Stakeholders hail government opting for non-discretionary, open bid round in PIB

…say previous reforms failed because ministers sabotage them

Stakeholders in oil and gas industry have lauded efforts of the Federal Government opting for non-discretionary, open bid round awards of oil blocs in the proposed Petroleum Industry Bill (PIB).

They say previous reforms planned for the oil and gas industry by successive governments failed because the ministers in charge of the industry decided to ignore them as soon as they discovered their powers had been whittled down in the reforms.

This is the major reason the PIB has suffered the kind of setback it has gone through in the last 20 years, some of them say.

According to them, from the time of General Ibrahim Babangida up to the administration of Goodluck Jonathan all the ministers that presided over the oil and gas industry had either tactically shelve or refused to pursue the reform agenda for the industry as soon as they discovered their power would be reduced.

They therefore commend the efforts of the current government for including the item in the proposed law, which if passed would enhance transparency and increase government revenue.

Discretionary allocation of oil blocs was very prevalent during the military regimes of General Ibrahim Babangida and late General Sani Abacha, therefore denying the nation the revenues that should have come to it through a competitive bidding round in form of signature bonuses.

If the National Assembly decides to pass the bill into law with the item intact, it means the power of the minister of petroleum resources would have been reduced by half over such exercise, as a Commission to be set up would now have the responsibility to carry out such duty.

Seye Fadahunsi, a former executive director of Pillar Oil, says it is a wonderful development if the government can keep to the terms of the rules it has laid down for itself.

“This would bring probity to the process. But would it be able to implement and not succumb to pressure when politicians decide the act? It is a wonderful development but would it stand by it,” Fadahunsi asks

Austin Avuru, immediate past managing director/chief executive of Seplat Petroleum Development Company, says inserting non-discretionary and open bid rounds award in the proposed law would ensure that things are streamlined with high level of transparency, which is good for the industry and the country.

“A non-discretionary and open bid rounds would also raise government revenue. Since it is in the law, if the government fails to do the necessary things it could be sued,” he states.

George Izomor, managing director/chief executive, MG Vowgas Limited, notes that inclusion of the item in the law is a good idea, saying Mele Kyari, group managing director of the Nigerian National Petroleum Corporation (NNPC) has been making efforts to transform the oil and gas industry and that the government should be encouraged for taking such a bold step.

He urges the National Assembly not to delay the passage of the bill.

The draft bill says: The grant of a petroleum prospecting licence or a petroleum mining lease on a previously appraised area of a petroleum prospecting licence or a surrendered, relinquished or revoked petroleum mining lease in, under or upon the territory of Nigeria, shall be by an open, transparent, competitive and non-discriminatory bidding process conducted by the Commission.