Nigeria wants single regulator for petroleum industry — Kachikwu

Ibe Kachikwu Minister of State for Petroleum Photo: thisdaylive.com

The federal government wants the proposed Petroleum Industry Governance Bill (PIGB) to approve a single regulator for the petroleum industry operations to remove the powers form different regulatory agencies.

Minister of State for Petroleum Resources, Ibe Kachikwu, said in his presentation at the public hearing by the Senate on the draft Bill that what the industry needed was a regulator for the upstream, midstream and downstream oil, gas and products regulation, as well as technical, economic and health, safety and environment regulation.

Also, the minister said there was need for the proposed law to establish a clear relationship between the Minister of Petroleum Resources’ role as the overall supervisor of the industry and the institution responsible for the regulation.

To ensure checks and balances on regulatory powers, in terms of administrative law, Mr. Kachikwu said there was need to ensure the power to issue regulations at all times resided with the Minister of Petroleum Resources.

“This (will) ensure that the power to issue delegated legislation is placed in the hands of the appropriate member of the executive, with responsibility both to the President and to the National assembly in terms of oversight.

“The counter check on this is that technical issues are handled by the regulator, for consideration of the Minister, who upon approval of the recommendation, will issue the appropriate regulation,” he said.

He said fundamental to resolving the question of the governance of the industry, and the role of law was presenting a more effective governance and institutional model for the management of the country’s petroleum resources and the regulation of activities within the sector.

According to the minister, all studies conducted on the petroleum sector since 1999 were on government’s role in the sector to be better clarified, while the mandate of the policy, regulatory and commercial institutions be refocused.
The objective, he said, was to ensure better sector governance, transparency of regulations and operations, accountability of the institutions, and removal of opaqueness around the industry.

The overhaul of sector policies, the minister said, has since begun, with the draft of three national policy documents on oil, gas and fiscal terms currently undergoing public consultations ahead of presentation to the Executive Council of the Federation.
Although he said the Petroleum Industry Reform Bill (PIRB) has already been developed, the fiscal Bill was being developed, and both would soon be submitted to the National Assembly for approval.

“The PIRB will address the institutional framework for the industry, while the PIGB will address the future regulatory framework for the upstream petroleum sector, midstream and downstream gas sector, and the midstream and downstream petroleum sector,” he said.

The mid and downstream industry covers the processing, bulk transportation, bulk storage, of crude oil and petroleum products, and the distribution and retail trading of crude oil and petroleum products.

The Minister said the fiscal terms bill would address purely fiscal issues around the industry already addressed in the sector policies and in the PIRB.
On the concept of single regulator for the petroleum industry, Mr. Kachikwu said the petroleum industry governance bill provided that the Commission would issue regulations in respect of a number of specified matters to give proper effect to the Act.

Considering that there were several matters in the bill not regulatory in nature, but requiring regulations, he said the Minister should be allowed to issue regulations on the advice of the Commission.

“A core aspect of the reforms propose to the effectiveness of the Minister’s powers to issue policies, supervise the industry and manage Nigeria’s petroleum resources, is the need for a well-resourced and solid technical back office,” Mr. Kachikwu said.

“Hence, the National Oil Policy and the National Gas Policy contains proposals for institutional reforms at the Ministry of Petroleum Resources in this regard. It is our position that the PIGB should address this long standing issue legislatively by creating a Petroleum Technical Directorate.”


(PT)