Fresh Crisis Looms In Oil Industry, PENGASSAN Warns

The nation’s oil sector will be subjected to a higher level of instability owing to the continued delay in the passage of the Petroleum Industry Bill by the National Assembly, a new report has said.

The report was developed by the Petroleum and Natural Gas Senior Staff Association of Nigeria on the state of the petroleum industry and the association’s expectations from the new government, a copy of which was obtained by our correspondent on Friday.

The delay in passing the bill, according to the report, will aggravate the anxiety within host communities of oil companies waiting to benefit from the PIB’s provision of 10 per cent Host Community Fund and accept accountability for sabotage of oil installations in their areas.

The irregular funding of Joint Venture budget and the non-payment of cash call obligations in the face of the dwindling oil revenue, it stated, were likely to continue, thereby prolonging the era of economic volatility.

It will be recalled that on June 4 this year, the House of Representatives eventually passed the PIB along with a number of other pending bills. But the bill did not receive the approval of the Senate before it wound down its activities.

The bill, when passed into law, is expected to clarify the rules and procedures that will entrench good governance, transparency and accountability in the oil and gas sector as well the operational and fiscal terms that will enable Nigeria to competitively retain equitable proportion of revenue accruing from oil and gas industry operations.

PENGASSAN noted in the report that the country had not succeeded in integrating under one law the fiscal policies, instruments and institutions governing the oil industry.

It also stated that the industry’s legal/regulatory framework, which had been regularly subjected to ministerial discretion and fiat, would likely continue, notwithstanding that the development had significantly caused the suspension and diversion of several investment projects to other African countries.

According to the report, existing and prospective investors seriously yearn for basic incentives to stimulate their business interests across the industry’s value chain, and the delay in the PIB passage is, however, restraining the aspiration.

The report said, “There is the need for an all-inclusive stakeholders’ summit involving industry operators/players; representatives of the Presidency; National Assembly; security and service chiefs; state governments; ministries, departments and agencies of the government; the Nigerian National Petroleum Corporation; the Nigerian Extractive Industry Transparency Initiative; revenue offices; Nigeria Labour Congress/Trade Union Congress; the Nigeria Union of Petroleum and Natural Gas Workers/PENGASSAN, among others.

Source: ScanNews