Osifo demands 51% investor control of NNPCL to curb government interference
By Eberechi Obinagwam
The outgoing President of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Comrade Festus Osifo, has said Nigeria’s failure to attract investment in oil and gas is not because of the Petroleum Industry Act (PIA), but because government keeps changing the rules too soon.
Speaking to Labour Writers on Monday in Lagos during lunch meeting with journalists, Osifo acknowledged that the PIA passed in August 2021 has recorded “relative success.” He cited the creation of Nigeria Upstream Petroleum Regulation Commission (NUPRC), the commercialization of Nigerian National Petroleum Company Limited (NNPCL) which now declares profits, clearer host community funding, and the Frontier Exploration Fund as key gains.
But he warned that recent moves to amend PIA provisions have sent the wrong signal to investors.
Osifo pointed to the transfer of PIA’s fiscal terms to the Nigerian Revenue Service bill in 2023 and Presidential Executive Order 9, which moved the Frontier Exploration Fund.
“If an Executive Order could vary some of the provisions of PIA, then that means tomorrow it could also impact on them,” he said.
“Investors need that certainty. For an investor to know that I am investing $10 million today, these are the taxes I will pay. If I’m doubtful that tomorrow the laws will change, I will be worried.”
He argued that oil and gas investments take decades to mature, so investors need to know the fiscal and regulatory framework will remain stable for at least 5 to 10 years.
“Let us implement this law for at least five years before we start changing it,” Osifo said.
He stated that the “regulatory certainty” is one of the topics that would be tabled at its Energy and Labour Summit scheduled for next week in Abuja.
On the proposed partnership involving NNPC Ltd. and Chinese investors, Osifo said PENGASSAN supports the move, describing it as being in the right direction.
He said the association had consistently advocated the adoption of an equity partnership model similar to that of Nigeria LNG Limited (NLNG), with private investors taking a controlling stake while the government retains a minority interest.
According to him, Chinese companies being brought into the refinery arrangements are expected to become equity partners rather than merely maintenance contractors.
Osifo said PENGASSAN would prefer investors to acquire up to 51 per cent equity while the government retains 49 per cent, arguing that such an arrangement would reduce government interference and ensure that business decisions are driven by commercial considerations.
He said the model would also attract investment, improve the sustainability of the refineries, create jobs and enhance Nigeria’s energy security.
When asked what he wants to be remembered for, Osifo said the current PENGASSAN Central Working Committee (CWC), will be judged by how it protected members’ jobs and improved their pay during a turbulent period of divestments.
“Our objective when we came on board was clear. How do we protect the jobs of our members, and how do we enhance their pay,” he said.
Citing the wave of asset sales in the industry, including ExxonMobil’s joint venture to Seplat, Shell’s joint venture, to Renaissance, Agip’s joint venture to Oando, etc, Osifo said no PENGASSAN member lost their job as a result.
“With the series of divestments that took place in the industry, we were able not just to protect the jobs of our members, but we ensured that the remuneration, the pay of our members was not only transferred, but improved upon,” he said.
According to him, that is a departure from the past when divestments came with job losses and disputes. “Unlike in the past, we had some skirmishes here and there, but we learned from our history,” he added.
Osifo said remuneration across the sector has “been taken to a new height” under this CWC.
“When we look back five, ten years from now, we’ll be happy that we are part of that CWC that brought about that revolution,” he said.
He added that while the CWC prefers members to attest to the gains themselves, “by the special grace of God, the level of remuneration that we have in the industry has been taken to a new height.”
On the association’s relationship with journalists, Osifo acknowledged the critical role played by labour writers, editors, correspondents and advocates in promoting workers’ welfare and shaping society.
He said PENGASSAN recorgnized the difficult environment facing the Nigerian workers, including labour journalists, and expressed confidence that the partnership between the union and the media would grow stronger under its incoming leadership.
