Wednesday, September
30, 2020 / 1207 PM / by CSL Research / Header Image
Credit: Head Topics
News reports say
President Mohammed Buhari has finally sent the Petroleum Industry Bill to the
Senate for consideration and passage. The Bill according to media sources among
other things still proposes the restructuring of the Nigerian National
Petroleum Corporation and the Petroleum Products Pricing Regulatory
Agency. The NNPC will be replaced by a limited liability company, which shall
be called Nigerian Petroleum Company (NPC Limited). The bill also proposes the
establishment of an agency known as the Nigerian Upstream Regulatory Commission
which will be responsible for the technical and commercial regulation of
upstream petroleum operations alone.
The Petroleum Industry Bill (PIB) was first
introduced to the National Assembly in December 2008. A presidential committee
set up in 2007 to look into the oil and gas sector came up with this bill,
which aims to increase transparency at the NNPC and to increase Nigeria's share
of oil revenue. Drafts of the bill, however, became very contentious due to
objections from the international oil companies (IOCs) and the Nigerian
National Petroleum Corporation (NNPC). Consequently, the bill was never passed
into law. Towards the end of 2015, the PIB was amended to speed up its passage
and was broken into different bills, one of which was the PIGB, to address the
governance framework of the oil industry. The Senate President noted that the
plan was to expedite the aspects of the old law that were not controversial
while the controversial areas could be placed on hold. The two houses passed
the PIGB in 2018 but the President did not sign the bill till it ran out
of time.
In all the versions of the Bill, key
themes that have constantly featured include; The ownership and management of petroleum
resources, functions and powers of the Minister of Petroleum, the establishment
of Nigerian Petroleum Regulatory Commission (NPRC) to act as a regulator
for the industry and the restructuring of the
NNPC. According to the Minister of state for Petroleum Resources Timipre Sylva,
this version that has been sent to the National Assembly is a
harmonisation of all the existing versions from 2000 to date with necessary
adjustments to address the concerns raised by the industry players. One of such
concerns was the recommendation of a single regulator for the entire industry
as was stated in the PIGB which has been addressed in the current version of
the bill.
With more than a decade of deliberations and
revisions, it will be a great relief to all stakeholders if this version of the
Bill is finally passed into law. Currently,
Nigeria is said to have one of the least competitive Deepwater fiscal terms in
Africa and is increasingly losing significant amounts of potential investments
to other African countries. Many
stakeholders hold strongly that new investments in the oil sector is
dependent on the passage of the PIB which would take a more holistic approach
in addressing issues around the fiscal terms especially following the passage
of the Deep Offshore and Inland Basin Production Sharing Contracts (amendment)
Bill, 2019 (PSC Amendment Bill).
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