After a prolonged drama and heightened expectations, the Petroleum Industry Bill, PIB, was eventually passed yesterday. But only a part of it was passed by the Senate, while others will later be presented for consideration.
The bill scaled the third reading following the presentation of a report of the Joint Committee on Petroleum Resources (Upstream, Downstream, Oil and Gas) by Tayo Alasoadura, chairman of the joint committee.
The bill scrapped the Nigerian National Petroleum Corporation, NNPC, and merged the Department of Petroleum Resources, DPR, Petroleum Products Pricing, Regulatory Agency, PPPRA, and the Petroleum Equalisation Fund, PEF, into one agency. NNPC is to be replaced by the National Petroleum Company, NPC, and the Nigerian Petroleum Assets Management Company, NPAMC, to ensure efficient and effective commercial performance. The new bill also streamlines the role of the petroleum minister.
According to the bill, the NPC and the NPAMC will be under the supervision of a newly created Petroleum Regulatory Commission, PRC,.
The PRC “shall be the Industry Regulator and Watchdog, responsible for licensing, monitoring, supervision of petroleum operations, enforcing laws, regulations and standards across the value chain,” the bill added.
The legislation specifies that PRC will also absorb the DPR, PPPRA and the PEF, “to ensure efficient and effective commercial performance in the petroleum sector.”
The bill gives the regulatory commission 10 per cent cost of collection of revenues from other commercial agenciesis in line with a provision in Section 26(3), which states that the Commission shall establish and maintain a fund (‘the Fund’) from which all expenditures incurred by the Commission shall be defrayed. The NPRC is also empowered by the bill to spend ten percent of what it generates for its operations.
The 10 per cent Host Fund, which earlier led to disagreements among various interests in the past and delayed the passage of the bill, was rejected. The Senate deferred work on the Host Community Fund and fiscal aspect of the bill till a later date.
Alasoadura said the bill would create more jobs for Nigerians and foster a conducive business environment for petroleum operations when passed. He said the bill would creare immense benefits for local operations in the petroleum industry and that with it, it would become illegal to employ foreigners for certain skills that can be sourced locally. “And even where such skills are sourced from abroad, due to unavailability locally, it would be mandatory for Nigerians to understudy such an expatriate,” he added.
Bukola Saraki, Senate president, described the bill as the first segment in the passage of the bill. He said the Senate would ensure the opening up of the petroleum sector, and by extension, the economy of the country on a tripod of transparency, efficiency and profitability for both the government and players in the field.
“All our friends and investors in the petroleum sector have been waiting for us to put a framework that will ensure transparency and accountability and create the enabling environment for the petroleum sector. We hope that by what we have done today, we have continued to show commitment and leadership and our contribution to develop this country. We are proud of all we have done today,” said Saraki.
He hopes that with the bill the oil and gas industry will block loopholes, reduce the areas of corruption, inefficiency and Nigerians would be able benefit better from the petroleum sector.
Other tranches of the PIB to be comsidered later are: the Upstream Petroleum Licence and Lease Administration, Downstream Oil and Gas Administration and Petroleum Fiscals. Another tranche to be considered is the Petroleum Revenue Management, including the Petroleum Host Community Fund.They will soon be presented for consideration of the lawmakers.