Despite the laudable expectations from the yet-to-be passed Petroleum Industry Bill, there is the other side of the bill that has been giving stakeholders in the industry a lot of concern. Some industry analysts have said some sections of the bill negate the very essence of the bill and that unless sponsors of the bill take a second look at these salient issues, there might be crisis even after the bill must have been passed.
Among the major concern is that the PIB intends to turn the national oil companies into corporations instead of limited liability companies. To ensure efficiency and effectiveness, the institutions to be created were supposed to have a source of funding that gives them some level of independence and control so as to enable them compete effectively with other operators or function properly as they are expected to – were they to be regulators.
The Bureau of Public Enterprise (BPE) for instance, has picked holes in the bill. According to the agency, most of the institutions to be created, by the time the bill is eventually passed, would still depend on the government for budget.
Such a situation, it is feared, would kill the initiative that is expected from the new institutions in the sector.
The mechanism for this was to be achieved through several charges, including 12 cent per barrel for the Petroleum Inspectorate Commission (PIC) as well as one percent charge of fiscalised crude oil that would have been made available to the institutions.
The amount was considered adequate by experts. Invariably, the lean purse of the Federal Government would now have to be shared by the oil sector and other competing sectors of the economy- essentially, the status quo ante is being maintained and entrenched.
According to Malo Yunana Jackdell, the Bill sought to insulate the national oil Company (NOC) from liability from civil proceedings by providing in section 118(5) (a) a protection clause from litigation in certain actions. Similar provision was made in section 140 requiring that if there is a suit against NOC, a member of the governing board or a staff must be commenced within 24 months of the cause of action and that a suit against NOC cannot be commenced without first giving 30-day notice to the company.
He said if the NOC is a private limited company, then this provision ought not to be there as it applies only to the public corporation and public offices. “The provision in section 199(g) which empowers the NOC to undertake divestment and acquisition invariably means that NNPC has empowered itself to privatise its property. By the provision of the section 120 (a) and (d) NOC will be empowered to hold on to existing facilities as well as acquire new ones.
Again, under section 136 (b) NOC will keep the proceeds of divestment to itself which is contrary to the current requirement whereby proceeds of privatised companies are paid into government coffers.
By the provision of part 111, section 193, the PIB jettisoned the idea of incorporation of joint Ventures (JVs) as a key feature of the reform. It provided that the commission shall make regulation providing for the funding of joint ventures operations between the NOC and it joint venture partners.