As part of effort to hasten the reforms in the petroleum industry, the Federal Government has revealed its plan to split the Petroleum Industry Bill (PIB) and resubmit it to the National Assembly in the first quarter of 2016. The PIB has been stuck in parliament for over seven years. The bill was first submitted to the National Assembly in 2008.
Vice President Yemi Osinbajo disclosed this at the Aso Presidential Villa in Abuja.
He noted that the delay in the passage of the bill has hindered investment in the country’s crude production.
According to him, breaking up the Petroleum Industry Bill (PIB) into smaller laws focused on fiscal and regulatory measures in Nigeria’s energy industry would make it easier to pass through the National Assembly.
Affirming the government’s stand on the issue, he said, “Separating the PIB, breaking it up, obviously is the way I would think that we’ll proceed; that is really what the market has been waiting for.”
The Vice President noted that the proposed law has been held up largely by political wrangling and objections by International Oil Companies (IOCs), which say the government is demanding too much increase in its share of revenue.
The delay in the passage of the bill has caused uncertainty and the loss of over $15 billion investments annually, according to Dr. Emmanuel Kachikwu, the Group Managing Director, Nigerian National Petroleum Corporation (NNPC).
Speaking on the government’s stand on the nation’s refineries, the Vice President refuted insinuations in some quarters that the government intends to sell the refineries. He stated that the government is rather interested in encouraging the setting up of private refineries to support them.
Osinbajo also disclosed that subsidiaries of the NNPC will be unbundled to make them more efficient, while the Corporation will become a more regulatory body as the private sector takes most of the downstream operations.
According to him, the government is not however considering selling its stakes in ventures with oil companies. He stated the government has resolved the cash-call problem that has been a hindrance to the joint venture relationship with IOCs.
“We think that we are able to resolve some of the cash-call difficulties that we have experienced. The partners may be allowed to borrow even on behalf of the Federal Government and will be able to introduce their own capital,” he stated.
He explained that the recent approval of over 30 licenses for the building of modular refineries was aimed at increasing private sector participation in the refining of crude locally. He, however, assured those granted licenses of government’s intension to allow them build new state-owned refineries so they can benefit from the available infrastructures.
On how this will affect the economy, he said, “In the medium term we will be able to get cheaper pump-price oil because we will be importing far less refined petroleum.”