies, under the aegis of the Oil Producers Trade Section (OPTS) of the Lagos Chamber of Commerce and Industry, have not hidden their aversion for the proposed law, and have hardly relented in deploying every resources at their disposal to lobby, blackmail and cajole those in the corridors of power to water down the provisions in their favour.

To demonstrate how serious they take their campaign, the OPTS has a full fledged secretariat in Maitama dedicated for the critical analysis by technical experts of every shred of the new fiscal provisions and weigh them against their collective interest.

Prior to his being drafted in 2008 to serve as the strategic business adviser to the former Minister of State for Petroleum, Odein Ajumogobia, it was this elite corps of OPTS technocrats that Augustine Olorunsola served as the Vice President in charge of Shell Upstream International Commercial Gas and Power businesses for Sub-Sahara Africa.

Mr. Olorunsola, who is the Director, Department of Petroleum Resources (DPR), was named the Chairman of the Technical Committee on the PIB by the Minister of Petroleum Resources, Diezani Alison-Madueke.

Shell’s role in OPTS’ campaign against the PIB is legendary. But, how a senior staff of a multinational company, so overtly opposed to the country’s economic interest, managed to ascend to the pinnacle of the industry regulatory agency would merely provide a snide conjecture on how the mind of our leaders works.

And when a minister, who is a former executive director of Shell, gives the mandate for another top Shell staff to preside over the committee responsible for the production of the draft bill, which their company is opposed to, one can only hazard a grim guess of a hollow expectation.  


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