Nigeria has now become a Buhari that is very enigmatic when we discuss how and what Nigeria should be, and in which direction she should be headed. In all spheres of Nigeria’s bureaucracy today the mention of that name Buhari conjures the image of a spirit that is everywhereand watching everybody. People now go to work early;though some on their desks actually pretend to be busy doing nothing.
The common parlance in Nigeria today is that a new sheriff is in town. President Buhari says that leadership is a call to patriotism, and to him patriotism is the ability of a man to sacrifice all that is dear, dearer or dearest to him for the benefit of his country. Some have said that he is a true friend of Nigeria that should be held with both hands.
So as I thought about this piece on the Petroleum Industry Bill (PIB)which for years could not scale throughthe National Assembly for inexplicable reasons, I felt that invoking the name of mysteriousPresident Buhari could make that bill become an act. From a sincere heart I believe that since the President inspires hope,it is for me tosayon the PIB:Please Invite Buhari.
It is ironical that the National Assembly, (the privileged few who are the greatest beneficiaries of the milk cow called petroleum)does not want the bill passed.Whatever the issues that made them not to have passed the bill, should be resolved now with patriotic, nationalistic, energetic and unflagging enthusiasm of senators and members overriding their personal interests.
The PIB:‘’A Bill for an Act to Provide for the Establishment of a Legal, Fiscal and Regulatory Framework for the Petroleum Industry in Nigeria and Other Related Matters 2012’’. The bill proposed the establishment of a progressive fiscal framework that encourages further investment in the industry while optimizing revenues accruing to government.
From my experience and interactions in the past two decades in the petroleum sector and as a member of the Middle East Petroleum Club, I know that the Billwill open up the 6000 investment opportunities when we refine a barrel of crude. It has also proposed a Downstream Petroleum Regulatory Agency. It makes the Agency a body corporate with perpetual succession. It means the Agency can sue and be sued.A good legal and regulatory framework is the main guarantee investors want. It can be fine-tuned even with its imperfections.
In 1971, Nigeria was to join the Organisation of Petroleum Exporting Countries (OPEC). A requirement was that a country must have a 51 percent equity stake in the industry. The then military government of General Yakubu Gowon promulgated the indigenization decree to increase Nigerians participation in businesses dominated by foreigners.
With that law by fiat, the Nigerian National Oil Corporation (NNOC) was formed as the National Oil Company. The first Shell Refinery which is now Port Harcourt 1 wasnationalized without a buy out of the facility. That was an albatross around Nigeria’s neck and contributed to the cast down of international oil companies’ further investment in refineries.
Though the country built three more refineries in Warri (1978), Kaduna (1980) and the 2nd Port Harcourt (1989) and the Eleme Petrochemical Complex (1990) now privatized, we could not garner the managerial and technical competences for complex plants. We must now learn the rubrics and rudiments from our ‘masters’.
The Obasanjo administration on 30th July, 1979 nationalized Shell and BP downstream facilities. A letter from the then NNPC Managing Director, Festus Marinho increased Nigeria’s participation to 100 percent in Shell-BP and BP Nigeria.
These companies’ home government’s had links and supported the defunct apartheid regime in South Africa. Shell was changed to National and BP became AP. That move may have been expedient then but I believe it was politically exuberantin playing the Big Brotherbenevolentrole in Africa without a clear-cutcost- benefit analysis of what we wanted from our political beneficiaries.That put the death knell on IOCs downstream investments in Nigeria.
Our laws were decrees that could not be challenged and mostly crafted as ouster clauses. This reminds one of the last OPEC meeting of 5th June 2015 at its Vienna, Austria headquarters, where the alternate President, HE Dr. Mohammed Bin Saleh Al-Sada, Ministerof Energy and Industry of Qatarthanked Ecuadorian delegation that briefed on the ongoing arbitration in a matter brought against Ecuador by Chevron Corporation and Texaco Petroleum Company.
The Conference expressed its support to the Republic of Ecuador in the exercise of its sovereign rights over its natural resources, in accordance with international law, a right documented in the Algiers, Caracas and Riyadh Summit Declarations of OPEC Heads of State and Governments.
OPEC called for amicable negotiation and a good faith resolution for the dispute within a framework of utmost respect for the sovereignty of the Republic of Ecuador, and without resorting to ex parte pre- judgment measures that would make impartial solutions more difficult.
With inadequate legal and regulatory frameworks in Nigeria, corporate entities cannot enforce their rights. It became expedient for International Oil Companies (IOCs) to operate only in the upstream sector as it is today. If not how do we explain their heavy investment in the downstream sector in countries that are net oil importers, and worse still in non-oil producing consumer nations.
Exxon Mobil Corporation of the United States, the largest refiner in the world has no refinery in Nigeria. It owns the ExxonMobil Refining & Supply Company in Singapore with a refining capacity of 605,000 barrels per day capacity. That refinery is the 5th largest in the world and its refining capacity is higher than our four refineries combined capacity of 445,000 barrels per day.
Also, Shell the biggest player in Nigeria, owns the Shell Eastern Petroleum (Pte) Ltd Singapore with a refining capacity of 462,000 barrels per day. As a solution, we may tinker and reform our legal and regulatory frameworks to accommodate the partnerships we yearningly desire with IOCs in the construction of refineries. The way to go is the National Assembly Act.Please Invite Buhari.
VANGUARD
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