Group Politics Editor, Taiwo Adisa, examines the ups and downs of the PIB and the high-wired politics preventing its passage.The Petroleum Industry Bill (PIB), which made its way into the National Assembly in September 2008, has been described as one bill with many advantages for the Nigerian oil industry. Experts have said that the nation could be losing up to $287 million monthly in the area of Production Sharing Contract (PSC) alone as far as the bill remained in the lockers of the National Assembly.There is also the promise of more transparency in the sector as opposed to the opaqueness of its operations currently. The promise of community participation and more funds for the economy from tax intakes in gas, when the product is successfully separated from oil and taxed appropriately is another good take for managers of the economy. Perhaps more importantly is the promise of the bill to dismember the octopus Nigerian National Petroleum Corporation (NNPC), which could guarantee the desired enhanced openness, effectiveness and business capabilities. There is hardly anything to dispute the need for reforms in the sector. The Nigerian ppetroleum industry, which came alive with the discovery of crude oil in Oloibiri, Bayelsa state in 1956, has enjoyed some quantum leaps in capacity since then. With a commercial production capacity of 5, 100 barrels per day in 1958, it today produces 2.4 million barrels per day with 11 major companies operating some 1, 481 oil wells in the Niger Delta area.Essentially, the Petroleum Industry Bill seeks to restructure, repackage and revolutionise the sector in a way that would guarantee more returns on investment for Nigeria, which currently rely on oil for 85 percent of its foreign exchange earnings. The bill combines 16 different Nigerian petroleum laws; tinkering with such existing legislations as the Petroleum Act 1969, the Petroleum Profits Tax Act 1959 and the Nigerian Petroleum Corporation Act of 1977.Existing laws that would be affected by the PIB include:the Petroleum Profit Tax Act 1959;the Petroleum Act 1969;the Petroleum Technology Development Act 1973;the Associated Gas Re-injection Act 1979;the Petroleum Equalisation Fund Act 1989;the Oil Pipelines Act 1990;the Nigerian National Petroleum Corporation Act 1997; andThe Petroleum Products Pricing Regulatory Agency Act 2003.The Oil Producing Trade Section (OPTS) which made a submission before the Senate public hearing in July, 2009 also highlighted the potentials of the bill as capable of ensuring the expansion of the scope of production in the industry.Notwithstanding the laudable objectives of the bill, it has remained in the locker rooms of the Senate and House Committees for three years now. The failure of the two chambers of the National Assembly to pass the bill into law after some hugely dramatised public hearings in 2009 is an indication that the forces against the passage of the bill are not only strong, but working hard. Just as the bill was being hailed as revolutionary and progressive, some hints got into the sector that certain aspects of the bill could actually be injurious to oil majors, who are mostly of western origin. The complaint from the major industry operators is to the effect that the bill proposes new fiscal policies, which they contend could stifle investment and lock in over $5billion investments in five years.At the public hearing by the Senate Committee on Petroleum in 2009, oil operators, under the aegis of the Oil Producing Trade Section (OPTS), expressed reservations about certain inherent defects of the bill.Chairman of the OPTS, who made the presentation Mr. Basil Omiyi, expressed doubts about the ability of the bill to address the key issues in the petroleum sector pointing out that 'Fiscal provisions in the bill will render many oil and gas projects uneconomic.'He submitted that: 'The aggregate impact of multiple taxes, higher royalty rates and loss of incentives under the PIB as currently proposed will have a negative impact on gas and deep water project.'Other reservations by the OPTS were enumerated as including: that some provisions in the bill could compromise the ability of the Incorporated Joint Ventures (IJVs) to achieve self-financing; the failure to fully address aspirations of indigenous companies and unfair arbitration powers on regulatory agencies, among others.Environmental activists, who supported the idea of a PIB originally have also identifies some hiccups in the making of the PIB 2008 and 2010. Following the outcry that greeted some sections of the PIB 2008, different amendments were made at both the House of Representatives and the Senate. The result of such tinkering, which came with inputs from the government, is the coming of PIB 2010, which is being rejected by environmental groups in the oil producing areas.The main grouse of environmental campaigners in the oil producing region with the PIB include absence of clear management and handling procedures for products; investment of ownership of oil in the Nigerian nation rather than the Federal Government; enhancing transparency in the sector, repeal of bad laws and consistency with good laws, highlighting penalties for violation of laws and spelling out of enforcement mechanisms. The environmentalists, led by Environmental Rights Action (ERA), have insisted that without such clear provisions, they would not be supporting the passage of the bill. But just as the sector operators are putting hindrances to the bill, some political interests are further reading meanings into the passage of the bill.Interestingly, the new dimension is taking a North/South dichotomy.Originally, there was nothing like a North/South dichotomy to the bill. President Yar'Adua, who facilitated its transfer to the National Assembly, is a northerner. Alhaji Rilwan Lukman, an experienced Northern technocrat who has operated at the highest levels of the oil industry, headed the committee that produced the report leading to the crafting of the PIB. Lately, however, some political interests in the North are reading meanings into the making of the bill.A meeting of the Arewa Consultative Forum (ACF) held recently, with Speaker Aminu Tambuwal in attendance, was told that the PIB was against the interest of the North. One of the speakers at the said meeting, which was also said to have been attended by a number of northern members of the House of Representativies quoted one of the northern federal lawmakers as saying that the PIB in its original form 'was arranged and prepared to scheme out the North in the revenue formula.' The meeting was also informed of the setting up of a 19-member team of legislators whose duties include vetting all bills that come into the House and ensuring that none of them passes through with anti-North sentiments.Perhaps, insinuations such as the one that emanated from the ACF meeting have been informed by the agitation for community participation in the oil activities through the bill.In July 2009, representatives of Rivers State and many other communities who presented memoranda to the Senate public hearing called for increased participation of the local communities. Then Rivers State Commissioner for information, Mr. Ezekiel Amadi, who presented the state's position demanded 25 per cent state involvement in oil producing activities. He also stated that it was wrong for the Federal Government to contemplate a reform in the oil industry without involving the states and communities. It is possible that the North is now reading such submissions as avenues to corner more resources to the oil producing areas through the bill.The commissioner had stated: 'The Federal Government constituted the Petroleum Sector Reforms Committee without any deliberate attempt at involving the states and communities where petroleum is produced.'The situation once more reminds of the recommendation of the Willink's Commission of 1958 which provided that people who are no Niger Delta inhabitants could not effectively legislate for the people that inhabit the difficult terrain of the Niger Delta.'In so doing, the PIB has woefully failed to (a) address or redress the issues that have given birth to the current challenges in the Niger Delta and (b) guarantee the uninterrupted flow of the Nigerian oil and gas with a view to restoring and recapturing investor confidence.'The danger in orchestrating a greater community participation in the oil sector is the fear that it would send other segments of the country thinking that the region was quietly seeking increment in its revenue allocations. The fear then is that other parts of Nigeria would feel that since the Niger Delta states are already enjoying 13 per cent derivation added to their statutory benefits, whatever would be left in the covers after effecting another cut to the Niger Delta communities would be meager.Thus, with clear local, sectoral and international dimensions, the lethargy with which the National Assembly is treating the bill could be understandable. Since the inauguration of the Seventh National Assembly, no mention has been made of the PIB, notwithstanding the fact that that sixth session actually conducted public hearings on the bill after it went through the Second Reading.No doubt, there are genuine concerns on all fronts as regards the original draft copy of the bill. The concerns about huge taxation by the oil majors, the concerns for handling and management of products in the communities, community participation, as well as the concerns of other segments of the Nigerian federation are critical issues which must be tackled by any amendments proposed by the lawmakers. The ball certainly is in the court of Senate President David Mark, who is not in any way new to the bill and Speaker of the House of Representatives, Honourable Aminu Tambuwal. Interestingly, the two presiding officers are not strangers to the politics of this bill.
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