The Nigeria National Resource Charter (NNRC) has lauded recent efforts made by both chambers of the National Assembly towards ensuring the unhindered passage into law of the protracted Petroleum Industry Bill (PIB) this year.
The NNRC, a not for profit organization is at the forefront of advocacy for, and supporting the extractive industry, government, civil society and citizens to efficiently harness Nigeria’s natural resources wealth for public good. Driven by this, the NNRC has since 2012 produced Nigeria’s most comprehensive and up to date report on developments in the petroleum sector tagged ‘The Benchmarking Exercise Report (BER)’ on the state of governance, strengths, and weaknesses in Nigeria’s management of its petroleum resources.
The NNRC believes that with the commitments and promises by the leadership of both chambers; Senate and the House of Representatives (HoR) exemplified by the public hearings on the Bill which took place from Monday, 25th January to Thursday, 28th January, 2021, there is need to ride the momentum and get all stakeholders on board to achieve what undoubtedly would be the most profound piece of legislation for the transformation of the Nigerian economy.
Having consistently highlighted the weaknesses in two significant aspects of resource management in Nigeria, namely; the contentious issues surrounding the management of host communities impacted by extraction, and the management of the Nigerian National Oil Corporation (NNPC), the NNRC urges the Federal Government to finally resolve the pervasive issues facing the petroleum sector. The Federal Government is encouraged to do this to ensure that Nigeria will be able to meet global best practices and also to effectively ‘identify, explore, account for, mitigate or compensate for the negative effects of extraction at all stages of the project cycle” and run a National Oil Company (NOC) that is effective accountable, with well-defined mandates and an objective of commercial efficiency.”
While addressing the consistent gaps revealed by the NNRC’s BER in the past, the NNRC urges the Federal Government to also prepare for the future, by earnestly refocusing the country’s energy policies to accommodate the present realities with emerging developments in global energy consumption which encourages the adoption of renewables to support existing fossil fuels. In doing so, the government will not only ensure that Nigeria’s natural resources are managed in a way that ‘secures the greatest benefit for citizens through an inclusive and comprehensive national strategy, legal framework and competent institutions’, it will also position the Nigerian economy to benefit in the future.
Thus, the NNRC reiterated key submissions made in its memoranda to the National Assembly, advocating that the PIB provides: Clarity on the capitalization of NNPC to enable it adapt a commercially focused framework that allows it operate in a competitive space and explore the possibility of an initial public offering (IPO) with more private sector and possible citizen participation as practiced in other countries, allowing for greater transparency and accountability of the Nigerian National Oil Company (NOC).
It also calls for the PIB to allow for meaningful participation of host communities in decision making in managing trust; at the Board of Trustees and Management Committee, to engender a conducive operating environment. Another recommendation will ensure mechanisms for dispute resolution are accommodated to address conflicts that may arise in the determination of host community entitlements.
Finally NNRC asks for the Liberalization of the midstream and incentivize gas investments by not legislating the base gas price but instead allowing it be determined by the practical framework that considers cost of production and pipeline transportation.