36 Gaps to Plug for Optimal Petroleum Reform in Nigeria-NNRC - Africa’s premier report on the oil, gas and energy landscape.

36 Gaps to Plug for Optimal Petroleum Reform in Nigeria-NNRC

There are thirty-six principles to improve, in four departments, for Nigeria’s ongoing petroleum legislation reform to optimally benefit the country, in the opinion of a broad swathe of stakeholders.

These departments are Administration, Fiscal Framework, Host Community (or Local Impacts) and Governance of the Nigerian Oil and Gas Industry.

The principles to improve administration of the industry include: reduced bureaucracy; Elimination of barriers to entry, Efficiency in acreage management; Simplicity and predictability in administration, Reduced cost of doing business, Open access to assets. Transparent licensing process, strict adherence to regulation of competition and anti-trust practices. enhancement of value addition and creation and utility and scrupulous use of the beneficial ownership register.

In terms of the fiscal framework, the stakeholders’ suggestions, under the aegis of the Nigeria Natural Resource Charter (NRC), argue for certainty with respect to the fiscal framework; flexible and responsive fiscal structure; capacity enhancement for administration institutions; streamlining of  fiscal laws for ease of representation; enhancement of ease of doing business;  sunset provisions for incentive programmes; sustainable fiscal competitiveness; transparency of fiscal terms; simplification of  tax administration and establishment of savings mechanism for economic stabilization and future generations.

While the NNRC is an advocacy body “for the effective use of Nigeria’s natural resources for public good”, as it says in its website, its periodic benchmarking report  is a product of research, opinions, analyses and studies of the petroleum sector by a host of civil society groups, academics and academic institutions and petroleum industry resource persons.

Most of the 36 “principles to improve”, to achieve an optimal Petroleum Industry Bill for Nigeria, are published in its 2019 Benchmarking Exercise Report (www.nigerianrc.org/2019-benchmarking-exercise-report), an effort which provides a broad analysis of petroleum sector gaps in Nigeria).

The two other departments of concern to the NNRC are the management of local impacts, otherwise known as host community reforms, and improvement of overall governance in the petroleum sector.

The key issues the NNRC wants addressed about local impacts include: clarity in definition of the intended beneficiaries;  inclusiveness of all interest groups; direct economic benefits and disbursement to Host Communities  to restore sense of ownership; meaningful community participation in project identification and development; transparent and accountable management of resources; adoption of  effective dispute resolution;  adherence to compensation mechanisms or penalties for pollution and decommissioning of abandoned assets and corporate social responsibility.

The overarching governance gaps that need improvement in the sector, in NNRC’s opinion, are: separation of roles of the various actors in the petroleum industry; disclosure to achieve transparency; commercially defined priorities for NOC; consequences/Penalties imposed to encourage legal compliance; merit-based appointments; workable funding mechanism for NOC; reduction of political interference in appointments and strong regulator to ensure sector effectiveness.

The full details of the 36 Gaps and how to plug them are in this link.






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