Petroleum Industry Governance Bill: A good Reform In Oil And Gas Sector

Mr. Lumumba Okugbawa, General-Secretary, Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), affirms that Petroleum Industry Governance Bill (PIGB) is a great tool for achieving effective reform in the oil and gas sector.

In this interview with Mr. Audu Liberty Oseni, the editor “Extracting Accountability” he speaks on some topical issues. Extract:

Q: There have been shocking revelations of fraud in the oil subsidy regime; do you see the government convicting the subsidy thieves?

A: we must give the present administration kudos; they have shown commitment to fighting corruption, but, corruption is also fighting back. Some People are using the gaps in our legal system to frustrate the anti-corruption fight.

The government should show its seriousness by promulgating a specific law that will make it easy and possible for an accused to be convicted on the availability of tenable evidence. Some persons became sudden billionaires because of subsidy fraud.

The government needs to empower the institutions that are fighting corruption; the government has all the powers to nip corruption on the board. Many who have been arrested claim it is a witch hunt, and they often forget that they played a huge role that has put the country in a mess.

Q: The Senate has passed Petroleum Industry Governance Bill (PIGB) do you see this legal framework addressing corruption in the oil and gas

A: we have prayed for this Bill to come, we need a law that governs the oil and gas industry, what we have is the Petroleum Act that is obsolete and cannot be relied on. Although there are various interests that have stalled the Bill for a long time, we believe when it becomes a law it will bring major reform in the oil and gas sector.

Q: PIGB proposes replacing NNPC with another agency; do you see the corporation key into this?

A: the Nigerian National Petroleum Corporation (NNPC) made their inputs into the Bill, what they are putting is the National Oil Company NOC, what will change is just the name, NNPC is still the National Oil Company, and they will simply change the name which will not affect the function.

Q: As a member of (PENGASSAN) are you satisfied with the consultation and engagement of the National Assembly on the Proposed Nigeria Liquefied Natural Gas (NLNG) Amendment Act

A: there was no time PENGASSAN appeared before any public hearing in the National Assembly as regards the proposed amendment, and that shows there was little or no engagement.  If there was enough engagement there would have professional inputs.

They keep saying why is PENGASSAN against the amendment, for the record, it took almost 25 years for Nigerian state to establish the NLNG and to get investors to come in and invest.

The investors have put in 6 billion USD, and government paid about 49 percent of it. As at today, NLNG has paid the Nigerian government 15 billion USD dividend, so which other business is better than that.

In the NLNG Act, there is assurances and guarantee for investors, and now you are changing the rules. Obviously, investors’ confidence will be dampened.

What scares investors away from us is the change of laws and policies. As an investor, before I put in my money, I have to be sure; the laws and policies will not change all of a sudden.

If the amendment is allowed to go through, it will discourage investors not only in NLNG but in other areas.

NLNG has been a model; it is the most successful establishment with 100 percent Nigerian management and 95 percent Nigerian workforce.

When they say Nigerians cannot do something, NLNG is the one you can make reference to. And somebody is coming somewhere and using semantics to convince us.

If the argument is based on the three percent, who are you collecting it for, who owns the NLNG? Shell and other oil companies are already paying their three percent to NDDC, so is like double jeopardy.

You do not kill the goose that lay the golden eggs because of interests. This will spoil investors’ confidence and Nigeria will be the looser on the long run, and these are the thing we want those who are pushing for the amendment to know.