The permeative insecurity in the” country is partly responsible for the shortage of investment in Nigeria’s oil and gas sector, the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), said.
Osifo Festus, President of the union, who said this yesterday, at the grand finale of PENGASSAN security awareness campaign in Abuja, noted that while the three per cent embodied in the Petroleum Industry Bill (PIB) as passed by the National Assembly has generated commotion, it was a good starting point.
He said: “When people speak about percentage, they forget to talk about the basics. The question to ask is: three per cent of what? For example, if it is three percent of profit, it is different from three per cent of the Capital Cost (Capex) and different from Operational Cost (Opex). So, if it is three percent of profit, it means that any year there is no profit, it means there will be no three per cent. But in this case, the National Assembly is talking about three per cent of operating expenditure.
That means the three per cent is relatively constant. So, judging where we are coming from, is the three per cent okay? To me, the National Assembly could have done better to a minimum of five per cent. But looking at where we are coming from, it was zero percent before now, now it is at three per cent. For us in PENGASSAN, three per cent of operating expenditure is a good place to start. Let the bill be signed to end the uncertainty that shrouded the petroleum industry. The host communities can then seek amendment.”
He noted that with about $45 million that the three per cent would result in, efficient utilisation of the fund would register positive impacts in the lives of the Niger Delta region.
Osifo also revealed that while PENGASSAN has never pleaded for the refineries to be sold, it emphasized on adopting the Public-Private Partnership in the running of the nation’s refineries.
“Why is the Federal Government not exploring the possibility of adopting the LNG model where the government holds a minority 49 per cent while the private sector will take 51 per cent? That model has worked very well. PENGASSAN welcomes the rehabilitation of the refineries,” he said.
Osifo, who acknowledged the participation of PENGASSAN in the refurbishment of the refineries as a member of the committee, stated that the fund for the rehabilitation would be in an escrow account and would only be made available to the contractors managing the project.
He explained: “The Afri-Exim Bank is a reputable institution that will not involve itself in any shady deal. The United States of America has the highest stake in the bank. Indeed, I can also confirm that money will be released by milestones. No government official will have access to the fund.”
He also noted that PENGASSAN opted against selling the refineries as scraps, stating that the association insisted that they should be rehabilitated and given to the private sector.
Osifo emphasized that while PENGASSAN was not opposed to deregulation as a policy, it would not back a deregulation policy hinged on importation.
“That is why our position to support the rehabilitation of the refineries is justified. Nigeria will be ripe for a full deregulation when the three refineries in the country are fully rehabilitated and are functioning under the private sector that is efficient. With the refineries coming on stream in the next few months and with the Dangote Refinery coming on board as well, Nigeria will soon be self-sufficient in refined petroleum products,” Osifo said.