El-Rufai, others seek reduced powers for President, minister in petroleum sector 2013-07-11 16:36:38 FORMER Minister of the Federal Capital Territory (FCT), Malam Nasir El-Rufai, Thursday canvassed the removal of the powers of the President to grant upstream leases or licences in the petroleum industry. Making a presentation on behalf of the Centre for Africans Progress and Prosperity to members of the House of Representatives Ad-hoc Committee on the Petroleum Industry Bill (PIB), El-Rufai said his aim was to avert the abuse of such privileges for political patronage. According to him, this clause needs to be removed from the bill. The process of leasing and licensing needs to be transparently done and all organs and officials of the state, including the President, need to have confidence in the institutions set up for this purpose to do their job. Including discretionary measures will create disincentive to stakeholders in the sector, as it will reinforce the opaque nature that has characterised the industry so far. And such discretionary measures can be subject to abuse and corruption, both situations the oil and gas policy intended to avoid. To ensure good corporate governance, he said, the Petroleum minister should not be allowed to oversee the activities of the board of the proposed regulatory institution. El-Rufai, who was a member of the Presidential Economic Team responsible for the public sector reform under former President Olusegun Obasanjo, also faulted the placement of the host communities fund under the control of the Petroleum minister. Arguing that the fund would be better under the control of a ministry or any organ of the state responsible for the development of host communities, he said: The proposed regulatory institutions require space to function independently, and the minister should not sit on or chair their boards. In fact, it will violate the principle of good corporate governance for the minister to provide policy oversight over a board where he or she is a member. Furthermore, to have the minister serve as chairperson will defeat the intention of the oil and gas policy that states that, public agencies in the oil and gas sector shall be fully autonomous. According to him, the proposed establishment of the petroleum host communities fund is the most interesting board from the social perspective, but it is the least developed in the bill because, among others, it failed to spell out how the fund would be governed, or how this fund would be allocated. This needs to be addressed, or the fund will be emptied for other (more private) objectives. EL-Rufai said the Downstream Petroleum Regulatory Agency needed to play a strategic role in promoting indigenous oil companies and the manufacture of local inputs.
Posted on: Fri, 12 Jul 2013 10:56:21 +0000
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