Senator Emmanuel Paulker is the Chairman, Senate Committee on Petroleum (Upstream). In this interview with journalists, he explains why reforms in the oil sector are slow. He also spoke on the controversy surrounding the Petroleum Industry Bill (PIB) and why it is crucial to changes in the oil and gas sector. UCHENNA AWOM was there for LEADERSHIP.
WHAT IS HAPPENING TO THE PETROLEUM INDUSTRY BILL (PIB) IN THE NATIONAL ASSEMBLY? IS THE BILL DEAD?
That the PIB is not in the National Assembly does not mean the bill is dead. It would be re-introduced. As the Chairman of the Petroleum Resources (Upstream) Committee, I’m aware that no sooner than later, each committee would work with similar committees and the NNPC to see that this bill is re-introduced.
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WHY THE DELAY IN RE-INTRODUCING THE BILL?
Well, the question you should ask is: How long were the committees constituted in the Senate? The committees just came into operation in the National Assembly about three months ago. Let us use the Upstream Committee as an example. We have started interactive sessions with the Petroleum Ministry, the International Oil Companies (IOC’s), and other relevant bodies and parastatals under the committee. I don’t think the PIB is being delayed because the PIB is a very important bill for the oil sector and moreso, the composition of all the committees have changed. So, they need some time to galvanize on the PIB.
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WHY IS THE BILL SO CONTROVERSIAL?
I don’t think I would agree that the bill is controversial. There are differences in stakeholders’ thinking on the PIB, especially with the fiscal regime which borders on money. If one party is saying you should take more money, the other party may say that the amount of money you are talking about is too much for me to part with. That doesn’t make it controversial. You could see it when we were doing the Third Reading of the PIB in the last Senate, when we were doing the clause by clause consideration, there was no controversy whatsoever. You could say that maybe there were some areas of disagreements between the IOC’s and maybe government and some representatives of some people in the National Assembly. But there was no controversy as far as the bill was concerned.
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ARE THERE CONSULTATIONS ON THE NEW PIB?
As I mentioned earlier, the PIB is an executive bill. Definitely, in any system, when you are introducing any bill, there must be consultations among the stakeholders. You just can’t throw in a bill into the waters and keep it like that. There must be consultations and I think that that would take place soonest.
FEARS OF HIJACK OF PIB AND ITS EFFECT ON OIL SECTOR?
That cannot happen. Nobody can hijack the PIB. I was a close participant in the processes under which the PIB passed through to the Senate. I can assure you that no group can hijack that bill and being a reporter in the National Assembly yourself, you know that when a bill gets to the Second Reading stage, it’s open for debate. It would pass through thorough scrutiny. It would even go to public hearing where Nigerians would make inputs. So, no group can hijack that type of bill. I see no possibility of any group hijacking that bill; definitely not the PIB. Look, the PIB is critical to the economy of this country,? very critical at this stage and everybody has shown interest and maybe that’s the more reason why, owing to the vast interest shown by legislators, people took their time in addressing all the issues that arose from that bill. There were some contentious areas, even among us, during the consideration of the bill… I have explained that the PIB borders on fiscal regime. The fiscal regime, which is the tax regime, the bill tends to address the fiscal regime, tries to say, look, yes, maybe the oil majors have been paying one kobo, so to say, this is our feeling that this law has been in existence over the years and there’s need for a review and if you are reviewing a law that borders on taxes for the past 10 years, there’s the tendency that taxes would be increased and if you are the person paying, nothing stops you from saying that what you are proposing is just too high for me to pay and nothing stops the other benefiting party from saying let’s know how much you can pay. That’s normal.
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WILL THE BILL SCALE THROUGH THIS TIME AROUND?
Definitely. This time around, the bill will scale through.
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WHAT’S HAPPENING TO THE SOME OF THE IOC’S MOVING OUT OF NIGERIA?
That’s a misnomer. The IOC’s are not moving out of Nigeria. It is only Shell that’s divesting and not moving out of Nigeria as some reports put it. What happened was that through our interaction with them through the committee, we got the true position of Shell. Yes, Shell told us that they did some divestments of their investments in Nigeria which implies that they wanted to cede out part of their investments to local operators; more to local operators because they feel that maybe a marginal field is too small for them to manage and they are going into the deep waters, so, let them divest some of their investments and allow local operators to come and own them. They did explain, during our interactive session that that doesn’t mean they are leaving the country. In fact, they are even investing some more in Nigeria. They explained to us that Shell is not ready to leave the country.
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IS THE COMMITTEE ADDRESSING THE COST OF DOING BUSINESS IN THE OIL INDUSTRY?
Let me state two major issues which our committee shall pay serious attention to. The first is the issue of industry cost. My committee is aware that over time, the cost of doing business in our petroleum industry has grown to become one of the highest around the whole world. This is in spite of the fact that the factors often cited to justify such higher costs are no longer in existence. The committee is aware that the industry is traditionally considered to be opaque, secretive and guarded. This is so especially with regard to the operations of the policy and regulatory agencies as well as even major oil companies both foreign and indigenous. It will, therefore, urge everyone charged with regulatory, policy or operational responsibility to cooperate fully with this committee in the discharge of it’s functions. Let us wave goodbye to hide and seek, to disobedience to lawful requests for information and invitations and to such other irritable attitudes that often generate rancor and acrimony.
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SO PIB IS THE LEGISLATIVE FRAMEWORK TO GUIDE OIL SECTOR?
Let me state categorically that unlike any other time, the Nigerian petroleum industry is presently at a crossroad. As the backbone of the Nigerian economy, the industry is expected to not only generate the vast proportion of government revenue through the provision of adequate power supply and employment of our teeming population of youths. However, the challenges facing the industry today are enormous. Some of them are: widespread uncertainty about the state of the ongoing reforms in the industry with the non-passage of the PIB; slow-down of investment in virtually all aspects of the industry; impediments to the vigorous implementation of the Nigerian Content Act; low growth of our oil and gas reserves; confusion surrounding the renewal of leases held by some oil companies; problems surrounding divestment of assets to Nigerian companies as well as environmental and community issues. All these constitute major challenges to the smooth operation of the
industry and the delivery of expected dividends to our country. But let me quickly add that the Senate is ready to partner with the oil sector if they are also willing to collaborate with the National Assembly in effecting reforms in the industry.
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