Press Release
Text of a World Press Conference

Text of a World Press Conference

TEXT OF A WORLD PRESS CONFERENCE ON THE STATE OF NIGERIA’S OIL AND GAS SECTOR REFORMS BY REV. DAVID UGOLOR, COALITION OF CIVIL SOCIETY ORGANISATIONS FOR PIB CAMPAIGN, ABUJA, TUESDAY JUNE 21, 2011

Good afternoon ladies and gentlemen of the Press.

Let me begin by commending the Nigerian and international media for its sustained commitment to monitoring Nigeria’s economic reforms. The country’s steady macroeconomic growth in recent years has been largely attributed to these reforms, but it is apt to point out that rises in oil prices in the international market contributed significantly to this growth.

This is a pointer to the critical role the oil and gas sector plays in our national life, and there is therefore an urgent need to deepen reforms in this important sector if our quest for economic parity with the world’s biggest economies by 2020 is ever to be realized.

We maintain that the time is now to arrest the half-century long criminal hemorrhaging of our nation’s oil and gas wealth, which has seen Nigeria losing over $500 billion in revenue that should otherwise have been  invested in human development.

At home and abroad, analysts and friends of Nigeria have laid the blame for this state of affairs squarely on lack of transparency and accountability, weak institutions and the absence of political will. One clear opportunity to demonstrate the government’s political will to emplace long-overdue reforms in the oil and gas sectors is the one we missed by not passing the Petroleum Industry Bill (PIB).  Nigeria’s civil society broadly supported the PIB process and earnestly struggled for its passage by the Sixth National Assembly out of informed conviction on its potential to halt Nigeria’s “resource curse” and enact a new beginning in the governance of oil and gas wealth in Nigeria. We were therefore disappointed when the consideration of the Bill was dropped just before the end of the last administration for reasons that are as yet unclear to Nigerians.

The non-passage of the PIB has created an environment of uncertainty for new investments by the International Oil Companies (IOCs) which has resulted in loss of potential revenue in royalties by the Nigerian government. It has also frustrated the building of local industry capacity as envisaged under the new Local Content Regime.

While the nation foot-drags on the PIB, discretionary powers of the Minister, especially in the management of our acreages, continues unabated, leaving room to abuse and embarrassing accusations as we have seen with the outgoing Minister. In the meantime, the Nigerian National Petroleum Corporation (NNPC) descends further into rot, heaping even more cost and liabilities on the government side of petroleum business. It was no surprise, therefore, that the NNPC came lowest in an index released early this year by the international transparency watchdogs Transparency International and Revenue Watch Institute which rated the performance of 44 national and international energy companies around the world on disclosure and anti-corruption.

 

We call on Mr. President to take the following actions as evidence of good faith and political commitment to his mantra of ‘transformation’:

  • Prompt release of the report of the ongoing comprehensive audit of the Nigerian National Petroleum Corporation (NNPC)
  • A strong statement from Mr. President, disassociating his good name from recent allegations of abuse of powers and financial impropriety leveled against the immediate past Minister of Petroleum, while restating the present administration’s commitment to transparency in the oil and gas sector
  • The appointment of a credible individual that is devoid of interests in the sector as Minister of Petroleum as opposed to the reappointment of the immediate past Minister as currently being speculated
  • Implementation of remedial measures identified in the NEITI Oil and Gas Sector Audit reports for 1999-2004, 2005 and 2006-08

The National Assembly also has an important role in legislation and oversight of reforms in the sector. Our initial disappointment on the failure of the PIB notwithstanding, we cannot close our eyes to the successful passage of a number of Bills that will impact the sector positively, such as the Sovereign Wealth Fund Bill, the Local Content Act and the Freedom of Information Act (2011).

Coalition however calls on the Seventh National Assembly to pass the PIB as its first legislative achievement. This delay should be utilized as an opportunity to firm up the integrity of the PIB, particularly those provisions relating to making the fiscal regime more open, transparent and internationally competitive, removing discretionary powers of the Minister, criminalising rather than incentivising gas flaring, giving communities real equity as opposed to cost-based handouts, and emplacing people-centred policies for the downstream sector. By so doing the PIB can finally be passed in a form that is in the best interest of the Nigerian people.

We also demand that competence and integrity should be the basis for the confirmation of Mr. President’s nominee for Minister of Petroleum. The Senate must especially subject any individual nominated for re-appointment to a review of their past performance based on clear, transparent yardsticks. As a civil society Coalition, we are ever more determined to work with the National Assembly in its delivery of its legislative and oversight function for petroleum sector reforms to work.

Finally, we call on industry operators to cooperate with the Nigerian government as it attempts to get it right with reforms, in line with growing recognition that extractive resources must first, serve the interest of its real owners, the citizens of host countries, if profits are to be sustainable.

We count on our media friends for their sustained support to the struggle to make Nigeria’s oil and gas resources work for Nigerians.

Thank you very much.

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