The National Assembly has finally passed the Petroleum Industry Bill (PIB), 2021. The key objective of the PIB is to overhaul and transform the Nigerian oil gas industry. The Bill is now awaiting the assent by the President. However, the key question that is being asked is: will the PIB be the game-changer for the industry at a time when major oil producers are seeking to transition to clean energy? Only time will tell.
The oil and gas industry has a significant impact on the Nigeria's economy. Though the industry contributes less than 10% to the country's gross domestic product, it contributes about 90% of the foreign exchange earnings and 60% of total income. Consequently, any adverse change in the industry will have a big and long-term impact on government finances. This is the reason why successive governments have remained focused on the sector despite various discussions on diversifying the economy.
For the past 20 years, there have been various attempts at reforming the industry. However, none of these efforts has yielded any tangible result until the introduction of the Petroleum Industry Bill (PIB) 2020. Prior to now, there were various iterations of the PIB. The PIB started as an omnibus bill and was later divided into 4 separate bills before emerging in 2020 as a consolidated bill.
It is a fact that previous attempts at passing the PIB in 2009, 2012 and 2018 failed because of factors such as lack of ownership, misalignment of interests between the National Assembly and the Executive, perceived erosion of ministerial powers, stiff opposition by the petroleum host communities and push back by investors on the perceived uncompetitive provisions in those versions of the bill. The PIB 2021 is set to address all the issues to the extent possible. It should be noted that the present administration and the 9th National Assembly have demonstrated an unparalleled commitment to passing the bill. They understand the importance of passing a bill that is competitive, balanced, fair, reasonable and realistic.
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