In the heat of insecurity in parts of the northern part of
Nigeria, and sundry    distractions,
President Goodluck Jonathan seems obviously bent on accomplishing one of his
major pre-2011election promises – to end chronic power shortage in the country.
And he intends to do this by ensuring that the Petroleum Industry Bill (PIB) is
passed in its present state.

But with the lawmakers in the National Assembly (NASS)
picking holes here and there in the PIB, particularly with what they see as
undue powers given to the Petroleum Resources Minister, Diezani Alison-Madueke
and the President, this seems unlikely.

The lawmakers are particularly vexed because from their
perspective, besides giving too much power to the Oil Minister, Jonathan’s
committee also added a clause in the new draft that permits the President to
unilaterally give oil licenses out. This they consider as both powers beyond
the President, and a usurpation of the powers of the legislature.

The question, therefore, is will the PIB have a better
outing in the NASS this time around when the parliament return from recess in September?
What with the determination of rebellious lawmakers to test President
Jonathan’s resolve to push the bill through the way it is?

In a recent interview with Reuters, most of the lawmakers
minced no word in saying that the PIB, which had been stuck in the parliament
since 2008 when it was introduced by the late President Umaru Musa Yar’Adua-led
federal government, will not have an easy ride come September.

From the perspective of President Jonathan, if the bill is
passed, it could restore his presidency, which had been seriously battered by
Islamist insurgency in the north, an abortive attempt to remove a popular fuel
subsidy and a raft of corruption scandals since winning the election last year
April. His team had thus made it clear that they expect a swift passage of the
draft he had signed off on.

In the words of the West African analyst at Control Risks,
Roddy Barclay, “As a President who came to power with a landmark reform agenda,
the passage and in implementation of the PIB will provide a key gauge of
Jonathan’s performance in office.

“Having suffered numerous damaging public scandals in recent
months and making headway on his key piece of legislation would go some way to
restoring his international standing”.

The President’s explicit endorsement of the bill gives it a
better chance of passing compared to previous versions, but his increasingly
tense relationship with parliament means that he is likely to have to concede
some ground or face embarrassing delays.

While speaking to Reuters, spokesman for the House of
Representatives, Zakari Mohammed, puts it thus: “We will not be subjected to
pressure to pass the PIB. It will not get a speedy passage but a thorough
passage”.

Another member of the lower House, who spoke to Reuters
anonymously, painted a better picture of the imminent tug of war awaiting the
debate on the PIB when he said ‘we’ve seen the powers given to the oil minister
in the PIB and there is no way we’re going to allow our heritage to be handed
over to any individual. We want this to pass and it will, but not just the way
the President and the oil minister want”.

The apparent disagreement between the Executive and
Legislature not-with-standing, a section of Nigerians believe that the
misunderstanding could also turn out to be the best thing that can happen to
the country in the face of suffocating corruption and distrust in the Nigerian
system.

For Clement Nwankwo, a Director at the Policy and Legal
Advocacy Centre in Abuja, “this unfavourable sentiment towards the President
and oil minister may actually be positive towards giving Nigeria a reasonably
acceptable PIB”.

The questions thus arise: why the hullabaloo over what would
better the lives of Nigerians? And Who benefits by this prolonged imbroglio?

The original PIB as presented to the NASS in 2008 was
designed to force Nigeria’s oil sector to conform more closely to international
norms. The fiscal terms of oil production were to be amended in order for the
government to collect more revenue while the state-owned Nigerian National Petroleum
Corporation (NNPC), distinctly lacking in accountability, was to have its
regulatory powers removed. These would be entrusted to the commercial sector.
However, it seems the bill has been greatly watered down.

The restructuring of the industry as proposed by the PIB
would see the establishment of the National Petroleum Commission, which would
be run by a board chaired by a federal minister. It will have the overriding
responsibility of formulating policies for the administration of the industry.

The bill states categorically that the commission under the
Act “shall have power to coordinate the activities of the petroleum industry
and exercise overall supervisory functions over petroleum operations and all
the institutions of the industry.”

It also provides for the creation of some agencies out of
the present Nigerian National Petroleum Commission, while it would transform
into the National Oil Company.

The PIB is expected to bring root and branch reform to an
industry that produces 80 percent of government revenues but has been plagued
by corruption and mismanagement for decades.

The wide-ranging bill would change working terms for major
oil companies like Shell and Exxon and partly privatise the national oil firm,
but has been held up as government, oil firms and other key benefactors argue
over terms under various guises, mostly guided by selfish interest.

This widely believed to have been given credence by the fact
that heading President Jonathan’s reform team is Diezani Alison-Madueke. She is
the Minister of Petroleum Resources and also a former director of Shell
Petroleum Development Corporation. This employment history is seen as being
capable of potentially posing a conflict of interests.

The same interest comes to the fore when it becomes glaring
that some aspects of the bill are being contested by international oil
companies. They include areas that have to do with tax regimes that tend to put
more burdens on such companies and make them more responsible in the way they
do business in Nigeria. Captured under the Nigerian Hydrocarbon Tax, operators
would be required to pay taxes on gas products separately as against what it is
now.

Close observers of the industry believe that Shell is one of
the biggest beneficiaries of the murkiness of Nigeria’s oil sector. The attempt
by the sixth National Assembly (2007-11) to pass the Petroleum Industry Bill
was allegedly cut short due to movements by international oil companies.

In 2010, for instance, leaked United States diplomatic
cables quoted Ann Pickard, then Vice-President of Shell for Africa, boasting
about how Shell encouraged employees to infiltrate all relevant government
agencies.

Secondly, while some sections of Nigerians suggest that the
expected reforms would convert NNC into a profit centre, this may perhaps
amount to being overly optimistic because as long as the NNPC remains an
appendage of the executive government and an epicentre of patronage, this
change may not be plausible.

While baring his mind on the bill, Chairman of the Senate
Committee on Petroleum (Downstream), Senator Magnus Abe, said it should not be
a surprise that a revolutionary piece of legislation like the PIB is attracting
this kind of resistance in the legislature.

According to him, “There is no way you will make such a revolutionary
reorganisation of the oil industry in this country without going through
challenges. I think it will be naïve of any Nigerian to think so. I know for a
fact that there are a lot of interests: economic interests, political interests
and social interests that are tied to the oil sector.

“In dealing with a subject like the petroleum industry bill,
which seeks to reshape the industry, recreate it and remake it on a commercial
basis, we will take out a lot of the waste and the unnecessary patronage that
is currently associated with the industry, and I don’t think that we can
achieve that without some level of turbulence and challenges.”

One way out of the mess in the oil sector, he continued, is
for the National Assembly to “put the interest of Nigeria first, finding a
common ground and passing a law that would enable the petroleum industry to
develop for the benefit of the people.

“I know that oil industry players would have their own
interest, which they would like to see written into the law; but we are
Nigerians, the resources belong to us and it is the interest of our people that
we should promote over and everything else.

“We also have to remember that in promoting the interest of
our people, we must make sure that those who participate in the industry can
get fair returns for their investments because if they don’t get it, then even
trying to get something for your own people will be useless.

“It is not rocket science. There are existing models in
other societies that they have used and it is working and has worked very well.
You can even take the case of Malaysia, we have Petronas; in Brazil, you have
Petrolbraz and the Libyan Oil Company.

“All these are reformed oil sectors that have resulted in
the national oil companies themselves becoming major economic and big time
players in the industry. They are even investing in other societies outside and
bringing home profits from their investments.

“But instead, our own NNPC is a source of debt, a source of
patronage, is a source of waste; it is a source of mismanagement of the oil
industry. So the PIB is supposed to take care of all that and any time you want
to change something that people are benefiting from, there is bound to be
challenges. You know that that is always the case, people don’t give away their
benefits,” Abe said.

President of the Senate, David Mark, has also promised that
the bill would be given due attention once it comes before the Senate, noting
that “the problem with the PIB was that when it showed up, there were so many
versions. As many as three or four versions were in the hands of senators and
members of the House of Representatives.”

He however said, “If we are to build the sector, we have to
get the bill off the ground and this is why it is necessary for cooperation
between the legislative and the executive.”

If the Chambers are so determined, then, an end to this long
journey seems near. One certainty is that whatever the bill looks like at the
end of the day, passing it would at least end the uncertainty that had
prevented Nigeria from holding an oil licensing round for over five years.

Again, if it is passed with the sole interest of the
Nigerian populace at heart, it will not only attract investment into natural
gas in the country, but also be the beginning of an end to chronic power
shortages. This is obviously the kind of legacy President Jonathan would want
to bequeath to future generations of this great country.