Government and Economy

PIB goes Public in six weeks, says Ministerial Committee

Friday, May 4, 2012

Osten Olorunsola, chairman Technical Committee and director Department of Petroleum Resources (DPR) has hinted that the draft of the Petroleum Industry Bill, prepared by the Udo Udoma Task Force, will be presented to President Godluck Jonathan in a matter of weeks.

Olorunsola told BusinessDay in Houston, USA that :“We now have a draft of the bill and we hope to submit it to the Federal Executive Council (FEC) in a matter of weeks. Hopefully Mr. President will forward it to the National Assembly around June.”

He further said one of the proposals in the draft was the availability of small licences and that this would improve the fortunes of marginal players in the industry significantly.

“Multiple and long licences are not going to be possible anymore. By this, I mean companies would longer hold on to licenses for long years before expiration. The license would have reasonable tenure but not as long as some of those we have now. There is a whole chapter in the Bill that talks about enhancing local participation, especially from the fiscal perspective,” he added.

The DPR director who spoke on the sidelines during the Offshore Technology Conference going on Houston, Texas, USA, observed that what had happened in the past, was the emergence of more than ten versions of the PIB floating around.

He said what had been done in the past few months, was to converge all the versions so that there was no big disparity any longer. “We should not forget that the stakeholders in the PIB are so large, but we anchored everything we did on five key principles.

“The five key principles are openness, transparency, competitiveness, increasing indigenous participation and increasing revenues to government. These were the abiding principles that guided every legal and regulatory provision that we have made into the drafting of the bill,” Olorunsola explained.

The International Oil Companies (IOCs) fears, he said, had been captured in the fairness principle of the bill.

Indeed, the IOCs have been calling for more in terms of the fiscal regimes. “We have looked at that and there were opportunities to do that and that is what was done in the collective interest of all,”Olorunsola said.

He added that the current bill would not necessarily favour the IOCs, but would bring fairness to all the stakeholders because one of the objectives of the bill itself was to encourage investment.

“It is therefore necessary for us to balance the equation, so that we don’t create another set of problems while trying to solve some”Commenting on the provisions made to accommodate the divergent interests of host communities, Olorunsola declined making specific pronouncement. He said: “I don’t want to comment on some of the provisions because it is still in draft stage but it should become a public document in about four to six weeks.”

On the planned bid round for marginal oil fields, he said “We should be getting an approval from Mr President in the next few weeks to start the process. That approval includes the number of fields, the guidelines and the timelines. So, until that approval is given by the President, I cannot comment on the details of the rounds at this point in time.

He said in 2003, 24 fields were awarded to 31 companies but that currently there were actually logged, 29 marginal fields in DPR’s books, from which 24 were competitively tendered for and awarded and five were discretionally awarded over time.

In terms of performance, he said only eight fields were producing, with a total of less than 60,000 barrels of crude oil per day and that there was still a long way to go.

“Henceforth, I can say that nobody is going to get any marginal field that is no longer bankable . It is not as if there are no small fields but what we are doing now is to close contiguous little problems, so that at least, we have something like about 10 million barrels as a marginal field recoverable during the bid run” he said.

SOURCE: www.businessdayonline.com/NG

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