Multiple Task Force: Petroleum Minister is on her own – Peterside
Honourable Dakuku Peterside is Nigeria’s Chairman House of Representative committee on Petroleum (Downstream), the committee saddled with the responsibility of overseeing the downstream petroleum sector in the country and initiating appropriate laws to help develop the sector. In this Interview with select energy correspondents in Abuja, he barred his mind on some of the issues currently affecting the Nigerian energy sector.
He spoke on the long-awaited and controversial Petroleum Industry Bill (PIB), transparency in the oil sector, attracting foreign investment and the multiple task force and committees inaugurated by the petroleum minister in the wake of agitations by Nigerians over the removal of fuel subsidy.
There has been much talk of this Petroleum Industry Bill (PIB), with the Federal Government saying it would represent the bill to the National Assembly. As a member of the House of Representatives, what particularly do you think are the benefits of this PIB?
Nigeria stands to benefit a lot if the PIB is passed into law and there are reasons for that because the bill has the capacity to attract investments and generate employment, which means that it will keep idol hands busy and significantly reduce crime. The passage of the bill also has the capacity to reduce violence, riots and demonstrations in the region where oil is being produced. It is likely going to lead to increase in the of crude oil production. The nation will have more funds for infrastructure, industry and other things. It is likely to bring transparency in the industry. There are strong provisions in the bill, which will enhance transparency in the conducts of the affairs of the industry. It has the potentials of making the Nigeria to benefit more in the signing of joint venture deals between the nation and the multinationals. Now another part of what the PIB can do, which will be of interest to Nigerians, is the tackling of environmental concerns, raking more revenue for government for the development. More funds at government’s disposal will empower the President and other officials of government to do more our people.
There were insinuation in some quarters that the sixth National Assembly could not pass the bill into law because a section of the country felt the PIB would benefit other sections of the country, particularly the oil producing region, and therefore that section of the vehemently opposed the bill. How would you react to this?
I don’t know why anybody will be against such a bill because it will put power back in the hands of Nigerians. Nigerians will own strategic national asset in the oil and gas industry. I don’t know why anyone or any true Nigeria will oppose such a bill, and so I don’t think the PIB will be serving the interest of any particular region. Far from it, I know that there is no iota of truth in that. The PIB will serve the interest of all Nigerians. If you talk about making provision for the people where oil is found, as a part of the process to reduce destructions of their environment and develop the area, I don’t see how that will hurt any other person outside that area. What they get will not hurt what you get. So I don’t see how it will serve any ethnic programme or any regional programme at all, except people choose to allow ethnicity or other consideration to becloud their sense of reason. Of course, that is the time any person will go and oppose the PIB, but again we have to wait until we see the content of the new PIB.
What can strengthen investment between government and private sector?
There is a provision in the earlier version of the PIB that says if you produce certain quantity of crude oil, it is mandatory that you must refine a certain quantity in country to meet national demand. The new bill is expected to address that in order encourage refining of fuel in Nigeria.
What is the House of Representative Committee on Downstream Sector doing to address all the issues meant to revamp the petroleum industry?
Basically, the role of the National Assembly is to make laws for the good governance of the country; making laws that will affect all the aspects of the economy and national life of all Nigerians. This is based on the fact the petroleum industry is the life wire of the Nigerian economy. It is understandable that our role is critical in the economic equation of the country. We at the House of Representatives are about to commence the process of passing the bill now that the Federal Government has set up a committee to draft a new PIB and eventually submit to the National Assembly a unified version of the PIB. There are many laws governing the petroleum industry that are under review. All of that are suspended now because we believed that the new PIB will unify and harmonise all existing laws governing the oil and gas industry, and so why do you seek the review of the existing law when you can assemble all of them together under a refined PIB and all-encompassing law. Another thing we are doing is to strengthen oversight functions over the oil and gas industry. That is why we are where we are right now. Unlike in the recent past, oversight function meant something different from what it is right now. Now if you tell any of the subsidiary of the Nigerian National Petroleum Corporation (NNPC) that the house committee is coming for oversight, they will take it seriously because they know that we ask critical question and not only asking questions, we are ready to bring those issues to public domain.
How ready is the House to tackle the issue of transparency in the oil sector?
We are beginning to pursue transparency in a dimension that was not witness in the recent past. So if you consider the fact that we have just been six months and we have done legislative business for less than five months, you will agree with me that we started well, that we are in the right direction. We may not have accomplished that but nobody expect us to accomplish much in a period of four to five months. The legislative process is usually tedious. It requires a lot of diligent; laws are meant to last all times.
What caused the initial delay and how is the House going to ensure that the bill is eventually passed into law without further hiccups?
I’m sure you understand exactly what happened to the initial PIB. The PIB is a product of the oil and gas study group that was set up by former President Olusegun Obasanjo. It was only brought the House in 2008. The last National Assembly did not move as fast as they should until the some people came up with politics of transition and man’s instinct to self-survival. People became more concerned about getting re-elected than addressing any serious mater. So, it is technically not our fault, not anybody’s fault that the bill was not passed before the end of the life span of that Assembly. Right now we are about to re-introduce. As I said, it was an executive bill and we are coming with another executive bill and because of the fact that we have various versions we thought it wise to tackle all the issues raised by all the stakeholders. One thing I can assure, which is strategic in the PIB deal, is that the moment the executive submits the new version of PIB, in six months, unless there is any other thing we can’t foresee for now, we shall be able to achieve substantial progress
ExxonMobil has just renewed its oil lease agreement with the Federal Government. Shell and Chevron are likely to do theirs in a matter of months. What will be the fate of these oil lease agreements when PIB is passed into law?
Three issues are involved. Firstly, nobody can predict the content of the new PIB coming to the House. Secondly, on oil lease renewal, every agreement has clauses and contents. No agreement is so sacrosanct that it cannot be reviewed and amended. If there is a provision that says at any point in time, as the law changes, it will affect already sealed deal, that has already taken cognisance of any new law that may come into force. Agreement always has rules for either reversing the agreement or re-examining the agreement. It is a general principle. The third issue is that nobody either corporate or individual is above the laws of this country. Anytime the law is passed it takes effect from that day. If you put these three things together, the renewed of the oil leases can be reviewed. Again, I will like to draw your mind back to the fact that for very many years in this country nobody was making investment in the upstream sector of the oil and gas industry and you know we cannot wait forever. We have to be sensitive to the fact that we need to balance our national interest with the economic reality. The economic reality is that Nigeria must keep going, we must get money to run the government, we must source money to services, to build infrastructure. At no point in time can we say we should shut down government until we pass PIB first and then ome back and start making money to run government, to pay teachers’ salaries or to send our children to school. We have no excuse of not providing health care for our community, if we are to be realistic.
The delay has caused a lot of held-back investment in the industry. What are the strategies on the ground for the House to ensure that the bill will not affect national interest?
Some investments have been withheld because international oil and gas companies would prefer a situation where things are done transparently in the industry, a situation that will them the opportunity to predict that, if they drill an oil block and that if they make the best offer, they will get it. They want a situation where, if they get into agreement, the agreement will be respected. Everywhere in the world, people will prefer a transparent system, a system that is accountable and a system that regulates itself. Obviously that is a preferred option but that is not what we have right now. So what we are saying is that PIB will guarantee transparency in the industry, the PIB will guarantee fair treatment and just treatment for everybody whether you are a Nigerian company or IOC, it does not really matter. The rules of this business will be known by every player and will be respected by everybody.
What is the role of the committee set up by the House of Representative to review the operations in the downstream sector?
Everybody will admit that there is significant difference between the last House and the current House even in public perception. I won’t comment on the probe itself or the investigation because, as lawyers will say, I will be judgemental on my part, which might influence the outcome of the final report. But one thing I need to point out is that the fact that the Senate is investigating the administration of subsidy and the Economic and Financial Crimes Commission (EFCC) is also investigating the administration of subsidy tends to one piece of fact, which is the fact that there is a moral question to be answered. It tries to point out that there is perception of corruption and that is not good for us as a people, it is not good to the image of the country, it is not good for the oil and gas industry and it is not even good for direct foreign investment.
What is the guarantee that this report will not be swept under the carpet like the report of the previous investigations?
I don’t sincerely think the report of the committee can be swept under the carpet, if you look at the calibres of members of the current National Assembly. They too are men who will not put their image at stake for anything. I can’t speak for the Ad-hoc Committee of the House of Representative and I cannot speak for the Senate Committee. They can speak for themselves. But one thing is sure and that is the fact that report will certainly come before the House. It will be extensively debated, decisions will be made and I can assure you that whatever decision that is made by the House, many persons as individuals and as an institution will follow it up to the later to ensure that is it is implemented. It will certainly not be swept under the carpet. Too many persons have their reputation at stake. We will not sacrifice our reputation for anybody. There will be no sacred cow now.
The Minister of Petroleum just set up a task force on the oil and gas industry, which seems to usurp the responsibilities of the Nigerian Extractive Industry and Transparency Initiatives (NEITI). How would you explain these conflicting roles?
I can’t speak for the executive arm of government, but I must say there is no conflict. The committee set up by the Minister of Petroleum Resources reports to her and it is just to assist her in doing her work. The task force does not report to Nigerians. Everything about the task force ends with the Minister of Petroleum. The Nigerian Extractive Industry and Transparency Initiatives (NEITI), which is set up by the Act of National Assembly, reports to Nigerians because its report must be submitted to the National Assembly and not to the Minister of Petroleum Resources. So, if the Minister of Petroleum sets up a force on the industry, it is her business and it is to enable her do her job as a minister, but NEITI is a national issue and its report must be submitted to the National Assembly.