Energy

Nigeria doesn’t have oil-powered economy but extractive industry-Says Experts

Centre for Financial Journalism/Facility for Oil Sector Transformation
Roundtable Dialogue on PIGB held on 30th May, 2018, in Lagos.

Communiqué

1. Roundtable participants reviewed the current status of the entire Petroleum Industry Bill (PIB) with particular reference to Petroleum Industry Governance Bill (PIGB) already passed by the National Assembly but yet to be signed into law by the President, noting that other aspects of the Petroleum Industry Bill are yet to be fully articulated.
2. The Roundtable noted with deep sadness the delay in passing the PIB into law since it was introduced about 17 years ago.
3. The Roundtable noted that Nigeria as at present does not have an oil-driven or oil-powered economy as testified to by the nature of cyclical crisis of the oil sector over the arch of time and space. What the country has is an extractive industry that is unfortunately based on vertical operations that cost humongous amount of financial resource, in addition to the dysfunctional structures that compose the oil and gas sector. This is why the entire Nigerian political economy has not arrived at the height desired so far in comparison with other oil-producing countries both within Organisation of Petroleum Exporting Countries (OPEC) and outside it.
4. The Roundtable identified the challenge of poor management of the oil sector over its history as the main issue to be addressed in the formulation of policies for the oil sector in the new era. The Roundtable calls on government to always have national interests as the major consideration in the appointments into the core operating complexes in the oil and gas industry that require technical and substantive professionalism and not political loyalty.
5. The Petroleum Industry Bill and particularly the PIGB are meant to take control of the industry through legal frameworks that will enable them work for the development of the Nigerian economy and welfare of Nigerian people.
6. The PIGB deals essentially with the institutional framework in contra-distinction with the “governance” structure which is taken care of by the entire PIB. The Roundtable noted that this distinction is necessary in order to remove confusion in its semantics.
7. The Roundtable calls on government to take the entire PIB seriously and ensure the passage of the various aspects of the Bill expeditiously. In this regard, government should continue the paradigm shift in setting the fiscal framework and not just the “governance” or administrative framework; promote and ensure that dry gas works; deliberately incentivize gas production for wider domestic utilization; incentivize local participation in the petroleum economy; manage transition from the current regime; ensure a robust manpower strategy and deliver the reforms as anticipated in the various bills; ensure petroleum policy continuity to make it fit into the expectations of Nigerians.
8. The Roundtable reviewed the economy from a holistic perspective and noted that the nation is at the precipice of an economic catastrophe despite the current appreciation of oil prices in the international market because of conspicuous lack of alternative economic bases amidst the dangers of negative dynamics that we are currently witnessing in the global oil market. What is at stake here is the collective economic existence of Nigeria as a people and nation. The Roundtable therefore calls on government to take the advocacy of strategic initiatives involved in the diversification of the economy seriously and not merely pay lip service to it.
9. The Roundtable called on all stakeholders, including the government, the National Assembly, inter-governmental organizations, the non-governmental and civil society organizations, even the international oil companies and international NGOs involved and engaged with the legal reforms in Nigeria to take critical look at various aspects of the PIGB before it is finally signed into law.
10. Journalists, particularly financial journalists, are enjoined to update themselves with latest development not only on the Petroleum Industry Bill and/or PIGB but more on oil and gas industry locally and globally in their reportage and analysis. They should regularly upgrade their knowledge and skills so that they can report the oil and gas industry effectively.
11. Participants thanked the organisers for putting together the Roundtable for the pubic enlightenment on the PIB through the media. Participants called upon the organizers to come up with this programme periodically for the benefit of the Nigerian public.

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