Enabling an Appropriate Legal and Regulatory Framework For The Petroleum Industry The Petroleum Industry Bill
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1 Enabling an Appropriate Legal and Regulatory Framework For The Petroleum Industry The Petroleum Industry Bill PROFESSOR YINKA OMOROGBE NIGERIAN INSTITUTE OF ADVANCED LEGAL STUDIES, ABUJA, NIGERIA, 24 TH AUGUST 2015, 2015 NBA CONFERENCE, ABUJA, NIGERIA
2 FUNDAMENTAL PREMISES There is no alternative to reform- no shortcuts, and no palliatives will propel Nigeria into where it should be. Reform has got to include legal reform. It can not be only administrative or policy reform. Legal reform must be done correctly, in alignment with Nigeria s stated policy objectives. ú What are they? ú What does Nigeria want to achieve? ú What policy/ commercial/ regulatory structures do we want?
3 Why the Legal Component of Reform is Essential When the law is static, particularly in a dynamic, high- technology and capital- intensive industry, it cannot fulfill its objective of providing the needed framework The operating environment is bound to have fundamental distortions, giving rise to the poor governance that presently characterises the industry. PROF. YINKA OMOROGBE 3
4 What is presently covered by Nigerian Law? The upstream imperfectly The environment- poorly The downstream- negligibly Downstream and upstream gas- negligibly NNPC outdated law THE RESULT IS THE EMERGENCE OF THE NNPC AS WE KNOW IT TODAY PROF. YINKA OMOROGBE 4
5 The Petroleum Industry Bill (PIB) Therefore, there is no alternative to legal reform. The PIB- or whatever the reform law or laws may be called- in the form that advances the aims and objectives of government, and aids development - is critically important. PROF. YINKA OMOROGBE 5
6 THE PIB JOURNEY: R E A L I T Y COMPLETED PIB SUBMITTED TO NASS BY PRESIDENT AND GAZETTED I L L U S I O N VARIOUS DRAFTS DONE UNDER AUSPICES OF NNPC HOUSE AND SENATE PIBs AFTER THIRD READINGS NO PASSAGE NO PIB PROF. YINKA OMOROGBE 6
7 THE PIB: R E A L I T Y DRAFTING RECOMMENCESS UNDER THE AUSPICES OF THE MINISTER. NNPC I L L U S I O N PETROLEUM INDUSTRY BILL 2012 SUBMITTED TO NASS FIRST AND SECOND READINGS.AD RAFT WITH AMENDMENT S SUBMITTED TO THE HOUSE OF REPS. NO THIRD READING NO PIB??? WHY??? PROF. YINKA OMOROGBE 7
8 Our Desire: A Functional Nigerian Petroleum Industry by 2019 POLICY NIGERIAN NATIONAL POLICY/DEVELOPMENT GOALS FLOWING FROM THE APC MANIFESTO, INCLUDING OIL AND GAS POLICY OBJECTIVES LAW THE PETROLEUM INDUSTRY ACT, AND OTHER LAWS REGULATING THE PETROLEUM INDUSTRY Administration/Enforcement/Implementation BY INSTITUTIONS ESTABLISHED ACCORDING TO THE LAW IN LINE WITH PRINCIPLES OF GOOD GOVERNANCE, AND IN CONFORMITY WITH GOVERNMENT POLICY THE ENVIRONMENT TRANSPARENT, NO MORE SUBSIDIES/ IMPORTED FUEL, FUNCTIONING REFINERIES, VIRILE GAS INDUSTRY FULLY SUPPORTIVE OF THE POWER SECTOR NNPC commercial Institution, stripped of all policy and regulatory functions PROF. YINKA OMOROGBE 8
9 IN CONCLUSION There Are three scenarios of possible outcomes for Nigeria s petroleum industry: ú 1. No petroleum industry reform, and with the status quo remaining the same ú 2. Factors worsening- increased theft, greater opacity, lack of transparency and due process ú 3. Meaningful and real petroleum industry reform. IT APPEARS THAT SCENARIO 3 IS UNFOLDING IN NIGERIA.
10 The Three Scenarios : C- Improvement Ø The Petroleum Industry Act comes into being in line with the Oil and Gas Policy, which stipulates clearly defined policy, commercial and regulatory roles for the institutions of the industry. It is also faithfully implemented within eighteen months of its passage, and the various heads of the institutions of the industry are chosen based on competence and professionalism. Ø NNPC emerges as a fully commercialized and functional NOC, and commences exploratory operations in other countries in the sub-region. 10
11 Scenario 3 Ø The downstream pipeline networks operate under an open access regime, and refineries are not only completely functional and operating at capacity, but there are several refinery projects in the pipeline, with the hope that in ten years, Nigeria will be not only self-sufficient, but the major supplier of products for the West African sub-region. Ø The industry runs in accordance with principles of good governance and due process, and those who have illegally enriched themselves are made to fully refund all amounts proven to have been taken 8/31/15 11
12 CONCLUSION WE HAVE SEEN THE START OF REFORM. WE PRAY THAT WE WILL SEE THE EMERGENCE OF A PETROLEUM INDUSTRY THAT TRULY MEETS THE NEEDS OF NIGERIANS. THIS IS ONLY POSSIBLE IF THERE IS LEGAL REFORM, WITH THE EMERGENCE OF A NEW LEGAL FRAMEWORK THAT ALIGNS WITH NATIONAL OBJECTIVES.
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