Finally, National Assembly passes PIB

Oredola Adeola

The joint session of the National Assembly- the Senate and House of Representatives- have finally passed long-awaited oil governance bill, Petroleum Industry Bill (PIB)  into law.

Both Senate President Ahmad Lawan and Speaker, Femi Gbajabiamila, who separately presided over the plenaries at both end on Thursday afternoon, disclosed that the bill was passed into law after the submission of a report by the Joint Committee on Petroleum and Gas that had been processing the bill since October 2020.

At the senate, the bill was passed after a clause by clause consideration of the report of its joint committee on Petroleum (Upstream, Downstream and Gas) on PIB.

Senate President Ahmad Lawan congratulated the lawmakers and said the Ninth National Assembly has achieved one of its fundamental legislative agenda.

The Speaker, Femi Gbajabiamila, on his part commended the lawmakers for “making Nigeria proud”.

Recall that the 8th Assembly led by former Senate President Bukola Saraki passed the bill, but it was rejected by the President Muhammadu Buhari, on the argument that  there were some sections that sought to whittle down the powers of the Minister of Petroleum Resources and vest the same in some technocrats.

It was also reported that the “President equally felt uncomfortable that there were no provisions that covered the fiscal content of the draft law.”

Meanwhile, Ezrel TABIOWO, Special Assistant (Press) to President of the Senate in a statement released to the media disclosed that the bill 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.

According to him, 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.

In his presentation, the lawmaker said that the Petroleum Industry Bill 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.

According to him, 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.

He added that 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.

During a clause-by-clause consideration of the bill, 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.

The Commission would, among others, ensure compliance with applicable national and international petroleum industry policies, standards and practices for upstream petroleum operations; and establish, monitor, regulate and enforce health, safety and environmental measures and standards relating to upstream petroleum operations.

In addition, the upper chamber while adopting the Committee’s recommendation to retain provisions in Clause 29 of the bill, approved the establishment of the Nigerian Midstream and Downstream Petroleum Regulatory Authority.

Clause 29(3) empowers the Authority to be responsible for the technical and commercial regulation of midstream and downstream petroleum operations in the petroleum industry in Nigeria.

Its function include implementing Government policies for midstream and downstream petroleum operations as directed by the Minister; and to promote, establish and develop a positive environment for international and domestic investment in midstream and downstream petroleum operations.

Others are to ensure strict environmental
implementation of policies, laws and regulations for midstream and downstream petroleum operations; and to develop and enforce a framework on tariff and pricing for natural gas and petroleum products.

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 Nigeria National Petroleum Corporation as a limited liability company to be known as NNPC Limited, six months after the commencement of the Act.

Accordingly, the adopted Clause 53 mandates the Minister of Petroleum Resources at the incorporation of NNPC Limited, to 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.

Senators in the majority voted for 3 percent contribution to the host communities, following an amendment to Clause 240(2) by Senator Ahmad Babba Kaita (APC, Katsina North), which was seconded by Ibrahim Gobir (APC, Sokoto East).

The approval of 3 percent for host communities represents an upward review of 0.5 percent from the previous 2.5 percent contribution to the host community development fund.

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, (PDP, Akwa-Ibom North East) to demand an upward review met a brick wall from lawmakers.

Sekibo, in a move to sustain his agitation for an increase in contributions to host communities, relied on Order 73 of the Senate Rule and called for a division.

The Senate Leader, Yahaya Abdullahi (APC, Kebbi North), however, prevailed on Sekibo to withdraw his call for division, and reminded him of the commitment of Senators of the Ninth Assembly in fostering unity while keeping in mind their obligation at all times to protect the national interest.

The Senate Leader’s plea was accompanied by a subtle reaction from the Senate President, Ahmad Lawan, who reminded Sekibo of the overwhelming support demonstrated by lawmakers who had earlier approved that host communities receive remediation and relief from monies accruing from gas flaring in the PIB.

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