The PIB, which has been debated for over a decade, aims to improve transparency, attract investors, stimulate growth and increase government revenues.
PIB seeks to establish a framework for the creation of commercially-oriented and profit-driven petroleum entities, to ensure value addition and internationalisation of the petroleum industry, through the creation of efficient and effective governing institutions with clear and separate roles for the petroleum industry.
The Petroleum Industry Bill is gaining more attention in Nigeria’s National Assembly as the current administration plans to create a powerful energy regulator.
Analysing the PIB, a report by KPMG showed that the bill seeks to establish a framework for the creation of commercially-oriented and profit-driven petroleum entities, to ensure value addition and internationalisation of the petroleum industry, through the creation of efficient and effective governing institutions with clear and separate roles for the petroleum industry.
The bill is the first in a series of long-awaited laws designed to reform the Nigerian oil and gas industry.
Reuters reports that the PIB has been debated for well over a decade, but the current National Assembly has been able to break this contentious legislation into sections to help it pass into law.
The governance part of the bill was passed by both houses of parliament in January 2018 leaving the onus on President Muhammadu Buhari, who is also Nigeria’s oil minister to assent the bill into law.
The PIB aims to improve transparency, attract investors, stimulate growth and increase government revenues.
If you haven't caught up with the Petroleum Industry Governance Bill or PIB, here is a highlight that will bring you up to speed.
This bill will empower the minister for petroleum resources to setting overall policy and direction for the petroleum industry as a whole. The PIB also grants the minister preemptive rights to all petroleum products in the country in the event of a national emergency.
This will also strip the minister of the power to grant, renew, amend, extend or revoke any lease or license issued pursuant to the provisions of the act.
It’s important to note that under the PIB, the petroleum minister cannot create any new entities.
This institution, the National Petroleum Regulatory Commission, will be charged with regulating the entire industry. The NPRC will replace the current Department of Petroleum Resources (DPR), the Petroleum Inspectorate and the Petroleum
Products Pricing Regulatory Agency (PPPRA). Hence, the NPRC shall be responsible for regulating the entire industry. The NPRC functions will cut across the downstream, midstream and upstream sectors.
The Nigeria Petroleum Assets Management Company will be tasked by the PIB withholding and managing the assets and interests of the Government.
The NAPAMC shall be incorporated as a company limited by shares within 6 months from the effective date of the bill.
NAPAMC shall be responsible for managing all assets currently being held by the Nigerian National Petroleum Corporation (NNPC) under the Production
Sharing Contracts (PSCs) and Back-in-right provisions of the Petroleum Act of 1969, as amended.
The shares of NAPAMC shall be held by the Ministry of Petroleum Incorporated (40%), the Ministry of Finance Incorporated (40%) and the Bureau of Public Enterprises (20%).
The NAPAMC will be governed and managed based on the provisions of the Companies and Allied Matters Act (CAMA) and the Code of Corporate Governance issued by the Securities and Exchange Commission.
The PIB will see the creation of ancillary institutions tasked with the provision of specific support services assigned to them.
The ancillary institutions created will be Ministry of Petroleum Incorporated (MOPI), The Nigerian Petroleum Liability Management Company (NAPLMC) and The Petroleum Equalisation Fund (PEF or the Equalisation Fund).
While the NAPLMC will within 12 months from its date of incorporation, ascertain the liabilities of the NNPC and lay out a clear plan and timeline for its settlement after which it shall be liquidated, the PEF will be set up to enhance development of all regions of the federation by ensuring economic balance in the price of petroleum products.