By Gift Eguavoen
The Senate on Thursday recorded a major feat with the passage of the complete version of the Petroleum Industry Bill (PIB) which has been in the making for about twenty years.
The bill, which is a proposed legislation to reform the Nigerian oil and gas sector, was passed after a clause-by-clause consideration of a report by the Joint Committee on Downstream Petroleum Sector, Petroleum Resources (Upstream) and Gas on the PIB.
The Chairman of the Joint Committee, Sabo Muhammed Nakudu, delivered a presentation on the Committee’s report moments before the upper chamber held a closed session to receive briefing by the Petroleum Minister, Timipre Sylva, and the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari.
Extractive 360 reports that the PIB consists of five distinct chapters which include Governance and Institutions; Administration; Host Communities Development; Petroleum Industry Fiscal Framework; and Miscellaneous Provisions comprising 319 clauses and 8 schedules.
The bill’s passage and eventual assent into law would strengthen accountability and transparency of NNPC limited as a full-fledged company under statutory/regulatory oversight with better returns to its shareholders – the Nigerian people.
According to Nakudu, the Joint Committee’s recommendation on Frontier Basins recognized the need for Nigeria to explore and develop the country’s frontier basins to take advantage of the foreseeable threats to the funding of fossil fuel projects across the world due to speedy shift to alternative energy sources.
The upper chamber approved the funding mechanism of thirty percent of NNPC limited’s oil and gas profit in the production sharing, profit sharing, and risk service contracts to fund exploration of frontier basins.
It also approved Clause 4 of the bill which seeks the establishment of the Nigerian Upstream Regulatory Commission to provide technical regulatory functions that would enforce, administer and implement laws, regulations and policies relating to upstream petroleum operations. It also retained provisions in Clause 29 of the bill, approving the establishment of the Nigerian Midstream and Downstream Petroleum Regulatory Authority.
The recommendation of the Joint Committee was amended in Clause 52(7d) to ensure that all monies received from gas flaring be channeled for the purpose of environmental remediation and relief of the host communities as against the development of infrastructure in midstream gas operations.
The upper chamber, however, retained the recommendation of the Joint Committee in Clause 53 which empowers the Minister of Petroleum Resources to incorporate the NNPC as a limited liability company to be known as NNPC Limited, six months after the commencement of the Act. He shall however, consult with the Minister of Finance to determine the number and nominal value of the shares to be allotted, which would form the initial paid-up share capital of NNPC Limited.
Consequently, the Senate approved ownership of all shares in NNPC Limited to be vested in the Government at incorporation and held by the Ministry of Finance Incorporated on behalf of the Government.
The upper chamber, however, reviewed downward the Joint Committee’s recommendation that 5 percent be paid as contribution to the host community development fund, with majority voting for 3 percent.
Efforts by the Deputy Senate President, Ovie Omo-Agege (APC, Delta Central), Senators James Manager (PDP, Delta South), George Thompson Sekibo (PDP, Rivers East), and Albert Bassey Akpan (PDP, Akwa-Ibom North East) to demand an upward review met a brick wall from lawmakers, according to a statement by Ezrel Tabiowo, Special Assistant (Press) to the Senate President.
The Senate President, Ahmad Lawan, in his remarks after the eventual passage of the PIB, congratulated the Ninth Assembly and Joint Committee for the “tremendous achievement of passing the long awaited PIB.”
“We promised Nigerians that we will do our best to pass the PIB that has defied passage or defied assent. At least, the demons are being defeated in this chamber,” Lawan said, while appealing to President Muhammadu Buhari to give expeditious assent to the bill when it is eventually forwarded to him by the National Assembly.
The Eight Assembly had in the twilight of the last administration passed the PIB, but it failed to get the assent of the President Buhari.
Reacting to the development, the Centre for Transparency Advocacy (CTA) congratulated Nigerians especially, the civil society, media, host communities and donor agencies that gave their supports leading to the passage of the bill.
“Generally, we are happy that sections, 83, 104 to 108 of the new Bill (the House of Representatives version) makes provisions for contract transparency, disclosure, operational cost for host communities and outlaws gas flaring. However, it did not take cognizance of gender, while host communities are still held responsible for any kind of sabotage to oil facilities,” said Faith Nwadishi, Executive Director of CTA.
She urged the leadership of both arms of the National Assembly to quickly harmonize their versions of the passed Bill and send same to the President for his assent, while also charging the President to assent to the bill as soon as it comes his desk in fulfillment of his electoral promise to Nigerians.