The Petroleum Industry Bill as Focus.

Stakeholder Management Seminar

Bolaji Okusaga

Let’s Think About the 5 Steps for Managing Stakeholders

Step 1 – Identify Stakeholders

Step 2 – Prioritise Stakeholders

Step 3 – Visualise the stakeholder

community

Step 4 – Engage stakeholders: building the relationship

Step 5 – Monitor the

communication

Let’s Use the PIB

The Nigerian Petroleum Industry Bill.• Starting with the need to review current legislative

and policy regimes in the Oil and Gas sector• A policy document was drafted under the Obasanjo

regime led by policy champions like Riliwanu Lukman• A PIB 2008 Bill was sent to the house during the 6th

Assembly but was not passed.• The Bill was reviewed and resent to the 7th Assembly

as PIB 2012 but has not been passed.

Key Targets of the Nigerian Oil and Gas Industry – in the last Decade

200736 billion barrel Reserves and 4 million b/d production • Maximising sector

value and fair share for Nigeria

• Improving Nigerian capacity and Content

2008Develop domestic market and end flaring • Capture economic

value and generate as much revenue from gas as from oil

201040 billion barrel reserves and 4.5 million b/d production by 2010• Emphasize local

content• Bouy the Cabotage

Act and move for passage of the PIB

Current Market Overview and Industry Dynamics

Market Overview

• Upstream Market is Oligopolistic with Shell, Exxon Mobil, Chevron as leaders in an industry that has a lot of marginal hybrid and local players

Industry Dynamics

• Move to strengthen cabotage Act in order to ease the rise of local players in the shipping of Nigeria’s Crude

• Push for stronger local content and technology transfer

• The ongoing debate on the Petroleum Industry Bill with resistance from Multinational Oil Corporations

• Issues of Bunkering and Oil Theft and attendant loss of revenue accruable to government

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Engagement Platform: Policy

•Enterprise Agencies are very critical stakeholders who determine policy direction and implementation

GOVERNMENT

POLICY

PRESIDENCY LEGISLATURE

Senate & House Committees

ENTERPRISE AGENCIES

Nigeria policies and reform initiatives

Promotion Council

JUDICIARY

State Governments

NIGER-DELTA AMNESTY PROGRAMME

MINISTRIES AND PARASTATALS NNPC, NAPIMS,

DPRNSESEC

PARTNERSHIP

Shipping Companies and Oil Trading Concerns

COUNTER-PARTIES

Industry GroupsOPTS, Business Chambers

•This Group aids business success•Bespoke communication for this group will be essential.

SUPPLIERS

Engagement Platform: Partnership

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COMMUNITIES / NGO’S

PRESSURE

MEDIA

Host Communities

Amnesty International NEWS /

POLITICSOIL & GAS

ERA / Friends of the Earth

BUSINESS & ECONOMY

•Media, NGO’s and Community Based Organisations are key influencers who help shape public opinion.

ENVIRONMENT

Engagement Platform: Pressure

Target Audience - Expectations

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Stakeholder Group What Petroleum Industry Policy Champions expects from them

What stakeholder s expect from Petroleum Industry Policy Champions

Government Empathy with the industry’s challenges. Fair hearing in all disagreements with host communities.

Consistent business opportunities, higher profit margins. Quality products to end users at fair market value. Commitment to socio-economic development of Nigeria in general and host communities in particular.

Local Communities Identification with Petroleum Industry Policy Champions and an understanding of its contribution and value to the local community and economy at large. Support in lobbying government and setting agenda within the industry. Understanding that dialogue is the best way to resolve disputes

Socio economic development, employment opportunities, environmental protection

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Stakeholder Group What Petroleum Industry Policy Champions expects from stakeholders

What stakeholders expect from Petroleum Industry Policy Champions

Partners Thorough understanding of the business and the company and commitment to moving Petroleum Industry Policy Champions forward to meet objectives. Loyalty and empathy.

Good corporate governance, consistent business opportunities and higher profit margins

The Media and its institutions Positive news angles, wide coverage and prominence, understanding of company values, invitation to comment on industry and general business news.

Consistency in message content, accessibility, transparency, business patronage, respect, recognition and an understanding of news values. Capacity development and value creation

Regulators Provide incentives, an enabling environment, and a voice in the formulation of legislation affecting the organisation. Entrenchment of sensible legislation that balances diverse interests.

Demonstrate good citizenship by living the business principles, demonstrate responsibility and be actively engaged in capacity building and be supportive of economic reform

Target Audience - Expectations

…Journey to the 2012 Petroleum Industry Bill(PIB)

Special PIB Task Force led by Senator Udo Udoma was set in January 2012 to work with relevant government bodies to produce a new version of the PIB for presentation to the National Assembly.

The PIB Technical Committee was headed by the Director of DPR Osten

Oloronsola.

The Task Force was directed to consult with key stakeholders and to liaise

with the National Assembly to ensure the quick passage of the 2012 PIB

The Special Task Force on PIB submitted its report in June 2012 to

the PresidencyFederal Executive Council of Nigeria

approved the PIB on 11 July 2012

The Presidency upon the approval of the Federal Executive Council

(FEC)forwarded the 2012 PIB to the National Assembly on 18th July 2012

The bill is now before the National Assembly

Overview of the 2012 PIB

Is a 223 page document ;comprises 363 sections divided into 9 parts with 5 schedules. Provides for the legal, fiscal and regulatory framework for the oil and gas industry. Note that some sections of the PIB were not correctly numbered. E.g. no section 119

Create two regulatory entities. The Upstream Petroleum Inspectorate and the Downstream Petroleum Regulatory Agency Provides for Host Community Fund ; Upholds in its entirety the Nigerian Oil and Gas Industry Content Development Act 2010

Split the NNPC into three entities; two incorporated, one not.

Introduces new fiscal framework for the oil and gas industry; NHC, CIT and Royalties

No mention of refining or refining operations other than in Section 220 (2)(b) which mentions that regulations may be made for these operations. Meanwhile there is a refinery Bill in the senate.

Its outcome will determine the future of the Nigerian oil and gas industry , as well as the Nigerian workers. Most influential and important legislation after the Nigerian constitution

Group One – Group Discussion

• Identify Stakeholders

• Introduction to the PIB case study• Stakeholder Identification• Exercise 1: Identify stakeholders needed for

the passage of the PIB 2012• Explain the role of each Stakeholder• Discussion

Group Two – Group Discussion

• Prioritise Stakeholders• Stakeholder Prioritisation – Prioritise the

Stakeholders needed to pass the PIB 2012• Exercise 2: The most important stakeholders

based on their roles and impact• Discussion

Group Three – Group Discussion

• Engage stakeholders: building the relationship• Stakeholder engagement towards the passage

of the PIB 2012• Exercise 3: Define stakeholder support and

receptiveness

Let’s get to work.