Senate passes first segment of PIB, unbundles NNPC

• Splits oil corporation into NPRC, NPAMC, NPC
• Host community issues yet to be addressed
• Oil workers, APC laud lawmakers

The Senate yesterday passed the Petroleum Industry (Governance) Bill (PIGB) that deals only with the administrative aspect of the proposed law.
The bill that was passed yesterday has nothing to do with the protection of the interest of the oil-producing communities in the Niger Delta. It is a segment of the original Petroleum Industry Bill (PIB) that was sent to the National Assembly some 12 years ago by the presidency.

Oil from the Niger Delta is a major source of revenue for the government. Reforming the industry to stem hostility by host communities and ensure smooth exploration, boost investment and tackle perceived corruption is crucial to generating revenue to fund government programmes and projects designed to develop the country. But the passage of the bill by the Senate after more than a decade of foot-dragging does little to address the fears of host communities, militancy and other forms of disruptive activities in the oil rich Niger Delta cannot be completely ruled out for now.

The Senate had explained that the other segment that would address the contentious host community issues would soon be presented for fresh legislative work.

The original PIB was split into logical parts for easy legislative work to allow the individual parts to be expeditiously considered and passed one after the other, and where amendments are required in the future, the relevant bill can be separately considered.

The 191-page bill passed yesterday, which is made up of 134 clauses, will be referred to the House of Representatives for concurrence before being sent to the presidency for assent.

The Chairman of the Senate Committee on Petroleum (Upstream sector) Tayo Alasoadura, who is also the sponsor of the PIGB, explained the difference between the PIGB that was passed yesterday and the PIB that has been with the National Assembly.

“The current effort at passing the PIB was initiated early in the life of this administration by the leadership of the eighth Senate. The approach advised by leadership was to split the P1B into logical parts. This way, the individual parts can be expeditiously considered and passed one after the other. This was why the Senate decided to consider the first part namely the ‘Petroleum Industry Governance Bill 2017’ first.

“The other parts which shall arrive at the Senate in due course include bills on Upstream Petroleum Licence and Lease Administration; Downstream Oil and Gas Administration; Petroleum Fiscals; Petroleum Revenue Management and Petroleum Host Community Fund (PHCF),” he said.

The main objectives of the bill as passed include the creation of efficient and effective governing institutions with clear and separate roles for the petroleum industry. The PIGB is also intended to facilitate the establishment of a framework for the creation (out of existing government-owned entities) of commercially oriented and profit-driven entities that will ensure value-addition and
internationalisation of the petroleum industry.

The bill is also aimed at the promotion of transparency and accountability in the petroleum industry as well as the creation of a conducive business environment for the operators.

The PIGB splits the Nigeria National Petroleum Corporation (NNPC) into three different entities–Nigeria Petroleum Regulatory Commission (NPRC), National Petroleum Assets Management Company (NPAMC) and Nigeria Petroleum Company (NPC).

While the NPRC will serve as a regulatory entity for the entire petroleum industry (upstream, midstream and downstream), the NPAMC will serve as the counterpart and administrator of production sharing agreements and such other risk-based agreements as the government may decide to conclude.

The bill also envisages NPC to serve as an integrated oil and gas company operating as a fully commercial entity across the value chain.

NPC’s activities will include joint venture operations, operation of the Nigeria Petroleum Development Company (NPDC), frontier exploration and other upstream/service activities, refineries and petrochemicals, downstream activities and sale and disposal of crude oil and products.

Senate President, Bukola Saraki, said the PIGB would produce positive impact on investment both locally and internationally. He also stated that the bill as passed would reduce areas of corruption and inefficiency in the petroleum sector.

Briefing journalists after the session, Alasoadura, said his committee’s report proposed a slim, focused yet robust framework for effective institutional governance of the industry.

Meanwhile, oil workers have warned that the passage of the PIGB 2016 would not deliver the full benefits of the intended reforms in the oil industry if the other aspects of the PIB were also not passed.

The workers under the aegis of Petroleum and Gas Senior Staff Association of Nigeria (PENGASSAN) and Nigeria Union of Petroleum and Natural Gas Workers (NUPENG), however, commend the Senate for the passage of the PIGB.

The Chairman, NUPENG and PENGASSAN Petroleum Industry Bill Committee, Chika Onuegbu said the passage was a great achievement especially, when considered that Nigeria has lost over $235 billion due to its inability to pass the PIB into law since the reform in the industry was kick-started 17 years ago.

Also, the All Progressives Congress (APC) applauded the passage of the bill. In a statement by its National Publicity Secretary, Malam Bolaji Abdullahi, the party described the development as an indication that the National Assembly is diligent and reform-minded, and is committed to fulfilling the promises made to Nigerians.