Features: The Positive impact of PIGB on the Oil and Gas industry in Nigeria

The Senate passed the much awaited Petroleum Industry Bill, PIB, almost 17 years after the process started. With the passage of the bill, which is tagged, Petroleum Industry Governance Bill, PIGB, a new regulatory agency, known as Nigeria Petroleum Regulatory Commission, NPRC, would take over the functions of Petroleum Inspectorate, PI, the Department of Petroleum Resources , DPR, and the Petroleum Products Pricing Regulatory Agency, PPPRA.
The new commission, among other things, will also administer and enforce policies, laws and regulations relating to all aspects of petroleum operations which are assigned to it under the provisions of the Act. When the bill is signed into law, two new companies, Nigeria Petroleum Assets Management Company and National Petroleum Company, would be established with certain assets and liabilities of Nigerian National Petroleum Corporation, NNPC, while the National Petroleum Company, for instance, would operate as a full independent commercial entity.
According to the Senate, the move is geared towards unbundling the NNPC and the petroleum industry. In the PIGB, the Ministry of Petroleum Resources would be renamed Ministry of Petroleum Incorporated. In the new bill, upon the recommendations of the new commission, Minister of Petroleum Resources can grant, amend, renew, extend or revoke any licence or lease required for petroleum or production, pursuant to the provisions of the Act or any other enactment.
The bill also proposed that when the commission is created, it shall be vested with all assets, funds, resources and other movable and immovable property, which immediately before the commencement of operation of the new commission, were held by the PI, DPR and PPPRA. In the bill, more powers will be vested on the commission, as the President or the Minister of Petroleum Resources, who hitherto had such powers, would no longer have same. The bill has significantly reduced the powers of the President and the Minister of Petroleum Resources in exercising control over the oil and gas sector. The newly passed bill would help promote transparency and accountability in the administration of petroleum resources of Nigeria as well as foster a conducive business environment for petroleum industry operations. The Senate is expected to pass two more bills to further regulate the oil and gas sector. Already, the Host Communities’ Bill, which has passed first reading in the Senate, is expected to be passed into law before the end of 2017.
Thereafter, the Senate will also commence moves to pass another tranche of the bill that would deal with the fiscal aspect of the oil and gas sector.
Senate President, Bukola Saraki, who presided over plenary, noted that the Bill was not only for Nigerians but also investors. He said with the passage of bill, corrupt practices in the oil and gas sector would be reduced to the barest minimum, adding that the inefficiency currently associated with the sector would also be done away with.
“The bill will stimulate the oil and gas industry; it will reduce the area of corruption and inefficiency in the oil and gas sector,” he said.
The bill will now be sent to the House of Representatives for concurrence before being transmitted to the President for assent. NUPENG, PENGASSAN laud Senate Reacting to the passage of the bill, Nigeria Union of Petroleum and Natural Gas Workers, NUPENG, and Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, commended the 8th Senate and its Joint Committee on the Petroleum Industry Governance Bill, PIGB, for the passage of PIGB 2016. NUPENG and PENGASSAN, however, pleaded with the Senate to step up the passage of other aspects of the PIB. The two unions said: “This is, indeed, a milestone achievement, especially when you consider that the PIGB is not an Executive Bill. ‘’We, therefore, look forward to the concurrent passage of the PIGB into law by the Federal House of Representatives and also eventual accent by the President of Nigeria. “We, however, note that the PIGB only deals with one aspect of the PIB, that is the governance and institutional framework of the Nigerian Petroleum industry. We look forward to the passage of the other aspect of the PIB such as the Petroleum Fiscal Framework Bill; Petroleum Industry Downstream Administration Bill; Petroleum Industry Revenue Management Framework Bill and the Petroleum Host Community Bill. “For instance, we know that there is no mention of the Petroleum Host Community Fund in the PIGB and we know that one of the major challenges facing the industry is host community and Niger Delta issues.” We’ll soon pass PIB —Reps Meanwhile, Deputy spokesman, House of Representatives, Johnathan Gaza Gbewfi, said the House will soon follow suit like the Senate in passing the PIB.
Gbewfi, who spoke at the House’s weekly briefing noted: ”You all know that we passed this same bill in the 7th House and I’m assuring you that we’ve gone very far on the bill and very soon it’ll be passed. “To really give the bill its rightful place, we organised an international workshop where we gathered enough input to make the law have international standard that it deserves.”
It will be recalled that the bill has gone through 5 sessions of the National Assembly, beginning from the 4th Assembly which was inaugurated in 1999 under President Olusegun Obasanjo.
The Senate on Thursday May 25,2017 passed the much anticipated Petroleum Industry Bill (PIB) after 17 years of consideration: The bill has been passed as the Petroleum Industry Governance Bill (PIGB).
An attempt to pass the bill by the 7th Senate presided over by Sen. David Mark was met with a lot of controversy and a rejection of certain clauses in the bill, forcing the Senate then to drop the bill at the point of passage.
However, the passage of the Bill by the 8th Senate followed the submission of a report by Joint Committee on Gas: Petroleum (Upstream) and Petroleum (Downstream) chaired by Sen. Tayo Alasoadura.
After a clause-by-clause consideration, with few amendments, the Senate approved the bill which promises to change the way things are done in the oil sector.
The bill seeks to open up the sector to more and better business opportunities, make the sector more transparent, and ensure better accountability of revenue derived from oil.
If the bill scales through assent by the President, it would restructure the Nigeria National Petroleum Cooperation, Department for Petroleum Resources and also create new agencies with more responsibilities.
The President of the Senate, Bukola Sarakim in his remark congratulated members of the upper legislative chamber for a job well done.
“I congratulate the 8th Senate with the passage of this landmark bill which has not been passed for many years,” he said.
Recall that after inauguration of the 8th Senate in 2015, the President of the Senate had promised to, among other things, deliver the Petroleum Industry Bill as well as make laws that would better the lot of Nigerian businesses.
The PIB is one of 11 Bills which the Senate promised to pass to steer Nigeria out of recession.