Nigeria’s crude oil earning increased from the N253.02billion in June, to N362.43billion in July, according to the National Bureau of Statistics (NBS). This comes as stakeholders in the oil and gas industry have underscored the drawbacks of the Petroleum Industry Governance Bill (PIGB), saying that the bill failed to address some critical issues in the oil sector.
The fiscal statistics on government revenue and expenditure for July 2017, released on Wednesday, reflected that crude oil sales accounted for the larger chunk of the oil revenue, as N188.15billion was generated from crude oil sales, while gas sales generated N29.69billion.
The agency said the least oil revenue came from rent, and gas flared penalty with N0.044billion and N0.184 billion respectively.The report said non-oil revenue came from Excise and Fees, import duty, and other Customs and Companies Income Tax, and Other Taxes with N54billion, and N284.85billion generated respectively as gross non-oil revenue amounted to N338.85billion.
NBS put the gross revenue for the month at N701.85billion, while Net Federation Account Revenue after All Deductions Distributable was N521.82billion.
Petroleum stakeholders, including the Managing Director, Yinka Folawiyo Petroleum Company Limited, Tunde Folawiyo; CEO, Wema Bank Plc, Segun Oloketuyi; legal luminary and Lead Partner, Legal Advisory Partnership, Anthony Idigbe; and President, Business School, Netherlands, Lere Baale, believe the bill offered opportunities for prosperity to all participants in the industry.
Speaking at a Breakfast Lecture entitled, “Petroleum Industry Bill: Challenges and Opportunities,” organised by the Island Club, Onikan, Folawiyo, said: “When the BPE holds 49 per cent of an asset, we all know what that means. It means we are preparing for another public ownership. BPE is not set up to own assets; it was set up to privatise public assets.”
According to Folawiyo, there is “nothing in the proposal that provided for reducing gas flaring, which is one of the major challenges the country is facing. It will not also be subject to procurement Act. This appears counterproductive. Accountability and transparency will suffer for this.
“No provision about ownership of pipelines, depots, and other assets of government. Nothing is also mentioned in terms of pricing mechanism for downstream sub-sector.”He however added that opportunities abound in the bill, which is a great start for Nigeria’s oil sector.
Olaketuyi, represented by Head, Energy Desk of Wema Bank, Segun Oderinde, said: “PIB is to ensure that producers must key their supply obligations on gas. This is an opportunity because over 28 per cent of the Banking sector loans portfolio was devoted to the oil and gas sector,” he said.
Baale on his part urged Nigerians to “not only be excited by the level of progress being made on the bill, but also look for opportunities that the bill comes up with.”The Island Club Chairman, Banji Oladapo, disclosed that members were already working round-the-clock to take full advantage of the opportunities inherent in the PIGB.
Idigbe, who delivered the theme of the lecture, said the PIGB has obvious drawbacks, saying: “Presently, only the first fragment of the PIB has been passed by the Senate, i.e. the PIGB. It must be observed that the PIGB only deals with the one aspect of the PIB, which is the governance and institutional framework of the Nigerian Petroleum industry. As such, it would not deliver the full benefits of the intended reforms except if the other aspects of the PIB such as the Petroleum Host Community Fund, and Petroleum Fiscal Regime, were also passed into law.
“For instance, we know that one of the major challenges facing the Nigerian petroleum industry is host community and Niger Delta issues. Until the recent peace diplomacy to the oil region by the Acting President, Yemi Osinbajo, the militant attacks in the Niger Delta led to significant amounts of shut-in production at onshore and shallow offshore fields and frequent declaration of force majeure by oil and gas companies in Nigeria,” he said.
These he continued led to drastic decline in revenue projections, and crude oil barrels in 2016, thereby worsening Nigeria’s economic crisis and pushing the country deeper into recession, exchange rate crisis, and stagflation. “Therefore, it is important that any legislation to address the challenges in the Nigerian oil and gas industry must make provisions on how to effectively address the Petroleum Host Community issues,” he said.