Oil & Energy

PIB: Eight Years In Limbo

Published

8 years ago

February 29, 2016

President Muhammadu Buhari and Senate President Bukola Saraki

When President
Umaru Yar’adua, of blessed memory, assumed office in 2007, the unending crisis rocking the nation’s oil sector, could be said to be at its peak.
He was welcome into office by a turmoil occasioned by mass protest over an overnight and unwarranted increase in the pump prices of petroleum products, inherited from his predecessor, ex-president Olusegun Obasanjo.
As expected of a leader who has the feelings of the people at heart, Yar’Adua, reverted the new pump price to normal, rendering the land mine on his administration impotent, and the masses, ended the protest.
But, he also had the problem of the then Niger Delta militancy (the freedom fighters as they chose to be called), confronting him. There is no gain saying the fact that the colossal destruction caused by the activities of the Niger Delta militants on the nation’s oil and gas infrastructure in the region, brought Nigeria’s economy on its knees.
Again, as expected of a peaceful and caring leader, Yar’Adua intrdocued his famous Amnesty Initiative. Consequent upon this, the staccato sounds of the militants’ guns and the booms of their bombs stopped thereby giving way for peace.
Apparently, after giving a deep thought on the oil sector, considering the fact that it is the lifewire of the nation’s economy, Yar’Adua initiated the Petroleum Industry Bill (PIB) as a master plan towards bringing sanity in the sector.
The PIB which Yar’Adua presented to the National Assembly as Executive Bill in 2008 stirred up wide jubilation amongst natives of oil-bearing communities because it promised them 20 per cent of equity in oil production. The bill equally promised other goodies to other stakeholders.
However, like a pregnant woman happily welcome into the labour room, eight years after, neither the voice of the child nor that of the mother has been heard as the National Assembly members are yet to agree on issues concerning the PIB. The euphoria that greeted the idea of PIB has given way to anxiety, suspicion and fear.
Is it that the PIB idea is bad and contradicts all expectations of the National Assembly? Such that the lawmakers cannot find any useful thing in the bill? Is it that the alleged cartel that determines what happens in the Nigerian oil sector is not happy and has decided to frustrate and kill the people’s bill? What exactly is the matter with this bill which in many analysists’ views holds a lot of promises to the people?
When Nigerians waited till the end of the sixth National Assembly (2007-2011) and did not see the bill transform into an Act of the Parliament, the impression then was that, because of the high level of importance attached to the bill and the need for the law makers to do thorough work on the bill, it could not be concluded.
But when the then Senate President, David Mark was concluding activities of the 7th National Assembly in 2015 and hurriedly ‘passed through’ his basket full of bills, concerned Nigerians were disappointed that the PIB was not one of the many bills that graduated to Acts of Parliament.
A group, the Environmental Rights Action/Friends of the Earth Nigeria (ERA/FoEN) expressed dismay over the failure of the National Assembly to pass the bill, attributing it to politics.
Executive Director of the group, Godwin Ojo, had during a press conference in Lagos accused some of the lawmakers of falling prey to the influence of the oil multinationals who fear that the PIB would rob them of so much unabridged fortune they have been having as far as the nation’s oil industry is concerned.
To Ojo, “some of them became the mouth piece of Shell and other oil companies that threatened to pull out of Nigeria’s oil and gas operations if the PIB was passed.
“They not only betrayed the wishes of the people but succumbed to cheap blackmail of the oil companies that the PIB would render the oil and gas industry unviable”.
It would be recalled that apart from the one submitted by President Yar’Adua, which did not attract the attention of the lawmakers, ex-President Goodluck Jonathan re-introduced the bill to the National Assembly in 2012, which could also not attract the attention of the parliament.
The National Co-ordinator, Niger Delta Youth Coalition (NDYC). Prince Emmanuel Ogba, regretted the attitude of members of the National Assembly to the bill, saying their standing on the way of such a bill shows that the interest of the people was not the main business of those up there, and urged the present senate, led by Bukola Saraki, to make a difference.
Ogba expressed the view that giving 10 per cent of the equity to the host communities would go a long way in bringing peace both for the community and the oil multinationals. This according to him, would provide the conducive atmosphere for better oil operation that would benefit the host, the oil companies and the government.
The youth leader blamed the Federal Government for shortchanging the oil-bearing communities by not providing social amenities as road, water, schools, health infrastructure etc.
“You see, because the oil companies are the ones the community people always see physically, they transfer their grievances to the companies for not providing the infrastructure while in the actual sense of it these should not be the responsibilities of the companies.
In his own reaction, the publisher of News Africa Magazine, Mr Moffat Ekoriko, described the PIB as a National disgrace in that the sixth and seventh National Assemblies could not give Nigerians any explanation as to why they were not able to pass the bill.
“If we are to believe what we got from the grapevine, two factors were responsible for trauncating the bill. Inducement by the multinational oil companies and ethnic interest. Ethic, in the sense that most provisions of the bill were seen as being more favourable to host communities”, he said.
Ekoriko, in an interview with The Tide, said the oil multinationals were uncomfortable with the aspect of the bill which gives 10 per cent equlity to the host communities and the incentive for deep offshore.
“If we are to believe those rumours, it then calls to question the sense of patriotism of the Sixth and Seventh Assemblies”, he said.
The News Africa publisher advised President Muhammadu Buhari to invest his political capital in getting the bill passed, noting that since APC controls both Houses of the National Assembly, there is no reason why a president who is so fair as Buhari cannot wield his party into line.
Another alternative, he said, is to break up the bill so that the non-contentious aspects can pass. He suggested that Buhari should consider leaving the 10 per cent equity to host communities and the incentives for the deep offshore operations and pass the other less contentious aspects of the bill.
“Over the years, the government has been failing the oil communities. They collect tax and always fail to provide amenities. What the oil firms should do is to provide ‘jara’, but ‘jara’ can’t substitute the real thing”, he said stressing that oil companies cannot translate into government of the Niger Delta such that you expect them to provide water, road, healthcare and wondered what should be the responsibilities of the government.
Ekoriko also blamed the interventionist agencies as the Niger Delta Development Commission (NDDC) for lack of clear focus on what to provide.
“While NDDC goes into skills acquisition agriculture, primary healthcare what should go to LGAs and state government, it becomes Jack-of-all-trade and master of none”, he explained.
He said what the region needs is infrastructure as rail line connecting Niger Delta, good road network to make the economy of the region to take off and challenged the Niger Delta Ministry and other relevant agencies to be focused on their statutory responsibilities.
The PIB which should serve the interest of well-meaning Nigerians and stakeholders in the oil sector is one that would fairly address their peculiar needs and fears since it is by so doing that all stakeholders would work as partners in progress.
This spirit will bring to an end the so much acrimony where communities see the oil firms as those short changing them.
The Federal Government which defined and enjoys 60 per cent equity in the joint venture, should be alive to its expected responsibilities to the host communities.
Nigeria desires a PIB that would take definite stand on the issues of gas flaring , oil spill clean-up, local or Nigerian content particularly on expatriate quota, contract awards and also bring an end to the enigma of casualisation in the oil industry.
Those who are so worried about the ubiqiutous influence of the oil multinationals should also know that as stakeholders, the multinational oil companies would not fold their arms on an issue that affects their business interest in Nigeria.
But what one expects is that members of the National Assembly, particularly those from the Niger Delta region should stand up in the interest of Nigeria and not allow themselves to be bought over by other forces protecting their own interest since they are voted to serve their people.
If a thorough job aimed at providing an effective PIB, fair to stakeholders, is done the fear is that there might be a PIB that would be watered down such that it would lose its essence.
The initiator of PIB, Yar’Adua, was a Niger Delta friendly President, same way Goodluck Jonathan was a Northern friendly President and did more for the north. Buhari should declare his position on PIB.

Chris Oluoh

Oil & Energy

NSCDC’s Anti-Vandal Squad Uncovers Artisanal Refinery In Rivers Community

Published

4 days ago

April 15, 2024

The Tide

The Anti-Vandal Squad of the Nigeria Security and Civil Defence Corps (NSCDC), Rivers State Command, has uncovered yet another local refinery situated at Adobi-Akwa settlement in Etche Local Government Area of Rivers State.
The State Commandant, Basil Igwebueze, disclosed this while speaking to journalists shortly after the tour of the Illegal site.
Represented by the Head, Anti-Vandal Squad, CSC Peters Ibiso, Igwebueze said the squad made the discovery following a tipp off, expressing regret that no arrest was made as the boys fled the site upon sighting the squad.
The cammandant’s representative took the newsmen across a tick forest of about 6-7 kilometers from the main town.
The team sighted where the pipeline vandals tapped into the Well Head of yet to be ascertained multinational company, connected their galvanised pipes to several cooking pots, heat up the crude to produce Automotive Gas Oil (AGO).
In his words, “Upon receiving a tip-off, the Anti-Vandal operatives swung into action to uncover this illegal oil bunkering site. They were in this forest for two days having cordoned the area, unfortunately, the perpetrators upon sighting our men took to their heels, but investigation is still ongoing to effect the arrests of such defiant elements”.
The Anti-Vandal Unit Head further narrated the operation techniques of the operators of local illegal refineries from the point of extraction of crude through vandalism of oil pipelines to cooking in various ovens where the content is subjected to high temperature and transmitted through pipes to reservoirs for storage and onward trans- loading to buyers.
While insisting that the command would not relent in the fight against illegal dealings in petroleum products, he urged the public to have more trust in the NSCDC by providing actionable intelligence that would enhance possible arrest of economic saboteurs in the State.
“Our commitment to continuously work in tandem with the prosecutorial mandate of the corps in order to rid the State of economic saboteurs remains unchanged. We value our informants and most especially the intelligence driven tip-off received from time to time.
“It is also our duty to ensure that our source of information are not disclosed so as to protect our informants. It is therefore our delight that the public will continue to have confidence and trust in us as we together protect the nation’s critical national assets and infrastructure from dare devil vandals”, he stated.

By: Lady Godknows Ogbulu

Oil & Energy

Oil Fund Withdrawals Suggest Extended Price Rally

Published

4 days ago

April 15, 2024

The Tide

The world’s largest crude oil exchange-traded fund has bled over $2 billion in less than a year. And it i
s not due to investors finding greener pastures elsewhere with other ETFs; it is the siren call of soaring prices that is prompting this mass exodus.
The WisdomTree Brent Crude Oil exchange-traded commodity had assets under management of some $2.5 billion last summer, according to Bloomberg. Now, the publication reports, this is down to $396 million, with withdrawals accelerating over the past few days.
In that, withdrawals seem to be following price trends. Brent earlier this month topped $90 per barrel and, after a short pause earlier this week, is back above that threshold again following the latest Israeli strike on the Gaza Strip amid reports about a possible ceasefire.
While it is true that prices are currently driven higher mainly by geopolitical events, fundamentals are also at play. A growing number of forecasters are updating their predictions for benchmarks this year on expectations of resilient demand and increasingly tighter supply. And investors are following the trend.
Even those who have not sold their ETF holdings in order to invest more directly in the rally are benefitting. That same WisdomTree Brent Crude Oil ETC generated returns of over 13 percent during the first quarter of the year as opposed to an average 8.8% gain in the S&P 500.
The WisdomTree exchange-traded commodity became the world’s largest oil fund at the beginning of last year. The fund saw inflows of over $1 billion, which poured in as the deflation in oil prices that had begun in late 2022 extended into the new year. Now, the trend has reversed and it has reversed strongly.
The WisdomTree Brent Crude Oil ETC is not the only fund seeing outflows. The U.S. Oil Fund, which used to be the world’s biggest oil fund before the WisdomTree inflows last year and is now the world’s biggest oil fund once again, also saw a flurry of investor exits as benchmarks climbed higher.
According to Bloomberg, the fund’s assets under management currently stand at $1.3 billion, down from some $5 billion during the pandemic.
In further evidence that oil makes money, the Middle East is about to become the only region in the world with three trillion-dollar sovereign wealth funds. The Abu Dhabi Investment Authority is worth $993 billion, Bloomberg reported in March, while the Saudi Public Investment Fund and the Kuwait Investment Authority are breathing down its neck.
Meanwhile, investment in transition-related stocks is on the decline, according to data reported by Reuters. The S&P Global Clean Energy Index is down by 10% since the start of the year. In comparison, the S&P 500 Energy Index, which comprises Big Oil names, has gained 16.3%.
The data shows that investors are growing wary of all the promises made by transition advocates as evidence mounts that these were not based on due diligence. Wind and solar stocks suffered a crash last year when this first became clear.
Now, we are witnessing a continued awakening among investors to the challenges and the realistic potential of transition technology and alternative energy sources.
“With conventional energy having its own bull run, I think the alternative funds will struggle for the foreseeable future, and we shall see what the election brings”, the Managing Director of capital markets at Phoenix Capital Group Holdings told Reuters.
The comment summarizes the challenging situation for alternative energy investment and highlights the rebound of interest in oil and gas, much to the chagrin of decision-makers on both sides of the Atlantic.
In both Europe and the U.S., things can get even worse for the transition after the respective elections—in June for European Parliament and in November for U.S. President. It will certainly be an interesting year in energy.
Slav writes for oilprice.

By: Irina Slav

Oil & Energy

CNG Initiative: FG Targets 25,000 Jobs, $2.5bn Investment

Published

4 days ago

April 15, 2024

The Tide

The Programme Director and Chief Executive, Presidential Compressed Natural Gas Initiatives, Michael Oluwagbemi, has announced the Federal Government’s plan to target over 25,000 jobs and $2.5 billion worth of investment by 2027.
Oluwagbemi made this known during the Presidential CNG stakeholders’ engagement workshop held at BOVAS Auto-Gas Filling Stations, Ajibode Bus-Stop, in Ibadan, Oyo State capital, at the weekend.
He stated that the initiative, which was part of palliative measures to ease the burden of the removal of fuel subsidy, would attract enormous investment and job creation as well as impact positively on the lives of Nigerians.
Meanwhile, he called on Nigerians to embrace the new initiatives by the Federal Government as part of palliatives to cushion the effect of the removal of fuel subsidy in the country.
“On October 1, 2023, when the President gave his speech, he announced that the Presidential CNG initiatives are going to be rolled out as part of palliatives on the removal of fuel subsidy.
“One of our major concerns is to make sure that the transition for the transportation sector is a cheaper, safer, and more reliable source of energy.
“In the coming weeks, we are going to be announcing the conversion incentives programme which will enable Nigerians currently using PMS and Diesel fuel vehicles to be able to convert their vehicles at designated places across the country at a discounted price based on certain pre-qualification under the palliative programme of the Federal Government”, he said.
On the value chain of the initiative, Oluwagbemi explained that the Federal Ministry of Finance is acquiring tricycles and buses that would be assembled and manufactured in Nigeria, with more than five automobile firms being activated.
“The value chain of the programme starts with every one of us. From the point of converting your vehicle, you have created the demand for natural gas.
“If your vehicle is converted by technicians and refuelled by autogas workshops across the country, then you are creating jobs for civil engineers and technicians. You’re creating jobs for the upstream in terms of upstream activities associated with oil and gas.
“And in line with the programme, the Federal Ministry of Finance is acquiring a number of tricycles and buses that will be assembled and manufactured in Nigeria. More than five of our automobile firms have been activated. So, you can see that in terms of job creation, the opportunities for Nigerians are enormous.
“The President has said we need to convert one million vehicles by 2027. We need 1,000 conversion shops and we need over 3,000 filing stations just like this. You can imagine the level of investment required for this.
“In order to sustain one million vehicle conversions by 2027, we need 25,000 technicians. So, the job creation potential is an opportunity for job creation in addition to our gross domestic product, $2.5 billion worth of investment to be mobilised in the next four years and of course more than $25 billion added to our GDP”, he said.
Oluwagbemi further called on Nigerians to embrace the new initiatives by the Federal Government as part of palliatives to cushion the effect of the removal of fuel subsidy in the country.
The representative of BOVAS Filling Station, a private investor in the Presidential CNG Initiatives, Temitope Samson, said, “We have worked with the regulators, we are also working with the Presidential Initiatives on CNG to make sure that standard safety is adhered to. We have also worked with the Standard Organisation of Nigeria to ensure that we have a standard accepted internationally.
“Our role is to ensure that there is availability of CNG across the nation, and to also ensure we have enough kits and tanks that are converted for people to use as many as possible, and to ensure safety and to train others so that anywhere they get to, they have very safe conversion”.
Recall that last year, President Bola Tinubu approved the Presidential Compressed Natural Gas initiative(PCNG-i)
This initiative aims to not only introduce more than 11,500 new CNG-enabled vehicles and provide 55,000 CNG conversion kits for existing vehicles that depend on Premium Motor Spirit but also promote local manufacturing, assembly, and job creation.