Despite assurance by the federal government that there were no irregularities in the ongoing renewal of over 42 oil licences, Peoples Democratic Party (PDP) chieftain, Chief Sunny Onuesoke, has raised the alarm over the ongoing exercise.
Onuesoke, who spoke to journalists in ASABA,Delta state, said even though the petroleum act of 1969, as well as the Petroleum (Drilling & Production) Regulation of 1969 (as amended in 2001) authorised the minister of petroleum resources to renew oil licenses once statutory payments in terms of applicable royalty, concession rentals and fees are paid, he insisted that renewing the licenses without passing the Petroleum Industry Bill (PIB) will make the oil bearing communities feel a sense of neglect and exclusion which remains a major setback for the country.
He argued that with the PIB Bill, fiscal terms in the renewal processes would have been highly improved, while the country would negotiate from a position of strength in an atmosphere that provides confidence for investors.
He lamented that the failure to secure presidential assent on the PIB indicates that significant uncertainty remains on the legal framework governing the petroleum sector in the country.
Onuesoke said although the move to renew the licenses could be in the right direction, he, however, stated that the ongoing renewal exercise could be compromised by lack of transparency, accountability and due process, which were basic barriers inherent in the extant regulations.
According to him, “The chief concern is the need for due process and transparency in the renewal process, most especially providing accessible information and data as to whether and how oil companies that have applied for renewal have met the prescribed legal requirements. “For example, how many oil companies have remitted royalties as at when due, what is their production and compliance track record, and to what extent can the Department of Petroleum Resources grant discounts, rebates and waivers in case of record of non-compliance by an applicant company.”
He pointed out that in order to provide clear guidelines and answers to these recurring questions, it is essential to update and infuse some obsolete provisions of the law with greater transparency and accountability safeguards, adding that international best practices on transparency and accountability would have to be clearly understood and implemented in the oil and gas industry.
Much as multinational companies would appreciate long-term contracts and legislated agreements, he advised the government to sign Memoranda of Understanding (MoUs) pending when the country would come up with a new legislation.