Hon. Dakuku Peterside is the Chairman, House Committee on Petroleum Resources (Downstream), representing Andoni/Opobo/Nkoro Federal constituency of Rivers State. In this interview, he explains the issues surrounding the Petroleum Industry Bill (PIB) before the House, and the attendant benefits of its passage, among other matters. He spoke with JOKE KUJENYA. Excerpts.
What is the state of the Petroleum Industry Bill (PIB) bill in terms of its passage into law?
The PIB is a single reform-minded Act for the petroleum industry and which also repeals sixteen earlier acts. It is basically a reform programme that has been on the drawing board as far back as 2008. It seeks to strengthen the administration and regulation of the industry by creating new institutions, promoting transparency and accountability. It deals with the fiscal regime in the industry and removes confidentiality on royalty and tax payments. More than anything else, it accommodates the interest of host communities and reasonably guarantees peace in the community and greater oil production. The bill also seeks to integrate local content initiative and environmental issues in the industry. More than anything else, it protects the interest of Nigerians and investors.
So, how do we justify the need for PIB given the way it is being treated?
At one point or another we all agreed that the present method of operation in the oil and gas industry is not sustainable. Too many things are shrouded in secrecy. Agitation by host communities will continue and environmental challenges, especially gas flaring will continue to be a challenge until we tackle them head on by the law. We are losing so much revenue due to indiscretion and revenue flow has been an issue. If these leakages and more must be blocked there must be reform.There is also another strand of boosting investors’ confidence by the degree of transparency and accountability with which we conduct affairs in the industry.
Stakeholders say the passage of PIB into law would fast-track economic growth. Could you tell us in which ways the PIB would be helpful to the economy?
PIB built on some assumptions and principles.Deregulation will reasonably guarantee flow of investment. A more transparent upstream bid system will not only boost confidence of investors but will lead to generation of more revenue, which will in turn facilitate development. A new fiscal regime will increase government take though this is subjective. Conversion of the Nigerian National Petroleum Corporation (NNPC) to a self-financing National Oil Company will enhance efficiency and effectiveness and loosen the much needed fund for other infrastructural development.The passage of PIB into law will boost local content initiative, which will lead to employment creation. Summed up, PIB will have far reaching effect on the economy of the country.
What are all the stakeholders doing to fast-track its early passage?
I see commitment on the side of the Federal Ministry of Petroleum Resources acting on behalf of the executive arm of government to forward a draft to the National Assembly. I am convinced that the Udo Udoma Committee has taken the right steps. One assurance I can give is that the mood in the National Assembly is upbeat. Thus once we receive the executive copy we will give it the attention it deserves. I see the National Assembly passing the bill before the end of the year. PIB is of strategic national importance thus I see a convergence of all reform minded legislators working early passage of the bill.
With all that is going on at present, in which drift do you foresee the petroleum industry?
Well, let me say that I see a new dawn if we are committed to three ideals. The first is that we must collectively agree to root out corruption in all forms in the oil and gas industry. Corruption is incompatible with growth, especially when rooted in the economic mainstay of a nation. The second is that we must commit to optimising benefit accruable from natural resource endowment and use it to develop other sectors of the economy for sustainability. This is urgent and critical. Three, we must ensure that we truly make gas an integral component of our national economic strategy, not by documentation of a gas master plan but by ensuring we match plans with action. I see a great Nigeria if …
What do you think will happen to institutions like the Department of Petroleum Resources (DPR), Petroleum Products Pricing Regulatory Agency (PPPRA) and the Nigerian Extractive Industry Transparency Initiative (NEITI)?
The Department of Petroleum Resources will most likely be replaced by the Nigeria Petroleum Inspectorate with a wider scope of authority. PPPRA will most likely be replaced by the Petroleum Regulatory Authority with expanded mandate including oversight of refineries. NEITI is an institution that is established by reason of an international network committed to the highest level of transparency in extractive industry.Unfortunately, it has no role presently in PIB.
On the recent Nigerian refining capacity summit at Uyo, what’s the outcome?
The National Assembly as an institution is piqued by the fact that as a country, we solely rely on import to meet our petroleum products need. We felt that this is not right considering its security implication for the country. It is contradictory and inconceivable that the eighth largest exporter of oil in the world is also one of the highest importers of petroleum products. We decided to take the initiative of getting stakeholders together, providing a platform for robust engagement and search for solutions. The Uyo summit did just that.All those who participated said it was one of the best organised and most productive topical national discourse in recent times. I am aware that all stakeholders are eagerly waiting for post-summit action to justify the time spent at Uyo.
So, what are some of the resolutions taken at the summit and how will they be merged with our national agenda?
Among many issues is the consensus that deregulation of the downstream sub-sector is critical to reform in the petroleum industry. We also agreed that rather than subsidise consumption, we should subsidise production in order to create jobs and also gain strategic security advantage that comes with the ability to refine our crude in-country. We also agreed that refining is strategic in the petroleum value chain if we intend to optimise the resources God gave us.
The summit dealt extensively with regulatory framework for licensing and operations of refineries and came to the conclusion that it needs a bit of fine-tuning and government guarantees: In view of the small margin, refineries on a comparative scale is not what an investor will be desirous to invest in therefore, government’s leverage is inevitable. One of the most important decisions taken at the summit is the inevitability of PIB. All stakeholders agreed that for us to be taken seriously, we must deal with and put behind us the issue of PIB. There was a consensus that without PIB, we will have no major progress in the industry.
We enjoin our readers to send their stories/articles/reports, including pictures to firstname.lastname@example.org