 Welcome back to the Breakfast on PLOS TV Africa. Our first big conversation is about a particular story that has stayed with us for years and years and years and it's about the petroleum industry BOPIB. Finally the Senate passed this after about two hours of deliberations and we've invited energy experts and Mr Balazaka to shed some more light on it. Good morning Mr Zaka. Good morning and thank you for inviting me. Yes so first of all what would you say are the major highlights of this petroleum industry bill just to break that down? Well the first and the important highlight is that it's better late than never. It's better very very very very late than never. I think that is just the summary and another point I want to put across here is this. Any issue that has to do with national interests our political leaders should put their political differences or affiliations apart and make sure national interest is at the front burner. Yes the petroleum industry bill has eventually been or has finally been passed into law. We are waiting for the president to assess it but as we speak today I can tell you it's almost as good as dead on arrival because all the investors have gone. Investors have gone to better safer and probably cheaper heavens. You're talking about a bill that has been there for for the past 10 years or over a digit just ask yourself a very simple question. If you were sent by your sent by your country home you know by your company from overseas to come to Nigeria you know and you come here and you set up a management and you have been waiting for the past 10 years to start working because you were waiting for the Nigerian government will be the ship to put regulatory standards in place. Believe me your if your home country is going to fire you remember that when you go to invest or generally when investors go to invest they either collect loans or they rely on shareholder's funds. If you collect you collected loans expect that you're going to pay what we call constant capital or if you rely on you shareholder's funds you are supposed to be paying the dividend so we shareholder's wait for you for more than 10 years and you tell them we are waiting for the regulatory standards they will fire your management and fire everybody. So it's better late than never that's just the summary. Alright Mr Valazzaq you mentioned that what we're waiting for now is ascent by the president. If you remember also the 8th national assembly headed by Bukalasaraki back then also passed this bill but it wasn't signed by the president and so is there any hope that it might be different now and then also there is a part of it that you know states are 30% I believe for oil exploration in northern Nigeria. Do you think we should still be investing that much in oil exploration in the north seeing where the world is going with regards to clean energy? Yes when you talk about energy if some countries are still using coal and these countries or nations are industrial nations if they are still using coal to drive energy or to generate energy to be honest that Nigeria as a third world country and as a very very poor country is too early for Nigeria to start thinking of doing the way with fossil fuel fossil fuel will be here for some time to come because like I said some countries are still using coal and some of those countries are first I mean are developed nations so to that extent I please I want to just us to disabuse our minds when it comes to to global you know this is not like the case of GSM that we were forced to go into GSM was a technology that came and we needed to get into it but in terms of four percent well yes we will of course we need to reduce pollution we need to be conscious of carbon emission greenhouse gas effects and the rest but but please let's not get into that let's talk about the basic things we need let's be able to even use our natural gas to get ammonia get fertilizer and urea and the rest and and get food let's be able to even have basic electricity if you look at it it is because we cannot afford electricity that's why we go to the petrol station to buy petrol and most of the time we buy this would come and I mean around our generators you know when you look at it from that and we most of these countries you are talking about electricity is not part of their problems you know so to that extent please let's let's let's stop uh ordering ourselves about that dry because Nigeria we cannot even produce this pork of itaya but let me put this problem in those to be let me tell you as I speak to you today when you talk about drilling companies quote me anywhere as I speak to you as of today you don't have up to seven trillion weeks in Nigeria drilling today in the world of Nigeria there was a time when only one company will have more than seven weeks really active drilling there was a time when Nigeria has as a country will have up to 50 sometimes 40 trillion weeks active drilling then the question you ask is where are many of most of these companies they've all gone due to business climate hostilities some of them were waiting for regulatory standards so that they will know they are they are complex social responsibility obligations and some of their specific responsibilities to government like tax obligations where things are not like this so they waited and they are all gone so please to as far as I'm concerned we have delayed so much and something I noticed that was why at the beginning of this discussion I said anytime we want to talk about national issues make national interest come to mind before the present political dispensation came we had a PIP document that was 223 page document that was the main document then and I'm surprised that when you ask me something about our frontier exploration and those were the same thing then we had only three contending issues one was the power of the minister the second one was how to take care of host communities then the third one was frontier exploration but when after the other dispensation left you know and a new government came in the first thing they did was to block down I mean to break down but can I start that PIP and they said it was two voluminous and they started with a two in those three governance bill another bill on fiscal regime another bill on host communities after going around around around for more than six years they have now come back again and are trying to go back probably that same document and are calling it consolidated appeal so when you look at the way we behave in Nigeria honestly to me sometimes when I look at national this democratic dispensation and politics have gone more now to Nigeria than good because after going around around prodigalizing we have now come back and are still talking about the same three contending issues so the question was why were we putting political differences and affiliation and probably sectionalism and sectarianism before before public interest so Mr Zaka I want us to talk extensively on one of those issues you mentioned that's the host community is the clause 240 what really is the bone of contention regarding you know these host communities between the senate and the house God bless you my sister for that question well let me talk about just the three contending issues then the three conducting issues were one the power of the minister you know the second one like I said host community concerns then the third one for their exploration but then what happened was people felt the minister was too powerful and was abusing the power but I keep telling people when you feel a minister is too powerful you cannot enable a national document that has to do with international uh product and international relations you can because of that start thinking of whittling down the powers of the minister because every country you go to the minister for defense is always a powerful minister the minister for finance is always a powerful minister the minister for energy in our own case petroleum this will always be a powerful minister so if you feel the minister was abusing peace for her powers what you needed to do now as we're discussing people was to now start coming home with criteria or standards on how to search for and recruit the right person that will sit on that chair as the petroleum minister you don't look at the human being and you feel because that the human being was looking for showing signs of polyp profligacy where you say you are not happy with him or i will meet him down with power that was where they got it wrong then the second one had to do with host community so when you are talking about host community what they simply needed to have done there was to define what constituted a host community during that time when people had so much interest in the pib the scholars financial institutions and local investors international investors some of us i tell community what was going to even be the likely definition of a host community and how they should be treated if i remember that personally to me i think a host community should be that community that is associated with the physical extraction of oil and dust when you talk about that it simply means even within a local government there will be some communities that you cannot get through oil and gas so to not extend that community does not qualify as a host community but we know that there are so many places and areas even across the country that are impacted by activities of group oil or oil and gas like you have some places that do not have group oil at all or they have depots you have some places that have so many depots landing points for group oil and the experience pollution or they get impacted those kind of communities you can give them their own definition or a host community should be that community where you have physical extraction of oil and gas you know that was when you take an example of a place like Lagos if you can get physical oil and gas in within the kejah in Lagos the kejah access all communities qualify but if Victoria Island does not have group oil and gas in the reservoirs at the stock surface all down there then the kejah may never qualify even though all of them are within the same state so all they needed to do was to come up with the proper definition and come up with how they are going to genuinely assign something or are not something or are pollution something or are preparing something to take care of the the kind of degradation that the communities with the experience in like biodegradation and how to biodemediate them that was the main thing about host community then the other one that we were talking that we were talking about frontier exploration if you look at Nigeria we have what we call potential basins so when you have basins you know you look at all the basins and come up with how to take care of them but the first major prolific basin is the Niger Delta Basin so the Niger Delta Basin we have already established it is prolific we have so much oil cool oil that is even feeding the country today so you will come up with how you will treat them then the next one is recently we have discovered oil around Lagos axis but geologically Lagos belongs to that basin we call that Ume Basin and you can come up with assessment of the quantity so for the basin where we have oil around Lagos it was not prolific as Niger Delta Basin then when you move from the Niger Delta Basin you go towards Anambra Basin there are some states there they are not part of Niger Delta those basins there you know you have cool oil and gas so we call that basin Anambra Basin then as you go towards the north recently oil was discovered around two places which geologically or geographically come then went off into Gungula Basin you will now come up with how you are going to treat them because the quantity of oil and gas and other things are different then we have some basins that we have not discovered cool oil or gas like Sokoto Basin you have the Bida Basin and the Lechard Basin so what you do is depending on what has been discovered you come up with how to treat them all those things were discovered then during I'm sorry I don't want to call the name but I can call the name now during the time of disaster so they came up with that document but before we knew a new government came some politicians came and they began to recognize everything they broke it into four call it PIGB, PI blah blah, PI blah blah and after wasting more than six years in post the document of desirability might be taken now we have we have gone back to where we started so my general interest please should always be at the forefront not politically interest so you don't have any so you don't have any faith in the conversation concerning 3% or 5% for host communities you don't think that you know is in any way going to be useful but isn't it possible that we can help us? Yeah, Mr. Zaka one of the things that the bill hopes to achieve is a transparency and accountability or better transparency and accountability with regards to petroleum sector so don't you think you know there's a possibility that we you know can bring in more investors or newer investors now that the bill is going you know has been passed and hopefully the president will have sent to it this time. You see I am a loyal citizen and I like being honest and straightforward the business climate hostility now is 10 times higher than it was probably 10 years ago if investors have run away now look at the value of even the naira look at look at it is possible with income look at the inflation look at even the trade look at the trade balance today balance and look at the balance of trade today is almost going negative so almost all the indices of the GDP today are heading towards zero so things are lost now so what we are saying is this why did we allow these delays we're not saying investors will not comment that was why I started by saying hey when you are talking about investors they are after better safer and cheaper evils they've been waiting in Nigeria they've been waiting they've been waiting in but some countries have some companies I mean have been thrown into liquidation because they're going to keep waiting they needed to pay interest and cost of capital and if you look at it again internally within Nigeria to some extent now there are so many things that are still not really right we decided you're talking about a country that still cannot even be able to to refine you have a country of 200 million citizens and you want those citizens to go and rely on import as a sensitive material like refined petroleum products where does that in happen you have a country that has more than 100 universities with a premier university that came up in 1948 and refining is elementary and basic chemistry and that country cannot be able to fix our refinance we don't construct new ones let me tell you when we started this PIP there were some East African countries and West African countries that came and copied the initiative from us and they are all the equivalent of PIP has been passed into law and they are attracted and taking over all the the investors so that was why when I said investors have moved to cheaper and safer evils that was what I was talking about they copied from Nigeria from Nigeria's PIP set up their own you know passed theirs into law with attractive conditions and all the investors have gone there so let's be honest to ourselves it's good that it has been passed it's better late than never what I'm telling you I've already said it before as we speak to the quote me as the date of to be there are no up to seven active trillion weeks doesn't that tell you something even the price of Google Earth is rising in the international market quote me between now and December and let us see how many new investors we call so so so so what positives what positives can you point out because like you said better late than never so there has to be something that you can point out to say okay at least we can achieve this in the next few years if this bill is ascended to and fully implemented so so what should Nigerians expect in you know in a positive direction okay the positive is this at least after food dragging food dragging after using political punctuation sectional punctuation punctuation at least at the end of the day the petroleum industry bill has been passed with that is a positive one because at least we are now on the track right we hope and pray that mr president will ascend to it because if mr president does not ascend to it will not become a law so investors the few investors that still have faith in Nigeria are still waiting they will still be hanging and they review their decision so that positivity that has been achieved but at least the legislators is a plus for us we pray that the relationship between the legislative arm and the executive arm this time around will be a positive one and the president will ascend to it and when the president ascend to it one way or the other investors are always waiting to restress reanalyze and recalibrate their business strategies and we may see some of them coming back to Nigeria including local investors okay so basically mr balazica um i'm trying to get exactly where you stand regarding the passage of the pib so if the president ascends to this do you would you say it's a be a guarantee that this would be basically a great policy environment for attracting investors into Nigeria's aura sector sure you know when when you have because now that the president has not ascended to it has not become a law remember when they came and broke down work and colonized the original pib to fall they completed work on the petroleum industry governance bill the president didn't ascend to it so it didn't become a law but you see what makes investors to go into a country person or instability of of of your social activities but the best one is the law once something is a law they will because the law will be binding so if the president ascends to it of course it has become a law they can hold us onto that we can hold them onto that you understand then other things we cannot be looking at other things insecurity is everywhere there is insecurity in Nigeria there is insecurity in Asia in the america so in you those ones you can look into them or the key thing is where you don't have laws that have been concluded it's very risky to go to those places to to carry out businesses because you can come and think reality is probably 10 percent or progress social responsibility which is not in a swing obligation is x the ones who go down you discover it is y what do you do when you discover that maybe you need to pay a given amount as tax you understand but it has not been passing through what if at the point of passing the law the executives say no we will not accept this go and change the tax percentage will this leave it from x to y what will an investor do that's why investors can raise it no matter how bad the law is or how could at least pass it so even when we're talking about the other political dispensation we were not saying in the days of the other regime the law of the PIB will have been fantastic no what we are saying is investors are waiting please tell us how the laws are because when you know the law you can manage and pass I always use an example of your relationship if you talk to a lady a lady can marry an alcoholic a lady can marry somebody that is even more educated but the first thing present what you have present your credentials to that lady or the dark guy the person can look at it and think about how to manage are you people have a peaceful relationship so that's how it is in law you can have laws we may have taxes that are high or whatever investors may still be willing to manage and look at how to survive with you mutually I mean to mutually benefit but as long as that thing has not become a law it can be risky it can destroy them then it can destroy the relationship between you the host country the investors also whether they are local investors or international investors okay okay mr Zakat you're saying first of all we need this to become law and even just as important we need security in the country because no one wants to invest in a place where they are not guaranteed um that the assets are safe so yes we note that and there's a I found a report from the Columbia Center for Sustainable Investment and they basically spoke extensively about the PIB Nigeria they say and I quote that the PIB ultimately fails to account for climate change the PIB fails to accounts for fails to acknowledge the Paris agreement it fails to address the need for diversification to adequately repair Nigeria for the energy transition that is already underway um do you agree with this stance by the CCSI is a yes and a no answer the reason why I'm saying this is to this and this is the reason why I don't like to wear our politicians behavior because that report you are talking is basically talking about our sensibilities all of us know that there are issues with climate change all of us know that there is a need to move away from fossil fuel we all know that is a is is is a kind of global consensus that we need to move away from pollution so to that extent I want to agree that night I mean I do I want to disagree because we as Nigerians we are conscious and we know that sometimes when you when you make some of these laws you can always carry out adjustment the reason why disagree to that to some extent without it is Nigerians themselves know that they are suffering from what we call environmental pollution especially around the Niger Delta area as a result of gas layering because when you have this gas layering it goes into the atmosphere and it mixes I mean it mixes and comes down as what we call acid rain so Nigerians already on their own are suffering from all kinds of breathing and bronchial problems even before talking about climate change so to that extent Nigerians are ready to kick in it is because when you delay and you are not active and you don't come with this product that's why people will take advantage and say that you are not serious but Nigeria honestly is conscious then one of the reasons why I can continue to tell you that Nigeria is conscious but is not ready is because when you look at our gas we've not been able to harness our gas because we don't have enough infrastructures once we have enough infrastructures in place of course gas layering will stop and once you stop gas layering then a greater part of the pollution that normally happens to the atmosphere is eliminated then the other one here will be general social campaign all this vandalism breaking of pipelines where crude oil will spill into the environment and biotecrate the environment destroying what we call fresh water happy bus then destroy streams and also the animals in the river or what you call aquatic animals of that one has to do with sensitization because once you sensitize people to some extent if there is no vandalism then you will not destroy fresh water happy bus if there is no vandalism you will not biotecrate farms if there is no vandalism you are not going to destroy aquatic animals so all this we knew but because we were delaying you see another country also institutions are telling us as if we are melancholy we are a melancholy country so that was why I say it's a yes and a no answer it is it is yes because we delayed but it is no because we were conscious it was something ordinary we would have taken care of all right but lasaka final question from me is going to be on some of the reactions that I've seen and you know I brought this up earlier about the 30 percent which is meant to be used for exploration in the in the north I've seen reactions to this and people saying why are you giving 3 percent to host communities and 30 percent to oil exploration in the north so I want you to go back to that once again and then also on the same thing do you think it's high time that we start to take funds from oil and invest in different other sectors for example information technology it doesn't necessarily have to be in clean energy per se but some of these funds should be able to open up a new space or invest in a new direction for where Nigeria's economy should be in the next you know decade God bless you for that hard question my brother that was what we were supposed to have on right from the time we discovered oil because when you talk about the between is you see everybody running to buy to buy to buy to buy to buy has only one product and that's cool for a land gas so and when when you say you are cool for a land gas whether you are Nigeria or Dubai or Brazil or Saudi Arabia what comes to you is called petrol dollars it is what you do with your petrol dollar that differentiates you between Nigeria and Saudi Arabia between Nigeria and Dubai between Nigeria and Ghana or between Nigeria and China so I want to hear people say cool oil is a cause no the difference between us and countries like Niger Arab Emirates is this in the case of Nigerians who Nigerian leaders some of them that we are called when the petrol dollars come instead of investing diversifying and setting up information industries that you talk about hospitality industry like talk about health health good health good health facilities good education and schools what are many of our leaders where they were using the petrol dollars to go and be buying properties and houses in UK in Asia and the Americas and that's why people like the house how many Germans how many Americans how many Saudi Arabians how many people from the Middle East are wishing coming here to buy houses or coming to our hospitals so why are our own leaders you know siphoning our monies and waiters so you are 100% correct sir the petrol dollar is not a cause it is what we use it to do that makes it a cause and a practical example is the Middle East the oil product they have is one called cool oil so from what they have used the petrol dollars to do if we have leaders that have national interests at heart we can transform Nigeria and develop it even better than the middle east but then we continue to have our leaders who do not put their changing path and we continue to have the wrong managers as our leaders we will never get out of you all right Mr Balazaka thank you very much so it seems that really wraps up and leads to the conversation about anti-corruption in the country energy experts Balazaka thank you very much for joining us on the breakfast this morning thank you for having me all right so moving the conversation now from oil and gas to security we know that sunday boho has been declared a wanted man by the dss let's talk more about that after the break