COMMUNIQUE OF THE ROUNDTABLE CONFERENCE ON PROJECT

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“SAVE NIGERIA OIL AND GAS INDUSTRY” HELD AT THE CONFERENCE HALL OF THE AFRICAN INITIATIVE FOR TRANSPARENCY, ACCOUNTABILITY AND RESPONSIBLE LEADERSHIP ON 19TH APRIL 2016

 

  1. BACKGROUND

The Nigeria oil and gas Industry is going through one of its most challenging times in the history of Nigeria due to dipping crude price, dollar and import driven petroleum products’ consumer market, non-availability of necessary infrastructures to support home brewed petroleum products, lack of access to foreign exchange by marketers, corruption etc.

Presently, Nigerians are witnessing one of the most painful queues for Premium Motor Spirit (PMS) in the history of the downstream sector. This is a paradox to what happens in other climes where oil has been used as a tool for socio-economic development. These countries on a comparative scale have enabling laws and statutes that encourage investors to invest in their countries, protect local contents and workers’ rights. Whereas in Nigeria, the Petroleum industry Bill, which started its journey as the OGIC on April 24 2000 is yet to be passed 16 years after it was introduced.

The lack of political will to pass the Petroleum Industry Bill resulting in the following negative consequences:

  • Loss of annual N3trn
  • Lack of efficient and effective institutional frameworks for monitoring the financial inflow and outflow of the industry, which has led to the sum of N11bn being unaccounted for and disparities in financial reports of the agencies involved in reconciling the inflows and outflows.
  • Project delays
  • Comatose downstream sector
  • Dilapidating infrastructures.
  • Non-alignment of Nigeria oil and gas laws with best practices leading to:
  • Loss of foreign investments in the gas sector
  • Massive divestments by the Multinationals
  • Unabated vandalism, crude theft, illegal refineries etc.
  • Increase turnover of the Top Management of the oil and gas Agencies under the Government control leading to:
  • Pervasive corruption
  • Policy summersaults
  • Dysfunctional oil and gas operations
  • Discontinuities
  • Economic mismanagement
  • Increase in labour-management strife.
  • Increasing redundancies
  • Lack of incentives for private investors to build refineries and what we have seen is that the country is littered with investments and infrastructure.
  • Inability to effectively monitor the activities of the operators.
  • Daily 300,000 to 400,000 barrels of Crude Oil theft through pipeline vandalism
  • Inability to meet with cash call obligations and severe funding challenges due to huge cash call arrears of some $5billion and underfunding of oil and gas operations
  • Lack of adequate sanctions for infractions of breaches
  • Overlapping functions of Agencies of Government, which slows down the decision making process.

Project “Save Nigeria Oil and Gas Industry” was launched as a platform to bring a segment of the stakeholders together to interrogate and make prescriptions the way out of parlous state of the oil and gas sector and assist the government in bringing sanity to the sector.

  1. FACILITATION AND SUPPORT

The roundtable conference was facilitated by the African Initiative For Transparency, Accountability And Responsible Leadership (AfriTAL) and supported by:

  • Trade Union Congress (TUC).
  • Nigeria Labour Congress (NLC).
  • Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN).
  • The Nigeria Union of Petroleum and Natural Gas Workers (NUPENG).
  • Institute of Chartered Mediators and Conciliators (ICMC).
  • Nigerian Bar Association (NBA).
  • JOBA Consults Limited
  • Asentek, Inc USA.
  • Mediation Training Institute (MTI).
  • International Institute of Leadership and Governance.
  • Mediation and Peace Consult.
  • Alliance Global

 

  1. ATTENDANCE

The roundtable was attended by 40 delegates and representatives of the Trade Union Congress (TUC), Nigeria Labour Congress (NLC), Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Institute of Chartered Mediators and Conciliators (ICMC), Nigerian Bar Association (NBA), JOBA Consults Limited, Alliance Global, Civil Society Legislative Advocacy Center (CISLAC), Mediation and Peace Consult Limited, Nigeria Extractive Industry Transparency Initiative (NEITI), Presidency, International Institute of Leadership and Governance.

  1. OPENING

The roundtable conference was declared open by Omenuko Chief (Dr) P. K Njoku, the President, and Director General of International Institute of Leadership and Governance.

  1. ROUNTABLE PAPERS
  2. Resuscitating The Nigeria Oil And Gas Industry For Sustainable Growth And Development by Omenuko Chief (Dr) P. K Njoku, President, and Director General of International Institute of Leadership and Governance
  3. State Of The Oil And Gas Industry And The Need For Transformation To Reposition The Sector For Efficiency by the African Initiative For Transparency, Accountability And Responsible Leadership
  • Save Nigeria Oil and Gas Industry: The Position of PENGASSAN by Comrade Hyginus Chika Onuegbu, the Chairman of TUC, Rivers State
  1. Address delivered by Comrade Bobboi Bala Kaigama, President of Trade Union Congress Of Nigeria (T.U.C)
  2. Speech delivered by Comrade Ayuba Wabba, President of Nigeria Labour Congress (NLC)
  3. Goodwill Message by Orji O. Orji, Representative of the Executive Secretary of the Nigeria Extractive Industry Transparency Initiative (NEITI)
  • Goodwill Message by Agada Elachi, Chairman, Unity Bar, Nigerian Bar Association
  • Goodwill Message by ‘Segun Ogunyannwo, Registrar, Institute of Chartered Mediators and Conciliators (ICMC)

 

  1. THE NEGATIVE CONSEQUENCES OF A COMATOSE OIL AND GAS INDUSTRY

 

  1. Severe Underfunding of Joint Venture (JV) operations leading to contraction of the industry
  2. Unprecedented Cash call arrears of some $5billion.
  • Increased unemployment caused by multiple redundancies in the sector
  1. Fall in the nation’s revenue accruable from Oil and Gas Sector due to global oil shocks, corruption, untidy accounting books by the Agencies of Government and inability to account for over N11bn
  2. Exacerbated Hunger and poverty
  3. Perennial fuel queues
  • Shortage of Gas to service the integrated power plants resulting in inadequate power generation
  • Increase in armed robbery, kidnapping, hostage taking.
  1. Lack of sustained national economic development
  2. Difficulty in funding social obligations including payment of salaries as at when due by Governments at all levels.
  3. Collapse of the forex market.
  • Mandatory forced 40% reduction in JV approved programme budget mid-year 2015.

 

  • Inability to refine petroleum products in Nigeria
  • Dependence on the importation of Dollar driven petroleum products
  • Unofficial hike in the price of petrol, which currently sells for up N250 per litre in some States of the Federation.

 

  1. CONFERENCE RECOMMENDATIONS

 

  1. Conclude the Reform in the Petroleum Industry through the passage into law of a Petroleum industry Bill that shall wholly address the challenges of the industry, Nigeria’s national aspirations, emplace accountability and transparency in running the oil and gas industry.
  2. Address the challenges of Crude Oil Theft, Pipeline vandalism and insecurity
  3. Address the Funding challenges and clear the arrears of Cash calls
  • Irrespective of whatever statute framework the government adopts (whether the multi statute framework as is being done currently or the single comprehensive Statute Framework as was with the PIB of 2012), ensure that all aspects of the industry not just the Governance and institutional framework are covered in the petroleum industry bill(s).
  1. Adopt he competitive NOC (NOC) model as is done in Norway in redefining the roles of the new National Oil Company that will replace the NNPC. In the Norwegian Model for example, Norway administers its hydrocarbon sector using three distinct bodies: a national oil company, Statoil engaged in commercial hydrocarbon operations; a government ministry to help set policy; and a regulatory body to provide oversight and technical expertise, the Norwegian Petroleum Directorate (NPD).

 

  1. Adopt the Single regulator model, which is international best practice.
  2. Put in place policies that will drive sustained growth in the development of our local refining capacity, end the regime of importation of refined petroleum products and ultimately usher in Nigeria as an exporter of refined petroleum products.
  • Put in place policies that will drive significant increase in domestic gas supplies especially for power generation and industrial development
  • Adopts policies that will enhance the ease of doing business such as the creation of a peaceful and competitive business environment that enables petroleum operations in Nigeria
  1. Define the roles of the Unions and expectations to enable the Unions commence actions that shall enable the Federal Government conclude on the PIB.
  2. The forum should URGENTLY get the current Petroleum Industry Governance and Institutional Framework Bill 2015 for in-depth study to enable it appropriately engage the stakeholders and the National Assembly.
  3. The forum should be enlarged to include the Oil Producers’ Trade Sector (OPTS), the NNPC, PPPRA, PEF and other critical stakeholders.
  • The convener is to URGENTLY liaise with NEITI as a body that has a wider reach and that has oversight on the Sector to convene the all-inclusive stakeholders in the month of May or early June 2016.
  1. COMMENDATION

 

The Conference Delegates unanimously commended:

 

  1. Convener of the Conference Dr. Louis Brown Ogbeifun and the African Initiative For Transparency, Accountability And Responsible Leadership for organizing the “Save Nigeria Oil And Gas Industry”

 

  1. All supporting Organizations
  • Trade Union Congress (TUC)
  • Nigeria Labour Congress (NLC)
  • Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN).
  • Nigeria Union of Petroleum and Natural Gas Workers (NUPENG)
  • Institute of Chartered Mediators and Conciliators (ICMC)
  • Nigerian Bar Association (NBA)
  • JOBA Consults Limited
  • Asentek, Inc, USA
  • Nigerian Extractive Industry Transparency Initiative (NEITI)
  • Mediation Training Institute (MTI) ICMC,
  • International Institute of Leadership and Governance.
  • Mediation and Peace Consult the Media
  • Alliance Global
  • The Media

 

  1. All the Organizations pledged to support project “Save the Oil and Gas Industry”

Signed by the Facilitation Committee on Behalf of Delegates:

                                                                 

                                                      —————————————      —————————————

Mr ‘Segun Ogunyannwo                             Dr. Louis Brown Ogbeifun

Secretary                                                      Chairman

0803 407 1812                                             0803 659 1794

Official email: info@afrital.org

info@savenigeriaoilandgasindustry.com

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