10072020 - Day 4: Panel grills ‘Magu's 7 Untouchables’

Vanguard, FRIDAY, JULY 10, 2020—33
PIGB: Stakeholders in cautious
optimism
By Sebastine Obasi
There is much anxiety and
cautious optimism
over passage of the much
awaited petroleum industry
governance bill (PIGB) as the
month of June comes to an
end.
This is based on promises
made by government officials
that the PIGB will be passed
this June. The Speaker, House
of Representatives, Femi
Gbajabiamila had in February
during a courtesy visit by a
delegation of the Experts
Advisory Panel of the Nigeria
Natural Resource Charter
assured that the PIGB will be
passed before the end of June.
He said: “The legislature
needs to work with you. We
need to work together. Oil
and gas is an integral part of
our economy. It remains the
mainstay of our economy, and
so we have to work together
to protect it. “It requires us to
work with those who
understand the nuances of
that sector. For the oil and gas
industry to develop, there has
to be a symbiotic relationship.
You have the knowledge and
we have the capacity to make
it happen. “PIGB is on the
front burner. We intend to start
the process soon. We’re
hoping that by June, we’ll be
able to see the light at the end
of the tunnel.
Stakeholders''
concern
However, industry
stakeholders have continued
to express cautious optimism
as they await the passage of
the bill. Dr. Frank Ihekwoaba,
Chief Finance Officer, Eroton
Exploration and Production
Company Limited, while
expressing caution, stated that
the PIGB will follow public
sector model that rewards
effort as opposed to rewarding
result. “That the National
Assembly is still struggling to
muster up the energy to pass
a PIGB is basically extreme
procrastination that ensures
Nigeria will remain
moribund, archaic,
unaccountable and non
competitive. That’s who we
have been, who we are, and
who the inaction ensures
Nigeria remains. In that state
of anomie, a few benefit while
the majority languish as
usual.
Professor Wumi Iledare,
Director, SPE Africa Region, is
optimistic the bill will be
passed. “PIGB at the end of
June is plausible because all
the work was completely done
in the last assembly. Nigeria
has much more to gain if PIGB
is passed. It will enhance
transparency and
accountability and improve
investor’s perception. It would
expunge the amorphous
governance of the oil sector with
a distinctive commercial,
regulatory and policy
institutions. It will make
institutions more apolitical with
well defined criteria to select
board members based on
experience and competence
for value addition.
“There will be interconnectivity
of the value chain in terms of
effective regulatory framework
with no room for price control or
subsidy along the value chain.
PIGB establishes institutions to
enforce fiscal policy and
regulations effectively, equitably
and ethically, in terms of revenue
collection
ethically, in terms of revenue
collections, lease administration,
corporate and community
responsibility,” he added.
Corroborating Iledare’s
submission, Bank-Anthony
Okoroafor, immediate past
Chairman, Petroleum
Technology Association of
Nigeria, PETAN, believes the bill
will be passed as promised. “It will
be passed. If the right PIB is passed,
it will bring fiscal clarity to our
industry. Oil is being discovered
everywhere and we need to put
our acts together. Investment will
go to areas with better fiscals
clarity. We have lost a lot of
investment by this decade that the
PIB has not been passed,” he
stated.
For Dr. Chambers Oyibo,
former Group Managing
Director, Nigerian National
Petroleum Corporation, NNPC
and Chairman/Chief Executive
Officer, Prime Energy Resources
Limited, the circumstances are no
longer the same. “Oil prices are
very low now. If our legislators are
serious about passing the PIGB,
they must have done a lot of work
on it. The law that regulates the
most important industry in
Nigeria shouldn’t take more than
18 months. Our legislators don’t
seem to know the impact of
making this law as it affects the
citizenry who have been waiting
endlessly. Can you imagine how
long it has been from the regime
of former President Olusegun
Obasanjo to President
Muhammadu Buhari? He asked.
About the PIB
The concerns of the
stakeholders, no doubt stem from
the fact that the bill originally
known as petroleum industry bill,
PIB, has been in the works for close
to two decades,
as it was first introduced in the
National Assembly in the Year
2000, thereby making it easily the
bill that has spent the longest time
under our bi-cameral legislative
bodies. Having suffered a setback
in the 7th Assembly, it was decided
that a new approach would be
adopted to facilitate its passage
and signing into law. The bill was
subsequently unbundled into
several segments by the 8th
National Assembly, which was
aimed at making it easier for the
less-controversial aspects of the
bill to have easy passage while the
more controversial aspects are
dwelt more upon. The Petroleum
Industry Bill (PIB) was therefore
split into four parts, namely:
Petroleum Industry Governance
Bill (PIGB), Petroleum Industry
Administrative Bill (PIAB),
Petroleum Host and Impacted
Community Bill (PHIB) and
Petroleum Industry Fiscal Bill
(PIFB). In January 2018, the
Petroleum Industry Governance
Bill was passed by the House of
Representatives. This marked a
significant milestone in the journey
of replacing the obsolete
Petroleum Act (1969), as the
Senate had earlier passed the
PIGB in May, 2017. Some of the
underlying principles include:
Effective and capable institution,
clear roles and accountabilities,
transparency and ease of doing
business. Core objectives in the
PIGB include: i. To provide a one
stop shop Regulatory Authority;
ii. To provide functional
commercial entities; iii.
•Timipre Silver
Discretional powers abolished;
iv. Improved technology and
innovation; v. Clarity of roles and
accountabilities; vi. Create
efficient and effective governing
institutions with clear and
separate roles in the Petroleum
Industry; vii.
Establish a framework for the
If the right PIB is
passed, it will bring
fiscal clarity to our
industry. Oil is
being discovered
everywhere and
we need to put our
acts together
creation of commercially
oriented and profit driven
petroleum entities that ensures
value addition and
internationalization of
petroleum industry; viii. Promote
transparency and accountability
in the administration of the
petroleum resources of Nigeria;
ix. Create conducive business
environment for the petroleum
industry operations.
Disappearing Opportunity
There has been a flight of new
investment opportunities from
Nigerian to our neighbour’s in
Ghana, Angola and Equatorial
Guinea who have more defined
laws and governance structure.
Experts estimate that the country
looses approximately
$15million annually in lost
investment due to loss of investor
confidence in the industry. The
passage of the bill will engender
investor confidence in the
industry and attract more
Foreign Direct Investments.
Post COVID-19 Oil Economy
With oil prices hitting an all
time low as a result of price
wars between Saudi Arabia
and Russia as well as reduced
demand occasioned by the
COVID-19 pandemic, it is
apparent that oil dominance
as an energy source of choice
in the post COVID-19
economy will be challenged.
The time is therefore ripe to
streamline the number of
MDA’s involved in the
governance structure in the
Nigerian Oil and Gas
Industry, which conforms to
the overall target of the
Government in reducing cost
of governance based on
current realities and scarce
resources. A single
regulatory body would ensure
end to end project cycle
approval which will greatly
reduce transaction cost,
eliminate regulatory
competition and
enhance value
maximisation. It will also
promote the Executive Order
001 on Ease of Doing Business
in Nigeria.
“Why we are investing in 155,000-tonne
palm nut cracker plant’’
By Jimoh Babatunde
THE owners of an
Agro firm, Golden
Seed Fats and Oils has
explained why they are
taken the bold step of investing
in a 155,000-
tonne capacity palm nut
cracker plant in the
South-South region.
Mr Lanre Sam-
Akinkunmi, Co-Founder
and Chief Executive of
the firm, told newsmen
during a media briefing in
Lagos that the company
had also opened a
100,000-tonne palm kernel
shell milling plant.
Sam-Akinkunmi noted
that there had been a gap
in the Crude Palm Oil
(CPO) production chain
majorly as a result of nonavailability
of cracker
equipment in the country.
According to him, the
stand-alone factory is a
Foreign Direct Investment
(FDI) in equity fund
between him and his Co-
Founder and Executive
Director, Mr Ilkin Shahverdiyev
from Turkey.
“The company is currently
focused on edible
oils and primarily focused
on the palm kernel oil
value chain.
“Our 155,000 tonnes per
annum capacity of palm
nut cracker is largest in
West Africa; 100,000
tonnes palm kernel shell
plant; 15,000 tonnes of
palm kernel oil and
20,000 tonnes of palm kernel
cake.
“We are currently working
with 2,000 smallholder
oil palm farmers under
the aegies of Nigerian
Palm Producers Association
and the Oil Palm
Growers Association of
Nigeria (OPGAN).
“Golden Seeds is helping
these farmers with
social investments such as
pre-financing for operations,
harvesting, milling
operations and after production.
We offtake at an
agreed rate beneficial to
the farmers
“We had to bring in significant
FDI when we realised
the huge gap in the
palm nut cracker segment
of the sub-sector.
“Because of the capacity,
we have begun the process
of generating our
energy to ease the burden
on the community,” Sam-
Akinkunmi said.
He said the firm had
done these in Ondo, Edo
and some parts of Delta
States where producers
were majorly located to
aggregate from them who
produced in small quantities,
saying that they
were grouped to increase
volume during offtake.
The Co-founder also
noted that the firm was
working at integrating its
carbonisation stove to be
launched in September to
process palm kernel
shells to charcoal to service
the cement industry.
“All our value chain development
have a target.
For the palm kernel oil,
we are targeting the soap
production industry.
“For the palm kernel
shells, we are looking at
the cement industry while
the palm kernel cake is
targeted at the pig meal
industry in Turkey, Dubai
and Oke-Aro pig farm in
Ogun.
“Sixty per cent of pig
meal is palm kernel cake
which is cheaper than
soya bean meal.
“We will also grow our
palm oil production because
of the growing demand
for soap, vegetable
oil, margarine and others.
Whereas, all these products
have over 60 per cent
palm oil content.
“We have a lot in out kitty;
like the refinery we
intend to build. So, our
venture into this sector
will be a win-win situation
for both the Federal,
state, processors, farmers
and everyone across the
value chain,” he said.
Sam-Akinkunmi highlighted
some of the challenges
in the sector as
unavailable key moratorium,
low interest rate finance
and others.
He applauded Federal
Government’s land border
closure policy which
had channelled a lot of
investments to the palm
oil sector.
Agric: IFAD-VCDP rates
Ebonyi best among participating
states in Nigeria
By Chukwuemeka Opara
THE International
Fund for Agricultural
Development (IFAD)-
assisted Value Chain Development
Programme
(VCDP) has rated Ebonyi
the best among its participating
states in Nigeria.
Alhaji Garba Bala, the
new National Programme
Coordinator of IFAD-
VCDP, gave the commendation
when he visited
Chief Moses Nome, Commissioner
for Agriculture
and Natural Resources,
as part of his familiarisation
tour of the state.
Bala said that Ebonyi
distinguished itself by its
18-page document that
showcased all its completed
projects and another
four-page document that
showed its ongoing
projects.
“The Ebonyi office will
commence new projects
by the end of July as over
N500 million will be released
to it for effective
project implementation,”
he said.
Bala said that Ebonyi
was the second state being
visited after Niger
since he assumed office on
June1. “I, however, urge
the state government to
expedite action on the
payment of its counterpart
fund as it is very important
and meaningful
to the programme.
“The state government,
particularly the
governor, has shown
great enthusiasm in revolutionalising
agriculture
and has collaborated
effectively with us to
achieve set goals.
“It should, however, be
understood that the
counterpart funds in
question are in arrears as
the government has offset
current ones.
“Government is, however,
a continuous process
and government
does not belong to any
individual whether past
or present, it is the same
Ebonyi,” he said.
He said that the programme
had effectively
taken steps to cushion
the effects of COVID-19
on its benefiting farmers
across the country with
the provision of items
such as protective wears,
face masks, sanitisers,
chemicals and other palliatives.
The state commissioner
said he was gratified
but not surprised to hear
that Ebonyi was the best
performing state in the
country on IFAD-VCDP
programmes.