Nigeria Reverts To “How NOT To Run An Oil Industry” -United Capital
By Olumidagreaton August 30, 2018
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The Nigerian Senate passed the Petroleum Industry Governance Bill (“PIGB”) into law in May 2017. This was followed by a similar action by the House of Reps in Jan-18.
After due consideration by the joint committee, the harmonised version of the bill was transmitted to The President in June-2018 for his assent. Shockingly, the President declined to assent the Bill, maintaining that it will reduce the power of the minister.
We think this is a major setback for the Nigerian oil industry given that the PIGB was drafted to: harmonise regulation in the industry (currently carried-out by the DPR, PPPRA & NNPC), reorganise the operation of the NNPC for efficiency, promote transparency and accountability in the administration of petroleum resources, and foster a conducive business environment within the sector.
The above implies that benefits of the PIGB such as harmonised regulation -which should streamline licensing, waivers, tax processing, crude oil export certificates, and approvals, at a lower cost- will be jettisoned.
Also, the power of the executive will remain absolute in the Nigerian oil industry as the checks & balances modelled into the PIGB will remain ineffective.
Finally, investment into the sector, which has been stalled for years due to the none passage of the PIB, will remain on the sideline