President Muhammadu Buhari has the rare opportunity to etch his name in gold as his first term in office as Nigeria's leader winds down in a few weeks.
The president should as a matter of urgency pass the Petroleum Industry Bill (PIB) into law, a bill that has been in and out of the National Assembly since Nigeria returned to democratic rule in 1999.
The bill seeks to establish a framework for the creation of commercially-oriented and profit driven petroleum entities, to ensure value addition and internationalisation of the petroleum industry, through the creation of efficient and effective governing institutions with clear and separate roles for the petroleum industry.
President Buhari should be aware that Nigeria is ripe for a comprehensive review of the legal and regulatory framework applicable to its oil and gas sector and the PIB will undoubtedly benefit the industry.
The Buhari administration will do well to consider and give due regard to the genuine concerns of stakeholders especially the International Oil Companies (IOC) and oil producing regions of the country regarding what is perceived as the potential adverse impact of the regime proposed under the PIB.
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In 2013, Nigeria lost about N1.74 trillion to the absence of the bill, according to the Nigeria Extractive Industries Transparency Initiative (NEITI).
NIETI, in January 2018, also said the oil and gas sector lost over $10.4 billion and N378.7 billion through under-remittances, inefficiencies, and theft due to absence of a clear governance framework for the oil and gas industry.
Globally, oil revenues continue to fall and investments in the sector continues to dwindle. This fact should be a motivating factor for the government to join hands with stakeholders to reform the sector through the PIBs before the Nigerian economy collapses.
The descent of Venezuela to a failed state is a testament to what failure to reform the oil and gas industry could portend owing to the fact that, like Nigeria, the industry was the national cash cow and most critical sector of the Venezuelan economy.
Presently, all signs indicate that Nigeria’s oil and gas sector is overwhelmed by market and governance failures and things might get worse if the federal government fails to address the issue by instituting urgent reforms like the PIB.
All these and more are why President Buhari should prioritize the signing of the bill before the expiration of the 8th National Assembly.
The major reasons include:
1. Creating a conducive business environment for petroleum operations and effective governing institutions with clear and separate roles for the petroleum industry
2. Enhancing exploration and exploitation of petroleum resources for the benefit of Nigerians
3. Optimizing domestic gas supplies particularly for power generation and industrial development
4. Protecting health, safety and the environment in petroleum operations
5. Establishing a progressive fiscal framework that encourages further investment in the petroleum industry while optimizing revenues accruing to the government
6. Establishing commercially oriented and profit driven oil and gas entities
7. Deregulating and liberalizing the downstream petroleum sector
8. Creating efficient and effective regulatory agencies
9. Promoting openness and transparency in the administration of petroleum resources
10. Encouraging the development of Nigerian content for instance, the establishment of the Nigeria Oil and Gas Investment Pact Scheme, will ensure components of industry equipment can be manufactured locally
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