The National Assembly has passed the long-awaited Petroleum Industry Bill (PIB).
This followed approval of recommendations of the report of the Senate Joint Committee on Petroleum, (Downstream,) Petroleum (Upstream) and Gas at plenary on Thursday.
Presenting the report, Chairman of the committee, Sen. Mohammmed Sabo (APC-Jigawa), said the bill consisted of five distinct and logically connected chapters.
Sabo listed the chapters to include governance and institutions, administration, host communities development, petroleum industry fiscal framework and miscellaneous provisions, comprising 319 clauses and eight schedules.
He said the committee carried out its assignment effectively and conducted a public hearing to collate inputs from critical stakeholders and the Nigerian people.
Sabo said the committee reviewed the bill and all the memoranda submitted by stakeholders during the public hearing adding that the committee also embarked on on-the-spot assessments of impacted oil exploration communities.
This, he said was to critically examine issues raised by Senators during the second reading of the bill and consulted widely on the justifications for passing the bill into Law.
Sabo said the bill when passed into law “will strengthen accountability and transparency of Nigerian National Petroleum Corporation(NNPC) Ltd as a full-fledged CAMA company under statutory and regulatory oversight with better returns to its shareholders and the Nigerian People’’.
On the Frontier Basins, he said the committee’s recommendation recognised the need for the country to explore and develop the country’s frontier basins.
This, he said was to take advantage of the foreseeable threats to the funding of fossil fuel projects across the world due to speedy shift from fossil fuel-to other alternative energy sources.
“To this end, the committee recommends funding mechanism of 30 per cent of NNPC Ltd profit oil and profit gas as in the production sharing, profit sharing, and risk service contracts to fund exploration of frontier basins,” Sabo said.
On host communities’ development, he said` `to ensure adequate development of the host communities and reduction in the cost of production, the Joint Committee recommends five per cent of the actual annual operating expenditure of the preceding financial year in the upstream petroleum operations affecting the host communities for funding of the Host Communities Trust Fund”.
According to him, in the past 10 years, the country has only attracted less than five per cent of the over $100 billion capital investment inflow into Africa’s oil and gas industry.
He added that all stakeholders were in total support of the passage of the bill as there was no dissenting voice opposing its passage.
He described the bill as laudable and commendable saying that its passage would bring the long awaited change in the oil and gas industry.
However, Sen. Ahmed Baba Kaita (APC-Kastina) moved a motion for the reduction of funding of host community trust fund to 3 per cent as against the 5 per cent earlier recommended by the committee.
The motion which was adopted, resulted to dissenting views by Senators James Manager(PDP-Delta),Bassey Akpan(PDP-Cross-River), George Sekibo(PDP-Rivers) among others.
Sekibo, having cited order 17 of the Senate rule called for division to contest the decision to reduce funding of host community trust fund to 3 per cent.
However, Leader of the Senate, Abdullahi Yahaya (APC- Kebbi) said the call for division was not in the interest of the Senate and the nation, describing the situation as heading for “Armageddon.”
He called for a withdrawal of the call for a division in the Senate, saying that the senate in its two years of existence had worked in a peaceful and a bipartisan manner.
Manager urged the Senate to increase the funding for host community trust fund given the economic contributions of the people of Niger-Delta over the years.
According to him, no amount is too small for the people of the region.
President of Senate, Ahmad Lawan, prevailed on Sen. George Sekibo to rescind his earlier call for division.
“The Senate expects President Muhammadu Buhari to assent to the PIB after harmonisation with the House of Representatives,” he said.
The bill was the first in a series of long awaited petroleum industry laws designed to reform the Nigerian oil and gas industry.
The PIB is an omnibus law, meant to regulate the entire sphere of the industry and repeal all current existing oil and gas legislation.
It struggled to see the light of day in spite of its introduction to the National Assembly over 16 years ago.
Meanwhile, stakeholders in the oil and gas sector on Thursday welcomed the passage of the Petroleum Industry Bill (PIB) by the National Assembly after almost two decades.
The stakeholders in Lagos noted that the passage of the bill was being greeted with caution until its contents are made public.
The stakeholders are: Mr Muda Yusuf, Director General, Lagos State Chamber of Commerce and Industry (LCCI) and Mr Tunji Oyebanji, Chairman, Major Oil Marketers Association of Nigeria (MOMAN).
It also included Mr Chinedu Okoronkwo, President, Independent Petroleum Marketers Association of Nigeria (IPMAN).
The bill, which has five parts, eight schedules and 319 clauses was passed by both the Senate and House of Representatives on Thursday.
The legislation is aimed at “promoting transparency, good governance and accountability in the oil and gas sector.”
Yusuf said the LCCI was pleased with the passage of the bill with the proviso that the concerns raised by stakeholders have been dealt with by the lawmakers in the final draft.
He said: “I think the passage of the PIB is a very good development. It is a major instrument of reforms in the petroleum sector and it has quite a number of significant implications.
“First, it has investment implications. It provides better clarity around the policy regime, the regulatory regime in the petroleum sector.
“We are likely to see more investments because investors confidence is likely to grow with this new policy environment.
The delay in the passage of the bill for many years created a lot of uncertainty around the petroleum industry.
“So, what has happened has a very positive implication for investment.”
Yusuf said the bill would also increase quality job creation as investments in the sector grows.
He said the PIB would also improve tax revenue accruing to government while at the same time transforming Nigeria into a petroleum refining hub.
“It will not only save our foreign exchange but will improve our capacity to export downstream products such as petrochemicals, fertiliser, diesel, fuel and gas-based products.
“This will come from the boost in private investments in the downstream sector.
“However, there is a proviso. I am hoping that all the concerns investors raised during the public hearing were incorporated or taken account of in the passage of this bill.
“Otherwise, we might not achieve the kind of results we want,” Yusuf added.
Also, Oyebanji said the passage of the PIB after several years of delay was a welcome news.
“But I don’t know what has been passed finally. I hope it is something that will move the industry, both upstream, downstream and host communities forward.
“I know what we recommended but I don’t know what has been passed,” he said.
Similarly, Okoronkwo said IPMAN would only respond to the passage of the bill when all the items are made available.
