At last, the Senate on Thursday passed the Petroleum Industry Bill (PIB), putting paid to the controversy that dogged the bill ford over 10 years.
Some of the highlights of the bill is the scraping of the Nigerian National Petroleum Corporation (NNPC) and the merging of the Department of Petroleum Resources (DPR), Petroleum Products Pricing, Regulatory Agency (PPPRA) and the Petroleum Equalisation Fund (PEF) into one agency.
To replace the NNPC are the National Petroleum Company (NPC) and Nigerian Petroleum Assets Management Company (NPAMC), to ensure efficient and effective commercial performance. The new bill also streamlined 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).
Under the envisaged regime, the PRC will also absorb the DPR, PPPRA and the PEF, “to ensure efficient and effective commercial performance in the petroleum sector”
It is also geared toward creating efficient and effective governing institutions with clear and separate roles for the petroleum industry, in addition to establishing a framework for the creation of commercially oriented and profit driven petroleum entities.
This, according to the bill, will ensure value addition and internationalization of the petroleum industry, promote transparency and accountability in the administration of petroleum resources and foster a conducive business environment for petroleum industry operations.
Other highlights of the bill is a provision in section 26(3) where it gives the regulatory commission 10% cost of collection of revenues from other commercial agencies.
“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 provision added.
The Senate deferred work on the Host Community Fund and fiscal aspect of the bill till later date.
The chairman, Senate committee on Petroleum (Upstream), Senator Tayo Alasoadura, said the bill would create more jobs for Nigerians and also foster a conducive business environment for petroleum operations when signed into law.
According to him, the bill promises immense benefits for local operations in the petroleum industry.
Alasoadura added that with the bill, it will 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.
The senator further stated that the PIB will not only enhance exploitation and exploration of petroleum resources in the country, it will also increase power generation and industrial development capacity through abundant domestic gas supply.
The committee chair also said that the law would also create profit-driven oil entities, encourage investment in the nation’s petroleum industry and tremendously increase government’s revenue.
“Government revenue from oil industry will increase. This means more funds in the hands of government to engage in developmental activities. The downstream sector will become fully deregulated. In other words, subsidy will be totally removed”.
The envisaged law, he continued, will also bring about a fully deregulated and liberalized downstream petroleum sector, create efficient and effective regulatory agencies and promote the development of Nigerian local content in the oil industry.
He said, “Besides, emphasis on local content will not only be in the area of skills, but would also be applicable to material sourcing. This means more jobs for Nigerian local contractors, especially those from the oil producing regions”,
“The PIB vests ownership and management of all petroleum resources, offshore or onshore, in the Federal Government of Nigeria, which is to manage them on behalf of all Nigerians.
“This means that irrespective of where the oil is found, it belongs to the government of Nigeria. Of course, equity calls for special consideration for localities where the resources are mined. This is taken care of by the revenue sharing laws and other provisions of this Bill, like the Host Community Fund”.
The lawmaker also stated that since gas is still under-focused in Nigeria and its potential as a source of energy untapped, the PIB seeks to maximize the benefits of the nation’s gas resources.
He added that the PIB will also lead to the establishment of the Nigeria Oil and Gas Investment Pact Scheme (NOGIPS) which will ensure that components of the oil industry equipment can be manufactured locally.
According to him, the envisaged law further makes provision for the protection of health, safety and the environment in petroleum operations.
In his remarks, the Senate President, Dr. Bukola Saraki described the exercise as the first segment in the passage of the bill.
The Senate, he assured, 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.