TheCable

The news, early this week, that President Muhammadu Buhari has refused to assent to the Petroleum Industry Governance Bill (PIGB) and has returned it to the Senate,struck me like a thunderbolt, not because it shattered my professional forecast that the bill will come into force before the end of this administration, but because it has set back the petroleum industry reform by at least 2 years.

Some industry watchers had ruled out the possibility of the president assenting to that bill based on his body language since the bill was sent to him few months back but I found myself always defending him on the ground that signing such bill requires thorough review and the president has not exactly been around in the last few months. At every occasion the discussion came up, I always argued – almost lonely – that the president will sign the bill. I think the fact that the provisions of the bill largely align with the position of Ibe Kachikwu, state minister of petroleum, on restructuring the industry influenced my optimism.

I had formed my optimistic outlook based on my reading of the situation, principally informed by: one, Minister Ibe Kachikwu that I expected to be the principal adviser to the president on the bill is aligned to the bill from past public speeches; two, the executive would want to use the passage of the bill as an easy political point ahead of the elections (“PIB came into fruition during my tenure”); and three, almost every expert agrees that the regulatory and institutional framework of the industry needed restructuring which is central to this bill. Therefore, there is a strong reason for me to believe the bill will be signed. That was the basis of my case. I have been proved wrong.

I honestly think whoever advised Buhari to reject that bill has done a great disservice to oil and gas industry in Nigeria.

The reports say that Buhari rejected the bill on the grounds that, one, it whittles down his power as petroleum minister and, two, he did not see any fiscal terms in the bill.

The second is too ridiculous to be believed (as even anyone with the slightest knowledge of developments on PIB knows that there is now a separate bill – Petroleum Industry Fiscal Bill – that takes care of the fiscal terms of the universal bill), so I will assume the press misquoted their source on that. It is too incredible that the advisers to the president will not know this.

On the first ground, while it is true that the PIGB reduces the powers of petroleum minister, that is actually one of the best things about it. The clamour for the reduction of powers of petroleum minister through the PIB predates Buhari. I don’t think the president will want us to keep having emperors and empresses like Dan Etete and Diezani Madueke as petroleum ministers. If Buhari chose to be petroleum minister, not all subsequent presidents will go that route, so why does a law that seeks to prevent petroleum ministers from becoming the alpha and omega of the industry become a problem? I fear the president is erroneously personalizing some things here.

Buhari is getting fatally wrong advice on this PIGB, which the current National Assembly has done a very good job of after 10 years of dilly dallying.

The unspoken force behind this rejection, I strongly suspect, is the entrenched interest of some folks in the institutions this bill dismantles and reorganizes in accordance with the best practices in other parts of the world (Saudi Arabia, UAE, Norway, China etc).

The bigger problem is that, with the current impasse between the executive and legislative arms of government, this bill will not see the light of the day in the next two years. Having come this far with the passage of the bill after a decade of lethargy, it is bad news that the bill is returned to the National Assembly. Even sadder is the fact that the three other associated bills – the Petroleum Industry Fiscal Bill, the Petroleum Host and Impacted Communities Bill and the Petroleum Industry Administration Bill –which have all reached advanced stage of passage, and very critical to oil and gas investments in Nigeria, especially the fiscal bill, will also be dealt huge blow. I think this is sad news for the petroleum industry not just in Nigeria, but globally.

There is no perfect law in the world. I strongly believe the current version of the PIGB is good enough to achieve a better management of the petroleum industry in Nigeria. It would be good if the president has a rethink on this matter.

Oyewale, a chartered accountant and public policy analyst, has over a decade experience in the Nigerian oil and gas industry