Fresh indications emerged yesterday that the Federal Government would scrap 10 federal agencies, including the Nigeria National Petroleum Corporation (NNPC) upon the approval of the Petroleum Industry Bill (PIB) by the National Assembly.
Other federal agencies that would be affected by the passage of the new PIB are the Department of Petroleum Resources (DPR), Petroleum Technology Development Fund (PTDF) Petroleum (Special) Trust Fund, Petroleum Equalisation Fund (PEF), Petroleum Profit Tax and Deep Offshore and Inland Basin Production Sharing Contracts, Motor Spirits (Returns) and Associated Gas Re-injection and Oil Pipelines, among others.
A member of the PIB Drafting Committee, Dr. Francis Adigwe, gave the hint at a workshop convened by the Senate Joint Committee on PIB chaired by the Chairman of the Petroleum Resources Committee (Upstream), Emmanuel Paulker. Adigwe said the passage of PIB into law would bring about the repeal of 10 existing Acts, adding, however, that not all laws relating to oil and gas would be repealed.
He further explained that, “the existence of the PIB law would bring about creation of 10 new agencies that would be coordinated by the minister of petroleum resources, who is to be treated as an institution and not as a person.
“The concept of the minister in the new PIB is as an institution and not a person because provisions in the bill make a sitting minister of petroleum resources to have sweeping powers such as powers of coordinating and regulating the critical areas of the oil and gas sector. “The minister will also advise the president on the appointment of all the chief executive officers of the new agencies, including the upstream petroleum inspectorate and its downstream counterpart, which is not available in the current Petroleum Act.”
Meanwhile, an expert in the petroleum industry, Prof. Dagogo Fubara of Kariala Konsult Nigeria Limited, said the 10 percent of oil companies’ net profit to be set apart for the host communities should be reviewed upwards. Speaking at the one-day forum on PIB organised by the Senate Joint Committee on PIB, Prof. Fubara described the figure as inconsequential and called for full royalties from oil and gas companies to the petroleum producing communities.
“The quantum is inconsequential for the purpose of the fund of the host communities. It is the practice all over the world that rents and royalties from oil and gas are paid to the host communities.
“All royalties and rents from oil and gas should be paid to the state, local government and communities where the oil and gas is extracted at a rate similar to what it was before the 1969 Petroleum Act. “Having a single fund for all the communities as proposed in the bill will be unwieldy, unmanageable and cumbersome to administer transparently, openly and expeditiously with accountability. “Having distinct host community fund will be more definitive and enable each of the communities benefit maximally.
It will also enhance peace and harmony between the companies and host communities.” The speaker also kicked against the power of the president to grant and lease oil blocs in special circumstances as stipulated in the new oil law. According to him, such power was inconsistent with the objectives of the bill and as such, should be expunged. “It is inconsistent with the objectives of the bill and leads to continuation of a lot of entrenched corruption and abuse of power, negating all other commercial processes established in the bill.”
Various experts who delivered papers at the workshop expressed the opinion that the powers given to the president and the minister of power and in respect of the oil and gas industry were enormous and might be abused. Unlike the extant Petroleum Act, which PIB sought to repeal and which gave the power to allocate oil blocks to the petroleum minister as an institution, PIB sought to reside that power solely in the president.
Earlier, Paulker reminded the experts that the Senate Joint Committee on the PIB had an open mind to the new petroleum law, which was why the lawmakers invited the drafters of the bill to elucidate and educate them on the provisions in the new oil law.
Paulker said the workshop was intended to give update information on the bill before the scheduled public hearing. “We are engaging services of professional to enlighten us on the bill once more so that when we go out for public hearing in various locations, we would be versed in everything concerning the bill.”
Source: Sun News
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