Nigeria under pressure to pass long-awaited oil law When Nigerias President Goodluck Jonathan signed into law a bill banning gay marriage and civil unions this month, he won wide support from his compatriots, especially on social media. But tucked away on Twitter timelines, some users asked how such a law was passed in less than a year when a key plank of government policy has been languishing since 2008. Six years since it was first proposed, Nigerias Petroleum Industry Bill (PIB) is stuck in the legislative pipeline, with no apparent end in sight to disagreements over its terms. Now there are calls for renewed efforts to force the bill through parliament to unlock billions of dollars in frozen investments in a sector that accounted for 96 percent of Nigerias total export revenue in 2012, according to the International Monetary Fund. There is lack of political will by both the executive, that is the presidency, and the legislature, to get the bill passed, said the spokesman for the Petroleum and Natural Gas Senior Staff Association union, Babatunde Oke. For some months, the (lower chamber) National Assembly has been promising to fast-track the passage of the bill but up to the present moment, the bill is yet to be passed, he told AFP. From recent events, we can deduce that the presidency doesnt have interest in the bill. If they did, they would have put pressure on the legislature and get the bill passed. Nigerias oil minister has said the PIB comes closest to what we consider a win-win situation for the Nigerian government, the Nigerian economy and people as well as other stakeholder and potential investors. Essentially, the bill aims to redefine the fiscal terms in the oil and gas industry, to increase Nigerias share of revenue and also restructure the state-run Nigerian National Petroleum Corporation. International oil companies (IOCs) would also pay 10 percent of their net profits into a Petroleum Host Community Fund intended to benefit oil- and gas-producing areas. But with those areas mainly in the south, lawmakers from northern states fear such a move would further impoverish their region. Even in the south, some local groups have called for a 100 percent payback of what they view as their God-given resources. Reform calls Key industry figures agree a new law is needed to create more certainty, but major players such as Shell and ExxonMobil say the proposed terms are too harsh and could stymie investment. The government has insisted that a new version of the PIB, sent to parliament in July 2012, would address those concerns, to trigger new investment and relaunch stalled projects. One senior oil company executive, who asked not to be identified, blamed recent divestments in Nigerian interests in part on uncertainty over the PIB. You can see many oil majors like Shell and Chevron selling some of their oil blocs, particularly the onshore blocs, because of the problem of oil thefts and vandalism, he explained. Equally important are the uncertainties surrounding the passage of the bill. Investors are cautious to stake their money because they are not sure what will become of the proposed law. Union spokesman Oke suggested it was now time to bring in an independent outside body to thrash out an acceptable deal between the parties. Power-hungry Despite being Africas biggest oil producer, churning out some two million barrels of crude oil a day, woeful infrastructure has left Nigeria dependent on imports. Daily power cuts force homes and businesses to rely on their own diesel-powered generators to keep the lights on. Africas most populous nation has enjoyed high rates of growth in the last decade and is tipped to leap-frog South Africa as the continents biggest economy. The chairman of the Nigerian Electricity Regulatory Commission, Sam Amadi, said the PIB was critical if the country is to feed an increasingly power-hungry population. Nigeria currently generates about 3,000 megawatts of electricity per year, well short of what is required for a fast-growing nation of some 170 million people. In comparison, South Africa produces more than 43,000 megawatts for a population a third of the size. PIB is critical to move forward on gas to power, the law should be passed as soon as possible, although the debate over it is big, but we want the matter to be resolved in a way that makes gas to power commercially viable and bankable, Amadi said recently. For end of 2013 we had expected to hit 7,000 megawatts and that would have been possible if there were enough gas to fire the plants.
Posted on: Tue, 28 Jan 2014 06:57:03 +0000
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