The Petroleum Industry Governance Bill (PIGB) was recently passed in law by the House of Representatives. e360 takes a look at what the development means for the oil industry
The House of Representatives, last Wednesday, after third reading, passed the Petroleum Industry Governance Bill (PIGB), into law. The PIGB is a section the Petroleum Industry Bill (PIB) that has been in the making for years now.
The PIB was first introduced to the parliament by the late President Umaru Musa Yar’Adua in 2008, but years of endless back and forth debates has delayed its passage. The inability of government, host communities, industry operators and other stakeholders to arrive at an acceptable version of the bill stalled its passage, preventing the needed transformation of the industry.
However, on May 27, 2017, the 8th Senate passed the bill and sent it to the lower legislative chamber for concurrence. But this was not before the upper legislative chamber broke the bill into parts to allow easier passage. This gave birth to the Petroleum Host Community Bill, the Petroleum Industry Fiscal Bill, and the Petroleum Industry Governance Bill.
How PIGB will impact the industry
The PIGB is primarily aimed at restructuring and reforming the oil sector by unbundling government controlled Nigerian National Petroleum Corporation (NNPC) and creating an independent agency tasked with effective operationalization and regulations of the sector. Some of the NNPC’s existing subsidiaries will be merged for ease of coordination and supervision.
The bill which will attract investors and open up the sector aims to establish the Nigerian petroleum regulatory commission as a one-stop regulator that will be responsible for licensing, monitoring, supervising petroleum operations, as well as enforcing industry laws, regulations and standards. This means that the bill is institutionalizing processes instead of residing powers in personalities as is the case. That means the president will no longer have the executive power to allocate oil blocks for example.
The PIGB will also restore business confidence and spark new interest in Nigeria’s oil industry and help resolve the issues that led to petrol scarcity, vis-a-vis the poor import planning schedule, corruption, diversion and smuggling as well as the absence of deregulation in the sector.
It would create a conducive business environment for petroleum industry operations by modernizing and overhauling the entire system in line with best practices. The bill will promote openness and transparency in the industry by clarifying the rules, processes, and procedures that govern the Nigerian oil and gas sector. This is expected to significantly reduce corruption in the sector and make it more efficient and productive.
Under the new law, it has been made mandatory that processes which can be made e-operations, must be digitalized. It prevents any agency to continue manual operations of processes that can be digitalized.
With the PIGB now passed by the lower chamber, both chambers of the National Assembly will hold a joint session to further harmonise the version and present the Bill for presidential assent.
Furthermore, e360 learnt that to expedite the process and also ensure quick passage of the Fiscals and Host community bills, both chambers of the national Assembly on PIB have been merged to work together to concurrently pass the bills.
Passage of the remaining sections of the bill will complement the PIGB and holistically reform the Nigerian oil and gas sector. When all is said and done, licensing rounds, contract renewals and investment that have been put on hold in the industry will receive a boost. The passage of all segments of the PIB will no doubt clear uncertainty, attract more investment, eliminate corruption, end gas flaring and environmental degradation in the Niger Delta, stem emerging militancy in the region, grow the country’s hydrocarbon resources and ensure better use of oil revenue for Nigerians