Oyegun cautions Northern Govs over opposition to PIB

Former governor of Edo State, Chief John Odigie–Oyegun, has cautioned governors and National Assembly members of Northern extraction, over their vow to kill the Petroleum Industry Bill, PIB, pending before the National Assembly for consideration, saying that there were already enough security challenges facing the country, especially from the North.
Oyegun, in his reaction to the decision by Northern Governors Forum, Senators and House of Representatives members from the North, to kill the PIB on the ground that its provisions were anti-North, warned them to avoid doing anything that would plunge any part of the South into crisis as the country might not survive another crisis.

National Assembly Adopts $79 Oil Benchmark for 2013 Budget

After weeks of disagreement, the two chambers of the National Assembly have harmonized their divergent positions and adopted $79 per barrel as the recommended oil benchmark  for the 2013-2015 Medium Term Expenditure Framework(MTEF) and Fiscal Strategy Paper.

President Jonathan had predicated the 2013 -2015 MTEF and Fiscal Strategy Paper on an oil benchmark of $75 and had based the 2013 Appropriation Bill on the same benchmark. However, controversy arose when the House and the Senate adopted $80 per barrel and $78 per barrel respectively during the consideration of the proposals in their separate chambers.

This divergence of positions on the matter resulted in the setting up of a Joint Conference Committee in the National Assembly to explore the possibility of reaching a common position.

After extensive deliberations and consultations by the conference committee, a harmonized report was adopted yesterday, recommending $79 per barrel as the appropriate oil benchmark price. According to the report, the additional funds arising from the $4 increase over and above the $75 proposed by the executive will be used to reduce domestic borrowing and the budget deficit as well as funding critical infrastructure projects.

NASS probes NNPC’s secret cash reserve

The Senate has discovered that NNPC was operating a secret cash reserve where it withdraws money to augment funds appropriated to it by the National Assembly in the budget.

Meanwhile, the National Assembly was told that the Nigerian National Petroleum Corporation, NNPC, realized N2.36trillion between January and September, 2012, while its total expenditure for the same period stood at N2.84trillion.

Disclosing this when he appeared before the Senator Magnus Abe, PDP, Rivers South-East led Joint National Assembly Committee on Petroleum, Downstream for the 2013 budget defence, the Corporation’s Chief Strategist, Dr. Tim Okon explained that the projected revenue for January and September, 2012 was N4.02trillion. Okon who noted that the full year performance was expected to be N3.23trillion, also told the lawmakers that the 2012 plan for the three refineries was for the refining of 44million barrels. He added that 23million barrels out of a total annual allocation of 162million barrels were refined.

Senator Abe also asked, “Your expenditure is more than the revenue you received during the period. Where did you get the extra money from?

Reacting to the issues raised, Okon said, “The NNPC is a running business and it has reserves and we got the money from the reserves.”

Okon who had earlier told the committee that he did not have the details with him, told the lawmakers that the budget document submitted to the committee was not “an audited account of the NNPC. You can wait until we have a full audited account and then know whether there is a budget deficit.”

Also in his remarks, the Group Executive Director, Refining and Petrochemicals, Philip Chukwu, however tried to explain the source of the extra money that made up the corporation’s total expenditure, adding, “There are proceeds from NNPC’s oil production activities. It also funds the work in the refineries from the profits coming from the revenue streams. That is why we have the higher operational expenses.”

                           

19 Northern Governors to Meet on PIB

Governors of the 19 northern states have resolved to meet and scrutinize the bill with a view to determining its implications for the region.

Kano State Governor Alhaji Rabiu Kwankwaso who disclosed the planned meeting said the state chief executives were set to deliberate on the bill to know its benefits to the region.

Confirming the controversy trailing the PIB, the governor said he was uncomfortable with the bill as it affects the north given his level of understanding of the nation’s revenue sharing formula. He said “as a former member of Niger Delta Development Commission (NDDC), former member of National Assembly and a former minister and indeed a serving governor, I have  vast knowledge on what is been shared to all the states”.

Stressing the determination of the political stakeholders in the north to make case for the region, Kwankwaso said “with regard to PIB, we in the north are keenly watching and we will not allow our region to be plunged into yet another uncertain future as we will do all we could to make sure that there is equity that will guarantee a sense of belonging to every citizenry.”

Budget 2013: Oil benchmark pegged at $75

The Federal Government pegged oil benchmark price for $75 per barrel of crude oil in the 2013 budget proposal. This according to the Minister of Finance, Dr. Ngozi Okonjo-Iweala would shore up the economy and make for macroeconomic stability. Okonjo-Iweala, who spoke to journalists shortly after the presentation of the 2013 budget proposals to the National Assembly by President Goodluck Jonathan said $75 was the sensible price to fix the benchmark.

The National Assembly, however, is insisting on a benchmark of $80 per barrel, after backing down from $85 that its joint committee had earlier recommended. The minister said the budget was predicated on the assumption that the country would produce 2.53 million barrels of crude oil daily. According to her, another reason that makes the $75 benchmark attractive to the Executive arm of government is the need to ensure prudent management of finances.

NGO launches Oil industry enlightenment campaign

The Campaign for Growth in the Nigerian Oil and Gas Industry (CGNOGI) has launched a nationwide public enlightenment crusade aimed at providing public education and promote informed discourse on issues affecting the oil & gas industry.

The non-governmental organization which published the maiden edition of the public enlightenment campaign on Wednesday, said the initiative became imperative in view of the need to ensure that all stakeholders have all the facts and can meaningfully contribute to public debate on issues. The NGO argued that for too long a small group of individuals and corporate bodies have consistently monopolized the discussion of issues for selfish interests, arguing that in this age of information explosion, there is need for citizens to be adequately informed.   

Explaining the rationale for the campaign, the Group said the oil and gas sector is strategic to the aggregate economy; pointing out that anything that happens in the industry will easily have multiplier effect on other sectors.

In view of this, the Executive Secretary of the Group, Mallam Abubakar Kalto noted that rather than expedite the reform required to move the industry forward, the current debate over the provisions of the draft PIB, which is before the National Assembly is aggravating the challenges in the sector.

According to him, the PIB is very important as it aims to overhaul the industry that has not been blessed with such legislation for several years. Contrary to the view of many operators that the PIB will scuttle their operations if allowed to pass into law, Kalto explained that the overhaul will touch on indigenous and foreign operators in the sector.

The CGNOGI boss therefore stated that the goal of the Public Enlightenment Series is to put the record straight by educating the operators and investors alike about the critical issues that are causing what he called undue delay in the passage of the bill into law by the National Assembly.

In its message released to the public on Wednesday, CGNOGI highlighted the fact that Nigeria has an estimated 37.1 billion barrels of oil in reserves and produces an average of over 2 million barrels per day in compliance with the allocated production quota from the Organisation of Petroleum Exporting Countries (OPEC). His words: “The gas reserves are in excess of 165 trillion cubic feet and like its oil, Nigeria’s gas is rich in liquids and low in sulphur.”

According to Kalto, the legal framework that has guided the industry to date is the Petroleum Act, which was enacted in 1969. The Act, he stated, vests the entire ownership and control of all petroleum in, under or upon any lands within the territory of Nigeria in the State. The legal framework, Kalto said, gives the power to grant the minister the exploration, prospecting and production rights. Aside the Petroleum Act, CGNOGI identified the Deep Offshore and Inland Basin Production Sharing Contracts Act No. 9, Laws of the Federation of Nigeria 1999 as another laws that govern the industry.

Kalto said the modern legislation that is expected to bridge the gap is the draft 2012 PIB that is intended to spell out a new legal framework that will govern the operations and activities of the oil and gas industry. He therefore advised that Nigerians and her business partners, the international oil companies to embrace the PIB because it is designed for the benefit of everyone.