FOREIGN OIL FIRMS OPPOSE PETROLEUM INDUSTRY BILL

Petroleum Industry Bill (PIB) is Nigerian government’s attempt to restructure the
Nigerian oil industry which will also enforce sustainability, transparency and greater
Nigerian control over her natural resources is staunchly opposed by foreign oil
companies and their government.

The proposed bill is considered too revolutionary by foreign interests, a situation that
led to the emergence of a coalition designed to frustrate its passage into law. The
oil companies, made up largely of Shell, Exxon Mobil, Chevron, Texaco and Total,
are opposed to many provisions of the bill which increased royalties payable to the
Nigerian government.

The bill, if it becomes law will remove control of the oil sector from the foreign oil
companies and ensure greater accountability, transparency and anti-corruption in the
collection, determination, recording and management of the nation’s multi-billion dollar
oil revenue.

According to media reports, representative of the United Kingdom Government openly
warned against the adjustment of the existing contracts on account of the proposed
bill, noting that, “while the oil bill is good, a contract is a contract that must be
respected by all parties.”

The visits of Prime Minister David Cameroon of the United Kingdom and Chancellor
Angela Merkel of Germany to Nigeria may not be unconnected with their attempt to
have the bill watered down to suit their interest.

The oil companies were also said to be opposed to provisions in the bill which
stipulated determination of crude outputs at the points of production rather than at
export points which is the current practice.

It was learnt that the provision that 10 per cent of oil earnings should go to the oil
producing communities was seen by the oil companies as extra burden on their
investment which they warned would lead to disinvestment in the Nigerian oil sector.

Facility for Oil Sector Transparency in Nigeria (FOSTER) had issued a policy brief,
urging the Jonathan-led administration to ensure quick passage of the bill.

FOSTER listed six main provisions of the bill which the administration must protect,
if the nation is to make any progress in the struggle for accountability, transparency,
increased national benefit and anti-corruption in the nation’s oil sector.

The provisions include open, competitive and transparent oil block award process,
strong rules for lifting oil licenses, defining process for selling shares in the NNPC and
Joint Ventures Operations, increased access to oil transaction information, clarity on

revenue flow and better NNPC oversight and corporate government.

Federal Government to Establish Free Trade Zone Desk Offices

Federal Government of Nigeria (FGN) plans to establish Export Free Zones desk offices
to remove the bureaucratic bottleneck that impedes easy access for foreign investors.
These strategic desks will be in the departments of Customs and Excise, Nigerian
Immigration Service, NAFDAC and Standard Organisation of Nigeria (SON).

According to Dr. Olusegun Aganga, minister of Trade and Investment, the decision is a
fall out of President Goodluck Jonathan’s economy policy plan to revamp the economy
in terms of job creation and wealth. Dr Aganga disclosed to Governor Liyel Imoke of
Cross River State during a courtesy call in Calabar that modalities will be put in place
to ensure Nigeria’s pioneer Free Trade Zone in Calabar and the free trade retail shop,
Tinapa, are functional to achieve the purpose for assignment which they were established.

Dr. Aganga, also said he was collaborating the Minister of Internal Affairs on giving
visas at entry points, stating that out of the 28 free trade zones established in the country,
only 12 are functional and that efforts are being put in place to make sure they attain their
potentials.

The minister noted that his ministry will work closely together with states to transform
the economy in the next four years as they will collaborate to achieve good results of
which the visit to Calabar was just the beginning, adding that there is an effort by the
ministry to collaborate with the business sector to form “Team Nigeria” to brand the
country and this will entail travelling abroad with representatives from the states and
business communities to attract investments to the country.

He described his office as a strategic ministry, which combines a lot of activities
including attracting investments, as well as exposing local investors to increase
production and promote local products while also working seriously to develop small
scale enterprises and also collaborate with the Nigerian Export Processing Zones
Authority (NEPZA), hinting that the primary purpose of visiting Calabar was to inspect
Calabar Free Trade Zone and Tinapa and see how they are working and contributing to
the economic growth of the country.
Dr Aganga disclosed that the Ministry intends to assist Cross River State to become one
of the fastest economies in the country, adding that arrangements are at hand to establish

a farm produce industry and a heart/cancer hospital in the state to boost health tourism
while assuring that there are many more opportunities to come.

Governor Liyel Imoke hoped the minister would use his exposure and experience to
create incentives and right opportunities for the state to grow while advocating that laws
and frame work should be made available for free trade zones to be as functional as
practiced in other countries.

Governor Imoke condemned the idea where free trade zones are indiscriminately
scattered all over the country based on “Federal Character” while the nation’s pioneer
free trade zone in Calabar is not effectively utilised and he commended the Managing
Director of NEPZA, Dr. Adesina Agboluaja, who was the first General Manager of
Calabar Free Trade Zone for his commitment to ensure it records success.

Governor Imoke said he was looking forward to seeing the rebirth of Tinapa Business
and Leisure Resort and Calabar Free Trade Zone and the challenges impending their
growth be addressed so that they can take off and create employment as well as improve
the economy of Nigeria.

Author: nmmin

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