The President of the Senate, Ahmad Lawal has cautioned that except the proposed reforms in the Petroleum sector is holistic and timely, Nigeria may face difficulties in the next two decades, even as he reiterates that emerging technologies may render fossil fuel less relevance.
He explained that the failure to give the Petroleum Industry Bill the attention it deserves, almost two decades since it was first introduced, has continued to expose the industry to numerous shocks and challenges. He identified the challenges facing the sector to include laws dictated by global practices, the persistent calls for the deregulation of the downstream sector, the agitation of the oil producing communities and the unbundling of the NNPC.
Against the backdrop of the foregoing, Lawal said, it has become expedient to fastrack the passage of the bill, while paying due attention to pitfalls that led to the inability of past senates to pass the bill, amongst which is inadequate consultation with relevant stakeholders.
He further explained that the determination of his senate to the PIB to silver lining is to ensure the overhaul a system that has refused to operate optimally in line with global standards, resulting into loss of continental competiveness, transparency, accountability, good governance and economy loss for the petroleum industry and the country.
It is my pleasure to welcome you all to this 2-Day Public Hearing organised by the Senate Joint Committee on Petroleum Sector (Downstream); Petroleum Resources (Upstream); and Gas for the consideration of a Bill for an Act to Provide Legal, Governance, Regulatory and Fiscal Framework for the Nigerian Petroleum Industry, the Development of Host Communities and For Related Matters, 2020 (SB. 510) otherwise known as the Petroleum Industry Bill (PIB).
Recall that the journey of the Oil and Gas reforms began in April 2000 when the then President Olusegun Obasanjo Inaugurated the Oil and Gas Reform Implementation Committee. The work of the reform Committee culminated into the Petroleum Industry Bill which was later transmitted to the 6th Senate in September, 2008 and since then, efforts by successive Senate to get the Bill passed have not yielded the much desired result. This in my own opinion, may be attributed to inadequate consultation and cooperation from stakeholders. However, the 9th Senate in its wisdom, made the passage of the Bill a priority in its legislative agenda and has since in conjunction with critical stakeholders, been working assiduously to get the Bill passed this year.
More so, the challenges surrounding the future usefulness of petroleum resources and the increased level of uncertainty on oil demand calls for great concerns. It is estimated that with the evolving of new technologies, fossil fuel may be less attractive if not of no value in the next 20 years. It is therefore time for us to make maximum benefit of our fossil fuel reserves through this reform before it fades away.
Distinguished ladies and gentlemen, the Bill under consideration in this Public Hearing today, comprises of 4 chapters that are distinct but related. Permit me to outline some of its key objectives:
Chapter one describes how to create efficient and effective governing institutions with clear and separate roles for the petroleum industry; establish a framework for the creation of a commercially oriented and profit-driven National Petroleum
Company; promote transparency, good governance and accountability in the administration of the petroleum resources of Nigeria among others;
Chapter two among others, seeks to promote the exploration and exploitation of petroleum resources in Nigeria for the benefit of the Nigerian people; promote the efficient, effective and sustainable development of the petroleum industry;
Chapter three describes how to foster sustainable prosperity within host communities, provide direct social and economic benefits from petroleum operations to host communities; create a framework to support the development of host communities among others; and
Chapter four is meant to establish a progressive fiscal framework that encourages investment in the Nigerian Petroleum Industry, balancing rewards with risk and enhancing revenues to the Federal Government of Nigeria; provide a forward-looking fiscal framework that is based on core principles of clarity, dynamism and fiscal rules of general application; establish a fiscal framework that expands the revenue base of the Federal Government, while ensuring a fair return for investors.
It is a known fact that the non-passage of the PIB has been a major drag on the industry over the years, significantly limiting its ability to attract both local and foreign capital at a time when many other countries are scrambling to exploit their oil and gas resources. The mere knowledge that the nation’s oil industry is still being govern by laws enacted more than 50 years ago is ludicrous and extremely disappointing.
As legislators, we will strive to deliver a Bill that will enhance the growth of our oil and gas industry, modernize our fiscal system and enhance competitiveness, while creating harmony for all stakeholders. This is a promise we have made and that we shall achieve. Nigeria must have an Oil and Gas Industry that benefits its people. Equally, our Oil and Gas Industry must be competitive. We must create a sustainable investment climate, where business in the sector will flourish. I want to assure you that we will deal with all issues relating to the oil and gas industry with thoroughness and effectiveness. We cannot afford to delay, as delay will cost more colossal losses to our economy.
Let me at this point, state that your contributions and active participation in this public hearing today, will go a long way in shaping the outcome of the Bill and move the industry forward for the benefit of all stakeholders.On this note, I wish you successful deliberations as I now formally declare open the Public Hearing on the Petroleum Industry Bill.