- To resolve $12 billion oil production crisis
This is contrary to the four anticipated bills widely reported in the media.In an interview with The Guardian in his office in Abuja, the minister disclosed: “There are going to be three bills. First, what we have currently is the Senate bill. The House of Representatives hasn’t put out any bill, and government hasn’t either.”
Although he did not give further details about the expected bills, Kachikwu explained: “We are almost at the final stages of completion of a comprehensive executive version of the PIB on all three stages, which we will put before the National Assembly to help the discourse. We are finishing that and it will go through the Federal Executive Council, and we will later schedule it for stakeholders’ inputs. We are working feverishly to conclude that before the lawmakers return from recess so it can go through the rigours of getting passed.”
The minister reiterated President Muhammadu Buhari’s resolve, as well as the legislators’ commitment, to getting the bill passed. “It is not likely to be controversial, given the fact that the interests of people in the oil sector are very huge and you will continue to have, for good reasons, people respond to whatever we do.” Kachikwu, however, clarified that “Part of the segmenting (of the bill) is to enable the lawmakers to begin to pass some, while some are still being debated. But I think that once we get this out, there will be lots of engagements and as people are willing to accommodate here and there, we will be able to get it passed.
“I’m optimistic there can’t be any other way, and we are being very careful in our own drafting to ensure that some of the concerns that have been expressed are taken into consideration.”
The Federal Government revealed that it is yet to submit an executive bill to the National Assembly on the PIBs, rather it hopes to do so before the legislators return from recess.Earlier in March, the industry woke up to a new controversial Petroleum Industry Governance Bill (PIGB). Strangely, the 53-page document, which was presumed to have been an executive bill, was actually submitted by the Senate.
Energy experts believe that a robust petroleum industry law will resolve knotty issues in managing the nation’s oil industry. But the PIB has suffered many setbacks in the last 10 years of democratic governance.Meanwhile, the government hopes to resolve about $12billion disputes between it and the International Oil Companies (IOCs), made up of over $6bilion joint venture (JV) cash call arrears, and another $6billion awarded against it for over-lifting of crude under the Production Sharing Contracts (PSCs). Speaking on government/ Nigerian National Petroleum Corporation (NNPC) efforts to clear the outstanding $6billion cash call arrears, which had frustrated oil production in the country, since JV partners were reluctant to continue with activities under such huge debts overhang, Kachikwu disclosed that negotiations on the subject have been very challenging.
Cash calls are requests to non-operating partners of joint ventures; in this case, the NNPC, for payment of expenses to be incurred for specific projects. Under current negotiations, outstanding arrears would now be paid over a period of up to six years. According to the minister, until the NNPC concludes its outstanding audits, the true state of its indebtedness to the Federation Account can never be determined, as it has only done with the 2010 to 2013 audits, while those of 2014 and 2015 are still in progress.