Kenny Folarin, Abuja
The Director, Society of Petroleum Engineers, Africa Region Prof. Omowumi Iledare has identified governance, regulatory institution and discretionary award of oil blocks as factor that may hamper the smooth operation of the Petroleum Industry Bill (PIB) when passed.
Iledare while speaking in Abuja at the Nigeria International Petroleum Summit noted that the PIB is not perfect enough for passage.
“Let me say that I would rather have a good Bill than not have a bill at all.
“The PIB is not perfect but is good enough for us to start after 20 years of attempting”.
According to IIedare, that bill when passed is going to separate policy framework from regulation and commercial.
“Now the only bone of contention that is still there is the reason why the PIB was not signed originally which is that there are some who wanted two regulatory institutions and there are some of us who think that one regulatory agency is enough for what we have in Nigeria.
“The only caveat is the ministry of energy, I don’t think as far as am concerned, the technical capability is there to allow for continuity, so the ministry of petroleum resources must be re-organized to make sure that they separate technical from administration.”
Also, Iledare, noted that when it come to the administration of leases, the idea is to move away from discretionary award,
“I have not seen the final bill and that must be avoided, do not give room for discretionary award of oil block because it does not give room for fair market value for scarce resources like petroleum”.
Furthermore, Iledare, stated that “if you got to fiscal framework which is the other chapter, am particularly not happy that you are doing a reformation of the industry and you are negotiating agreements for another 20 years when you are about to reform the industry”.
“I think it is an important thing to make sure that the fiscal regime must be attractive, sustainable, flexible and can self adjust itself and finally, funding the host community project”.
He added that “I have not seen the final bill to see whether it is pep to expenditure, it is not likely that the OPEC 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 come from and that will solve the apprehension as if they are not the owner, that’s just my point.
“But my conclusion is still this, I will not sacrifice a good bill on the platform of a perfect bill which does not exist”. He concluded.