{"id":1288,"date":"2013-03-31T22:34:00","date_gmt":"2013-03-31T22:34:00","guid":{"rendered":"http:\/\/disnaija.com\/nigerian-newspapers\/northern-senators-reps-okay-deal-on-pib\/"},"modified":"2013-03-31T22:34:00","modified_gmt":"2013-03-31T22:34:00","slug":"northern-senators-reps-okay-deal-on-pib","status":"publish","type":"post","link":"https:\/\/disnaija.com\/northern-senators-reps-okay-deal-on-pib\/","title":{"rendered":"Northern Senators, Reps okay deal on PIB"},"content":{"rendered":"
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\u2022 Independent agency to explore oil in the North<\/strong><\/p>\n

\u2022 NNPC to lose oil exploration roles<\/strong><\/p>\n

\u2022 Uncertainty trails corporation, Chinese $ 28.5b refinery projects<\/strong><\/p>\n

A MAJOR deal that may pave the way for the passage of the Petroleum Industry Bill (PIB) has been struck in the two chambers of the National Assembly in favour of legislators from the northern part of the country.<\/p>\n

Besides, it was learnt at the weekend that the proposed construction of three refineries in Lagos, Kogi and Bayelsa states by the China State Construction Engineering Corporation (CSCEC) Limited and Nigerian National Petroleum Corporation (NNPC) is facing financial challenges.<\/p>\n

The new PIB deal which drew support from 58 members of the Northern Senators\u2019 Forum and Members of the House of Representatives from the North involved an expansion of the bill to provide for the creation of an independent agency charged with the responsibility of vigorously looking out for petroleum oil in the North and other parts of the country beyond the Niger Delta region.<\/p>\n

A key problem that has been confronting the PIB in the two chambers is the suspicion that the legislative document was scripted in favour of oil-producing regions in the Niger Delta, a belief that had created problems for the bill particularly among senators and members of the House of Representatives from the Northern part of the country.<\/p>\n

The clause that sought to give 10 per cent of profits in oil business to oil-producing communities had equally attracted vehement opposition from Northern legislators.<\/p>\n

A lawmaker from the North Eastern part of the country who has been part of the discussion that led to the brokering of the deal said: \u201cThe crux of the deal is that with increased oil exploration activities in other parts of the country particularly in the North, such largesse for oil-producing communities would attract less criticism since it would eventually be extended to other areas where oil is found.\u201d<\/p>\n

At the end of several meetings and consultations on how the PIB could be saved and passed without hurting feelings, it was resolved among Northern legislators in the two chambers that a separate bill be sponsored to make provision for extensive exploration of oil in the Chad Basin, Bauchi Basin, Sokoto Rima River Basin, Benue River Basin and other parts of the North where petroleum was suspected to be existing in commercial quantity.<\/p>\n

A key member of the Northern Senators\u2019 Forum was tipped to sponsor the Oil Exploration Agency Bill, which would eventually be merged with the PIB that was sent to the Senate by President Goodluck Jonathan.<\/p>\n

The Guardian learnt that the senator tipped to sponsor the Oil Exploration Agency Bill had already submitted a draft copy to the Senate Committee on Rules and Business for it to be properly scheduled for first reading after the Easter break.<\/p>\n

Senate President David Mark, had while inaugurating the Senate joint-committee that would process the bill last week hinted that it would give priority attention to oil exploration in the North.<\/p>\n

\u201cWe also want to explore oil in some other parts of the country and not only in the Niger Delta as we are doing now.<\/p>\n

\u201cThere is no reason why we can\u2019t find oil in the Northern part of the country. The PIB bill is a bill to unite the country and not divide it. It will open up the industry so that we can attract new investors,\u201d Mark stated.<\/p>\n

In the House of Representatives, a Northern legislator had already sponsored a similar bill, which had been consolidated with the PIB and referred to a committee for further legislative work.<\/p>\n

The House version of the Oil Exploration Bill was sponsored by Kaka Kyari Gujbawu (PDP, Bornu State).<\/p>\n

It is titled \u201cA Bill for an Act to establish the National New Frontier Exploration Agency, for the purpose of exploration and production of oil and gas in the frontier of Chad Basin, Dahomey Basin, Imo Basin, Benue Trough, Bauchi Basin and Sokoto Basin and for other matters connected therewith.\u201d<\/p>\n

Gujbawu told The Guardian that the absence of exploration in other parts of the country was making the country to lose a huge revenue, adding that the Nigerian National Petroleum Corporation (NNPC) was already over-loaded with so many responsibilities that it had little time to devote to oil exploration.<\/p>\n

He said: \u201cMy understanding is that in the Chad Basin, the Niger Republic has already explored oil and has started selling oil, the same with Chad Republic. As at last year, from available information, Chad Republic has shipped its 111th lots of crude oil to the market.<\/p>\n

\u201cChinese companies are assisting Chad and Niger and they started exploration activities on their side of the basin in less than a decade ago and they have succeeded. Why have we not succeeded?\u201d<\/p>\n

\u201cIn the Dahomey Basin, today, Ghana has started exploration and is selling crude to the international market. We have parts of the Dahomey basin in Lagos and Ogun states. Nigeria is yet to start exploration on those sides.<\/p>\n

\u201cSo, we feel that the NNPC\u2019s activities in the Niger Delta are so enormous that its hands are full that they do not have much time or resources to commit to the other basins. And people like me and others feel that there is   the need for the government to establish a robust, autonomous oil exploration company to cater for the exploration of oil and gas in the inland basins in the other five zones of the country, hence my bill,\u201d Gujbawu said.<\/p>\n

In a bid to expand production capacities and reduce the nation\u2019s dependence on imported oil and gas products, the NNPC signed a Memorandum of Understanding (MoU) for the construction of three Greenfield refineries and a petrochemical plant estimated to cost $ 28.5 billion by the CSCEC Limited in 2010.<\/p>\n

Three years after the MoU was signed, the project is yet to scale to the next stage, as CSCEC Limited is yet to come up with a concrete plan for the financing of the project.<\/p>\n

The refineries, which were supposed to be located in Lekki Free Trade Zone, Lagos; Bayelsa and Kogi states respectively were expected to refine a total of 750,000 barrels per day of the nation\u2019s crude oil.<\/p>\n

The project was expected to take a minimum of $ 28.5 billion with CSCEC contributing 80 per cent of the $ 11.3 billion equity finance through the Industrial and Commercial of China.<\/p>\n

The Guardian learnt at the weekend that the Chinese firm was not able to get the Federal Government\u2019s commitment to issue a sovereign guarantee on the loan for financing from Industrial and Commercial Bank of China.<\/p>\n

Nigeria\u2019s oil sector is oriented largely towards the export of crude oil, with the country\u2019s refineries hardly in a position to meet the local demand for refined petroleum products.<\/p>\n

A more substantial promise came in 2010, when NNPC and CSCEC signed a Memorandum of Understanding (MoU) for a $ 28.5 billion project to construct three refineries, a well as a petrochemical plants.<\/p>\n

The refineries, which were to be situated in the Lagos Lekki Free Trade Zone, Bayelsa and Kogi states, were expected to begin in 2017 and have a capacity to produce 250,000 bpd each.<\/p>\n

It was learnt that plans were subsequently scaled back, reducing the total to 400,000 bpd, that is 200,000 for Lagos and 100,000 bpd each for the other two.<\/p>\n

The Industrial and Commercial Bank of China was to provide 80 per cent of the $ 11.3 billion equity finance, with NNPC supplying the remainder. Construction was initially set to begin in May 2011, but the date was moved to July 2012.<\/p>\n

A top official of NNPC told The Guardian yesterday that CSCEC was still talking with the corporation on the project.<\/p>\n

According to him, though a MoU was signed between CSCEC and NNPC, an agreement was not reached concerning the financing of the project and they were to furnish the corporation on how to fund it.<\/p>\n

He disclosed that the Chinese firm demanded a sovereign guarantee, which NNPC refused to grant the firm, and that this was one of the reasons for the delay of the project.<\/p>\n

He stated:  \u201cWhen we signed the MoU in 2010, the Chinese firm was to get back to us on how to finance it.  They later came with the demand for sovereign guarantee but we refused to grant their request.  This is because we believe that both parties should be ready to either gain or lose. We told them the Federal Government would provide an enabling environment for them to operate.<\/p>\n

\u201cThey also asked for equity swap, and we were not able to reach a concrete agreement with the Chinese firm.<\/p>\n

\u201cBut NNPC had approached the governors of the states, which the refineries were expected to be sited. The Lagos State governor gave us land to build the refinery. The Bayelsa State government also made land available to us. We could not reach an agreement with the Kogi State government concerning the issue of land.\u201d<\/p>\n<\/p>\n<\/div>\n

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Posted in Nigerian Newspapers. <\/a>A DisNaija.Com<\/a> network.<\/p>\n

Source: Guardian Newspaper<\/p>\n

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