PIB: Oil workers reject new regulator’s powers

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The Petroleum and Natural Gas Senior Staff Association of Nigeria and the Nigeria Union of Petroleum and Natural Gas Workers have expressed worry over the powers conferred on the proposed Nigeria Petroleum Regulatory Commission under the Petroleum Industry Bill.

The oil unions, in a joint statement on three of the bills constituting the PIB, said such powers were too expansive and could be abused.

They recalled that one of the major concerns raised by stakeholders against the 2012 PIB was the excessive powers of the minister.

“The 8th National Assembly in their bid to address this problem seems to have inadvertently created a very powerful Nigeria Petroleum Regulatory Commission,” they said, adding that the commission might be as powerful as the minister under the Petroleum Act 1969 or the 2012 PIB.

The Petroleum Industry Governance Bill has been passed by the National Assembly, while the Petroleum Industry Fiscal Bill, Petroleum Industry Administration Bill and Petroleum Host and Impacted Communities Development Bill are still undergoing legislative process.

The unions noted that under the PIAB, the commission would be responsible for the administration of all acreages; vested with the power to grant, revoke, renew, modify or extend licences or permits including relinquishment of licences; authorisation to flare gas, and power to issue regulation detailing the mechanics for the imposition of a domestic crude oil supply obligation on upstream crude producers, among others.

They said, “In addition, the Petroleum Industry Governance Act 2018 transfers to the commission all the powers and duties of the minister under the Oil Pipelines Act Cap 07 of the Laws of the Federation of Nigerian 2004, Section 28(1) of Hydrocarbon Oil Refineries Act and Sections 3, 4 and 5(3). Also, various provisions of the Petroleum Industry Fiscal Bill 2018 gave enormous powers to the commission.

“We are worried that given the wide powers of the commission, we may witness a situation where a serving Nigerian President may appoint himself/herself as the chairman of the commission. The combined powers of the commission under the PIGB, PIFB and PIAB are too expansive and should be curtailed as the concentration of such powers in one body will create not only unnecessary bureaucratic bottlenecks but can also lead to abuse.“

According to the statement, Section 8(7) of the PIAB provides that the President may direct the commission to negotiate and award petroleum licences to qualified investors outside of the bidding process.

The unions said, “Although the section explains that any such awards may only be for strategic and bilateral purposes, it may still be subject to abuse. More so, as we have had occasions in the past when Nigerian Presidents and their petroleum ministers awarded lucrative oil blocks to themselves or their cronies.

“Routinely also, contracts and licences are awarded as political patronage or personal favours. This section, though qualified, provides a loophole for the continuation of such abuses. We therefore demand that this section be deleted in its entirety.”

On the PIFB, PENGASSAN and NUPENG observed that the Associated Gas Framework Agreement had been replaced by various incentives for gas projects and development in the bill.

They said, “Our preliminary analysis and consultation indicate that these replacement incentives are far less than the AGFA. The implication is that gas projects and development will be significantly impacted negatively. As a matter of fact, our analyses and consultations indicate that some 50 per cent of gas development projects will not fly under the new gas fiscal regime proposed in this bill.”

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