The first segment of the Petroleum Industry Bill (PIB), the Petroleum Industry Governance Bill (PIGB) has just been passed by the 8th Senate, Thursday last week.
This means that the tortuous journey of the emerging law at the National Assembly in the last 17 years has yielded first fruit at the Senate even though more is expected from the lower House on the matter.
Otherwise, the Senate has passed the first part of the PIB which is the Petroleum Industry Governance Bill (PIGB).
Senate President, Dr. Bukola Saraki while announcing the final passage of the Bill said “A Bill for an Act to provide for the governance and institutional framework for petroleum industry and for other related matters 2017, third reading being taken and the Bill is now read for the third time and passed”.
Business Hilights recalls that the Upper Chambers had divided the previously intractable PIB into three parts to make for easier passage.
The PIB is expected amongst other thing; make and create business environment for petroleum operations, enhance the exploration of petroleum resources for the benefit of Nigerians; optimize domestic gas supplies; establish profit driven oil entities; and create efficient and effective regulatory agencies in the petroleum sector.
The Senate made it clear during the final passage, saying the Bill when passed and accented to will also “create efficient and effective governing institutions with clear and separate roles for the petroleum industry”.
The key components of the PIGB are restructuring the NNPC by splitting the assets and liabilities of the corporation into two new commercial entities to be known as the National Petroleum Company (NPC) and the Nigerian Petroleum Asset Management Company (NPAMC).
There is also the establishment of the Nigerian Petroleum Regulatory Commission (NPRC) which will among other things ensure compliance with all applicable laws and regulations governing the petroleum industry.
According to the passed PIGB which is waiting for the corresponding passage at the lower House before the needed Presidential Accent, it will on becoming law, will provide for incorporation of the Nigerian Petroleum Liabilities Management Company (NPLMC) to hold assets including shares in the NPAMC and NPC on behalf of the federal Government.
In addition, the PIGB also establishes Petroleum Equalization Fund (PEF) which is expected to ensure efficient distribution of petroleum products throughout the federation.
However, the federal lawmakers felt that the passage remains a major achievement within the period.
Already, Nigeria Extractive Industries Transparency Initiative (NEITI) the oil industry watchdog has stressed that the PIGB will eliminate the loss of billions of dollars in the country’s oil and gas sector.
In a statement issued in Abuja on Friday by its Director of Communications, Dr. Ogbonnaya Orji, recalled that in 2016, the massive loss of hard currency in the sector forced it to publish a researched policy brief titled, ‘Urgency of a new law for the petroleum sector’.
In the publication, NEITI said Nigeria had so far lost over $200bn as a result of the absence of a governance law.
NEITI recalled that “These lost revenues were as a result of investments withheld or diverted by investors to other (more predictable) jurisdictions. The hedging by investors stems from the expectation that the old rules would no longer apply, but not knowing when the new ones would materialise.
“NEITI’s 2013 audit of the oil and gas sector revealed that a cumulative $10.4bn and N378.7bn were lost as a result of under-remittances, inefficiencies, theft or absence of a clear governance framework for the sector. The cost to the nation in 2013 alone was N1.74tn.
“It is now hoped that with the prospects of a new law coming into place, this huge revenue losses to the nation as a result of governance lapses will be eliminated,” NEITI noted.
One of the members of the Committee that knocked out the Bill said “Now by the governance Bill, we have created entities that are going to manage critical aspects of the oil industry with high level relative independence”.
“The Bill has separated the Minister and give him or her his roles and so many things are now done in a way they will work in synergy for the good of the economy than before all is muddled together with the attendant confusion here and there”.
“Another key point of the new Bill is that the President cannot remove any of the Commissioners without the approval of the National Assembly. So the Bill has created the needed independence on the part of the Commission to regulate the industry,” he said.
However, the two more part of the PIB that is coming onboard as soon as possible include the Petroleum Industry Fiscal Bill and the Host Community Development Bill.
Besides, none of these bills including the recently passed PIGB can become law unless the lower chambers, that House of Representatives do pass the same bills.
