We Must Privatise Refineries To End Fuel Scarcity – Reyenieju | Independent Newspapers Limited
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We Must Privatise Refineries To End Fuel Scarcity – Reyenieju

Daniel ReyeniejuPost
Posted: Mar 30, 2016 at 3:00 am   /   by   /   comments (0)

Hon. Daniel Reyenieju is a member representing Warri Federal Constituency
in the 8th House of Representatives. In this interview with AHMED MUSA, he
X-rays  factors responsible for the non-passage of the Petroleum Industry
Bill (PIB), its importance to the governance of the oil sector, the
unending fuel scarcity in the country and what should be done to curb the
ugly trend as well as other issues.

As a member of the Ah-hoc Committee on PIB in the 6th Assembly, the only returning member who still retained his membership of the Committee in the 7th Assembly as well as member, House Committee on Gas Resources, what is your perspective to the perennial non-passage of the PIB after 12 years of legislative attempts?

Thank you. I really feel very sad and also disappointed, but that will
not make me give up on my agitation for the quick passage of the PIB. The
PIB was not structured or brought in to favour any section of the country. It has to do with good governance of the oil sector and the development of this country.  I was in the 6th Assembly when the PIB was introduced under the
chairmanship of Hon. Tam Dieffy Bricks from Bayelsa who was chairman,
Petroleum Upstream , and he was removed as chairman and Bassey
Ottu was brought in as chairman and the PIB was transferred to Ottu. We did
all we could, and the last minutes of the 6th Assembly, we were about
considering it clause by clause and we lost, because we couldn’t push it
through and the Assembly wound up.

And in the 7th Assembly, it came up again. It had to be started de novo,
completely afresh. And I was lucky to have been returned. So I became the
only surviving member of Petroleum Upstream committee that now conscripted into the Special Ad-hoc committee on PIB and we started it all over again.
And I must tell you, it was a battle when the committee was put in place and
headed by the then Majority Whip of the House, Hon. Isiaka Bawa from
Taraba.  We did an excellent job, concluded everything,. It was a battle, argument for argument. Constructive engagement and we got the PIB completely done. And incidentally again, it came to a point where it was considered at the committee of the whole. Most Nigerians don’t even know that we actually passed the PIB on the last day of the last Assembly.

On the last day of the Assembly, we hit the gavel on it. Whether you like
it or not, it passed through. So ordinarily, what I expected the parliament
to have done is to bring the PIB again, and go under order 12, on bills
from preceding Assembly and then it goes to the committee of the whole for

And that I have done in collaboration with some few members and it has been
put there. But I got some information from the government, I mean the
executive that they are trying to unbundle the PIB itself. What that means I do not know. And the point is this, we have come a long way with the PIB, this is the twelfth year of the PIB in the parliament and almost about 16 years of the PIB in and public discourse, and I’m yet to find out which of the renown consultants in the nation’s petroleum industry that has not made one or two
contributions to the PIB in the past.

So I’m still waiting to see what they are still consulting about and how
they hope to come up with a different language. Except if the PIB will be
re-crafted in another language which is different from the English language
that we used. I want to see such difference from the consultants. Anything
that is going to be drastically different from what we had in the past 12
years. So what I’m saying in essence is that in as much as we are waiting
to see a striking difference from the consultants from the ministry and
whatever,  I want them to be quick about it so that we can see what
they have to put on the table and if it comes out the best, why not?

But when will the bill ever pass if we have to wait. Because this is almost
one year gone in the administration. And by next year we will be
politically jostling again. And the moment you go into political jostling
in Nigeria you lose some good time of parliamentary work. So what I’m saying in essence is that the PIB, we need it in
whatever form, whether it is going to be unbundled, we are waiting for it.
Whether it’s not going to be necessary anymore, some of us want to know.

What factors do you think are responsible for the intrigues characterising the passage of the PIB?

We are talking about the sector that survives the nation. That attracts heavy foreign direct investment. When I say heavy, it’s really heavy foreign investment to survive the oil industry. Don’t forget that apart from structuring the petroleum industry to suite Nigerians, there is the economics of it.
Sometimes we call it the commercials, how we release leases, the OMLS, the
rental value of it, and all of that. So that cannot really go freely
without some intervening forces whether negatively or positively, whichever way you want to look at it. So I think that’s where we have our
challenge, but then that’s not an issue. It shouldn’t be an issue. What
parliament needed to have done was take bull by the horn and pass it the
way it’s being done and return same to the President for accent. And then
expect at some point, what we call amendments where necessary. And I tell
you, the Local Content Bill was passed in 2010, I was a member, and one of
the sponsors of the bill in 2010 when it went through. But in 2015, there
was an amendment to it.
There is no law anywhere in the world that’s absolutely perfect. What you do is the in the course of implementing it, you find out those areas you feel have some ups and downs, and what do you do, you forward such for amendments. Virtually all our laws right now are being amended, that’s the way it should be. So you cannot talk about amending a law that has not been passed. What you do is to allow the old PIB to go through, and wait for consideration of clauses after which it can be passed for accent, then you wait for about three months or less and introduce your amendments where necessary?
How can we be waiting for a new PIB when we already have a PIB that
had witnessed all the storms for the past 12 years?  So you think what is
going to be brought now will not equally face those challenges that this
one faced? In that old PIB, there issues of unbundling: the office of the
GMD, the office of the minister, you have the gas resources, the frontier,
10 per cent host community funding, you have upstream, downstream, you have the inspectorate, and all of that. And we used the parameters from other countries where oil and gas are found, and where they have made substantial progress with their oil resources. We have the commercials, we came out with
everything, the pipelines were also broken down in such a way people can
invest in them. So I do not know what difference they are going to make with
this time that we are wasting.
I don’t want to sound as indicting the Senate, but I can see that the
House has been more committed to the passage of this bill, because in the last Assembly, while the House was able to weather the storms arising from various disagreements, the Senate at a point dropped the PIB and they couldn’t go the whole hug. Now, after the House passed the bill, they couldn’t concur too. The question is that now that you are also preparing for the next stage of reviving the bill, is there any connection between the House and the Senate to ensure that both Houses work together to one, pass the bill on time and secondly, the concurrence is also done so that it can be signed into law, more so that the Speaker has vowed that the House would no longer wait for the executive?

Yes! You seen I’m not going to speak too concretely on the Senate. But
I know that we do not have to depend on the Senate to do what we think is
right for Nigeria. And the Senate also does not have to completely depend
on the House to do what’s right. At the end of the day, if you do what’s
right as an arm of the National Assembly which is the House, what you need
to do is to seek the gavel of the Senate for concurrence. And if the Senate
takes it up, what it needs to do is to seek the gavel of the House also for
concurrence. Either way, you should allow the law to go. So, I would want
to appeal or advise the parliament that we shouldn’t go back to the days where we had mutual distrust as we can reintroduce the
bill as passed by the 7th House and take things from there. And that’s we
have tried to do in the House, where I brought in the Minority Leader, the
Majority Leader and all other stakeholders who supported the
reintroduction and made sure that it went through the first reading. I
don’t want to see it as an unwholesome thing, it’s a thing that is in the
interest of the entire country.

So what I did was to carry both the Majority and the Minority Leaders along
and some other very prominent members of the House from the last Assembly
and some very new ones who are also in tune with the PIB. So that’s what we
have. We were about twenty-something and I was the lead sponsor of it.

So what I’m trying to say, coming back to your question, we do not have to
actually be on the same page all at the same time, both the Senate and the
House. So whichever comes first will seek the concurrence of the other.

The Senate in the 7th Assembly rejected the PIB. And when asked in an
interview, former Senator Smart Adeyemi said the Senate gave conditions upon which it would support the bill, one of which was that: government
must explore oil in the Northern part of the country. And that a certain
commission must be set up and the amount of money to be spent in exploring
oil must not be something that Nigerians would bear the burden.  And I ask,
don’t you think that PIB will still encounter the same problem it ran into
in the Senate most especially Senators f the northern part of the country?

Yes. That was one of the biggest challenges we had in the 6th Assembly
and its also rearing it’s head again in the 7th Assembly. Like I always
say, it’s nothing personal, it’s not regional neither is it religious. It’s
about a law for the good governance of the good people of Nigeria.

That issue was adequately addressed in the PIB that we passed and that is
why you have frontier agency. It was created as something that we needed to
do to ensure that nobody felt cheated. You can’t run away from it. How are
even sure that there’s no oil in the North. I took a trip to desert of
Niger Republic and I’ve been to their oil farms, you can’t even
differentiate where Nigerien territory ends and where that of Sokoto
begins. So you don’t even know where is Sokoto and where is Niger. It’s
virtually the same terrain and topography.

It’s just that maybe we’ve not done enough. We’ve not been too committed to
actually exploring it. That is why when the northerners came up with the
argument that yes, we need a frontier, we said no problem, why not? If it
happens that the agency goes to and finds oil, good and fine for all of
us, and everybody would know that we have done what was necessary for that
to happen, and if they did not, then we know that we have tried and it
didn’t work. So there is nothing wrong in creating a frontier that works to
explore oil some other places in the country, but that may not be to much
in the interest of the unity of this country.

Because when create a specific frontier to explore oil in the North when
you claim to have one Nigeria, it would have been the same process but if
that was going to stall the passage of a good bill, then it’s a small
compromise because you can’t throw away the baby with the bath water, just
allow it to go, there’s nothing wrong with that. The money belongs to the
entire country. So those Senators who were arguing that without the
frontier the bill cannot sail through, they should have gone into it to see
if it was created or not. And that brings us to the issue of commitment.
When we passed it, I thought they should have gone through it and see
whether their concerns were addressed or not.

And also when we got the issue of host community funding, which is about
10 per cent, it was another argument. And everybody thought that – that was
going to tear us apart and that we were not going to make any progress with
it, because the argument came up that the entire country is host to oil and
as such the host community 10 per cent should be distributed to the entire
country. And we said again that if that was going to stall the passage of
the entire bill, let’s allow it to go and make the entire country a host
community to oil. But ideally that shouldn’t be so. Although, the
parliament agreed and as a member it means I also agreed, but my
argument represented a minority view at the time, because of the immediate effects of the production of oil. How to curb the
negative and immediate effects of the production, that is why we are
calling for some certain ameliorative measures which are going to get funding from the income of oil companies after tax. It wasn’t as if the
federal was going to pay the 10 per cent, no. So what I suffer as somebody
from the Niger Delta, , with due respect to my people
from other parts of the country, they don’t suffer it.

I give you an instance, drive into Warri, and look at the corrugated iron
roofing sheets, you will see them all covered in black. All the
multi-coloured roofs have become black. But in Abuja, your blue roof remains
blue, you red roof remains red and so are the white or brown ones. And what
is the cause the changing colour in the Niger Delta? Carbon. Hydro-carbon
flare. What about the environmental degradation from oil spill as a result
of equipment failure which has destroyed the aquatic life and the
ecosystem of the entire region? It doesn’t happen in the North. It doesn’t
happen in the Southwest, maybe some parts of the Southeast, yes; because
some of the states have oil. But when you say we must have everything across
board, I would say no problem; we are all of one country.

If the North becomes one of the best developed places as a small London in
Nigeria today, nobody stops me from going to live there. We all can live
anywhere we want provided we can acquire land and build or rent
apartments. So that shouldn’t have been an issue, but it became an issue
and which was resolved amicably. So the bill was good to go. The frontier
which the North wanted specifically for the North and I see nothing wrong
with that and the Niger Deltans or the South which is where oil is being
currently explored wanted something of ameliorative measure in the form of
10 percent host community fund.

Do you subscribe to the argument that the oil majors, not wanting to
have their income diminished by contributing 10 per cent to the cost
community fund and the establishment of a frontier away from what they are accustomed to may  have reached out to your colleagues at the Senate to be able to stall the process there?

I may not completely subscribe to that argument because I do not know
to what extent they wanted the bill with what kind of provisions or not
wanting it passed at all. But what I would say is that parliament is
parliament, and the parliament is expected to the right thing in the
interest of those who elected them. We owe it as a responsibility this nation to always do what we know is right. Lobbying is allowed, but the ability to know what’s right is also very important to a parliamentarian. So the Senate should at this point know that we need a law to govern the oil sector in this country.
Because, we cannot continue to be implementing obsolete laws from the 50s.
Some of the acts governing the petroleum industry in the country are as old
as 45 years, and untampered with.and that is why you see companies flare
gas and get away with it, because it’s cheaper to flare and pay the fine
than to re-inject it for domestic power production. But if there had been a
constant review of it, where the fines are reviewed, all of these would
have been a thing of the past. Because gas is the only way to go.

Because if you bring up gas oriented factory or a petro-chemical factory,
it employs a lot. You can derive a cluster component of producing that
presents different job opportunities for many people.

Using that PIB, what should be the fate of the nation’s refinery in
the face of perennial fuel scarcity and overbearing influence of the oil
worker union?

Let me give you an example. I will give a practical example of the
situation we face in this country and maybe it would cover it. The NNPC in
Warri some time shut down production activities completely for more than a
year, and there was no work going on there. It may not have been the fault
of the union, but what happened, the government continued to pay the
workers for the fear of having the unions breath down its neck. They got
everything they needed to get.

Take Ajaokuta and Delta Steel for example, workers are still there
collecting monthly salaries and there’s no production going on there, they
are not generating a single naira for the country, but the government is
still paying them, because there’s a union. Can you do that in MTN; can you
do that in Glo? They cannot. But there are unions, but because the private
sector is more result oriented and organised, you must earn according to
your input.

So if you now say for every time the facility is shut down and left
unproductive for years even a decade, who bears the burden? – government.
I’m not saying that people who were made redundant for no fault of theirs
should lose out or bear the consequences of government inefficiency, but
billions of tax payers’ money are being spent on a monthly basis to pay
workers in Ajaokuta and Delta Steel Rolling companies.