The Acting Director- General of the Bureau of Public Enterprises (BPE), Dr. Vincent Onome Akpotaire has canvassed for the separation of the roles of the regulator from the operator and policy formulation in the Nigerian National Petroleum Corporation (NNPC) as it is the practice now with the Corporation.
Dr. Akpotaire regretted that “the challenges we are facing today were envisaged by the BPE over ten years ago hence the articulation of the Petroleum Sector Reform and the first ever drafted Petroleum Industry Bill, noting that after over a decade, we are still talking about the problems rather than the solution.” He said the reform was meant to enthrone international best practices in the sector.
In a paper titled: The Petroleum Industry Reform in Nigeria: Reinventing the Wheel by Innovation which he presented at the National Stakeholder’ Workshop on the Petroleum Industry Reform in Abuja, Akpotaire noted that the Directorate of Petroleum Resources (DPR) which ought to be a regulator is an arm of the NNPC in the present arrangement.
According to him, the “NNPC currently acts as the policy maker, the regulator as well as an operator of the policies which go against international best practices”, adding that it was because of the need to reform the sector that the National Council on Privatisation (NCP) in 2009 through the Federal Executive Council (FEC) transmitted to the National Assembly the Petroleum Industry Bill (PIB).
He said the 2009 version of the PIB seeks among others; to promote transparency and openness in the administration of the petroleum sector in Nigeria, separate the commercial institutions in the sector from the regulatory and policy making institutions deregulate petroleum product prices, increase domestic supply and put in place a fiscal framework for increased revenue.
The Acting DG regretted that the first attempt to pass the PIB was stalled by the Ministry of Petroleum Resources after it had passed through the first and second reading and subsequently tabled for public hearing as the Ministry at that point made additional legal and regulatory provisions for a third regulator-the mid-stream petroleum sector regulator as well as other ancillary provisions that were claimed to have been omitted in the FEC’s approved draft Bill.
This consequently led to the redrafting of other versions the PIB which he noted, conflict with the NCP’s reform mandate and the globally accepted framework in the sector. In the 2012 version for instance, he highlighted some of the differences as:
· The part 1 of the 2012 PIB is ambiguous as it does not expressly state who will drive the sector (i.e. public or private sector). This could affect private sector confidence, especially with the powers the Bill seeks to confer on the Minister as well as the huge New National Oil Company;
· In part 11 of the Bill relating to the role of the Minister particularly sections 6(g), 6(h) and section 8(6) in which the minister is the final authority on purely regulatory matters. This could be overbearing, discretionary and could lead to conflict of interests/executive abuse;
· Section 152 (10) seeks delisting of the NNPC enterprises listed under the Public Enterprises Privatisation and Commercialisation Act and the vacation of the power of Attorney earlier granted the BPE. It amounts to back-door amendment of the Public Enterprises (Privatisation and Commercialisation) Act 1999 and invariably halting the Federal Government’s divesture of its shareholding in the refineries, Nigeria gas Company (NGC) and Petroleum Products Marketing Company (PPMC); and
· The power of appointment, discipline and removal of the heads of the proposed regulatory agencies resides with one arm of the Government whereas it ought to be that the functions be subjected to an approval process by another arm of Government as it is obtainable in the Electricity Power Sector Reform (EPSR) Act 2005 and the National Communications Commission (NCC) Act.
Similarly he said that the 2015 version of the PIB which is privately sponsored is outlined in only two parts, not properly structured into parts, creates an Asset Management Company, creates a Frontier Exploration Services, does not state who carries out the implementation of the reforms in the Oil and Gas Sector; and also does not state who manages the funds on behalf of the Petroleum Host Communities Fund (PHCF).
Akpotaire recommended that since the 2009 PIB approved by FEC had no controversial provisions, having had the benefit of review by stakeholders, it should be represented with necessary adjustments to reflect the current realities in the sector to the National Assembly for enactment.