The Director, Society of Petroleum Engineers, Africa Region, Professor Omowumi Iledare, has identified governance, regulatory institution and discretionary award of oil blocks as factors that may hamper the smooth operation of the Petroleum Industry Bill when signed into law.
Iledare, while speaking in Abuja at the Nigeria International Petroleum Summit, noted that the PIB was not perfect, but good enough for the country.
His words, “The PIB is not perfect, but good enough for a start after 20 years of attempting.”
According to IIedare, the bill, when passed, is going to separate policy framework from regulation and commercial.
“Now, the bone of contention is still there. It is the reason the PIB was not signed originally. Some people wanted two regulatory institutions, but some of us think that one regulatory agency is enough for what we have in Nigeria.
“I don’t think the technical know-how is there for continuity. So, the Ministry of Petroleum Resources must be re-organised to ensure the separation of technical from administration,” he said.
When it comes to the administration of leases, the idea is to move away from discretionary award, he added.
“I have not seen the final bill. But do not give room for discretionary award of oil blocks because it does not give room for fair market value for scarce resources like petroleum.
“If you got to fiscal framework, which is the other chapter, I am particularly not happy that you are negotiating for another 20 years when you are about to reform the industry. I think it is important to make sure that the fiscal regime must be attractive, sustainable, flexible and can adjust itself and finally, funding the host community project.”
Admitting to not have seen the final bill, the don argued, “It is not likely that the Organisation of Petroleum Exporting Countries will be able to make this type of projects that are needed.
“Neither do I support equity, what I will really prefer is surrendering of a portion of the royalty to where the oil comes from, and that will solve the apprehension as if they are not the owner.
“But I will not sacrifice a good bill on the platform of a perfect bill, which does not exist.”
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