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The Nigerian petroleum industry moved a bit towards efficient and effective reformation as the Nigerian senate on Thursday passed the Petroleum Industry Governance Bill (PIGB).
The bill, when concurred to by the House of Representatives and assented to by the president, would institute a new governance structure in the management of the nation’s oil industry assets and its manager, the Nigerian National Petroleum Company (NNPC).
The Senate gave the bill its nod on a day crude oil prices dropped $1.24 a barrel to $52.72 before regaining ground at $53.76 as the Organisation of Petroleum Exporting Countries (OPEC) and non-OPEC members decided to extend cuts in oil output by nine months to March 2018.
The PIGB, which is the first leg of the 17-year-old Petroleum Industry Bill (PIB), which has been broken into five separate bills by the 8th Senate, scraps the NNPC, the Department of Petroleum Resources (DPR), the Petroleum Products and Pricing Regulatory Agency (PPPRA) and several government agencies in the oil sector and now creates three new entities to oversee activities in the sector.
The three new entities are National Petroleum Company (NPC), National Petroleum Assets Management Commission (NPAMC) and Nigeria Petroleum Regulatory Commission (NPRC).
Under the new governance structure, NPC would be an integrated oil and gas company, operating as a fully commercial entity that will run like a private company, while the NPAMC would be a single petroleum regulatory commission, which would focus mainly on regulating the industry.
The bill also saddles the commission with the responsibility for health and safety regulations in the industry, and would collaborate with the Ministry of Environment on environmental issues.
The regulatory commission would be funded through a retention of 10 per cent of the revenue it generates for the government of the federation. The expenditure is however subject to appropriation by the National Assembly.
The NPRC would replace and take over the functions of PPPRA and DPR.
The rite of final passage began when the bill was read the third time and the Committee of the Whole considered the Report of the Committee on Petroleum Upstream, Petroleum Downstream and Gas presented by Senator Donald Alasoadura. It then went through the clause-by-clause ritual with minor amendments before it was passed.
“We made a commitment and it’s being fulfilled,” an elated Senate President Bukola Saraki said, adding: “This bill is not only for Nigerians but for our investors. We are proud of what has been done.”
Saraki’s excitement is understandable given the fact that the PIB had been with the National Assembly since 2000 but had suffered passage delays because of objections and concerns raised by International Oil Companies (IOCs) who felt threatened by the fiscal regimes proposed by the bill.
The 8th Senate, therefore, decided to split the bill into five, isolating the contentious fiscal issues in separate bills, for easier passage.
However, the PIGB still has another hurdle to overcome as the House of Representatives has a different version before it.
House of Representatives said Thursday that it did not yet have a specific timeline for the passage of the bill.
Deputy spokesman of House of Representatives, Hon. Gaza Gbefwi, told reporters that the lower chamber was still carefully considering inputs made by local and international stakeholders during a seminar on the bill last year.
The passage got positive reviews from industry stakeholders Thursday describing it as a welcome development that would create a vibrant industry.
Chief Executive Officer of Seplat Petroleum Development Company (SPDC), Mr. Austin Avuru, said the passage of the bill would set the tone on how the oil and gas industry should operate.
“It is a welcome development. That is the governance bill and it sets the tone on how the industry should operate,” said Avuru, whose company is listed on both the London and Nigerian Stock Exchanges. He expressed the hope that the lawmakers would also pass the second aspect of the bill that governs the fiscal regime before the end of this year.
Avuru urged the Senate and the House of Representatives to harmonise the different versions of the bill before them.
Chief Executive Officer of the International Energy Services, Dr. Diran Fawibe, commended the upper chamber for passing the bill.
He said the passage by the Senate would put pressure on the House of Representatives to pass their own version for both chambers to harmonise the bill for the benefit of Nigeria.
“We have to commend the Senate for taking the right step in the right direction. That is what is expected of the upper chamber because the bill has been languishing in the National Assembly for over 10 years,” he said.
All Progressives Congress (APC) commended the Senate on the passage of the bill.
“We are very excited that the bill was passed today after about 12 years delay. We specially commend the Senate President, Dr. Bukola Saraki, for his focused leadership of the 8th Senate, which has produced several legislative actions that have positively affected the lives of Nigerians, promoted good governance and advanced on-going efforts by the APC-led administration to rebuild the country,” the party said in a statement Thursday by its National Publicity Secretary, Malam Bolaji Abdullahi.
“The passage of the bill is an indication that our federal legislators are diligent and reform-minded, and are committed to fulfilling the promises our party made to Nigerians,” he said, calling on the House of Representatives to follow the example of the Senate by also promptly passing the bill.