by Mark Amaza

Since the start of the Fourth Republic, no bill has been contentious as the Petroleum Industry Bill which was first introduced to the National Assembly in 2000.

It was introduced with the aim of being the legal instrument with which the entire Nigerian oil and gas industry will be reformed; from awarding of oil blocks to tax regimes to the Nigerian National Petroleum Corporation and regulatory agencies within the industry.

Considering the fact that Nigeria’s economic lifeline (and some people say its existence as well) is tightly tied to its oil wealth and management, it was bound to be a struggle to have the bill passed. It went through all eight assemblies and plenty controversies before being finally passed yesterday by the Senate.

The effects of this was it prevented investments into the sector as investors were uncertain of the condition of their investments. It is estimated that Nigeria lost $21bn in 2015 and $200m between the second and third quarters of 2016 in oil and gas investments with the uncertainty surrounding the PIB being one of the main reasons.

To make its passing faster, the Federal Government in December 2015 announced it was splitting up the bill into 5 smaller bills and focusing on the non-controversial aspects such as the fiscal and regulatory measures, in the hope that passing them will increase investments.

The key aspects of the Petroleum Industry Governance Bill (PIGB) are that it scraps the Nigerian National Petroleum Corporation (NNPC), the Department for Petroleum Resources and the Petroleum Products Pricing Regulatory Agency (PPPRA).

In their place, there will be a National Petroleum Company (NPC), a fully-integrated oil and gas company operating as a fully commercial entity and run like a private company; a National Petroleum Assets Management Commission (NPAMC) to regulate the industry and to be funded through the retention of 10% of its revenues; and a Nigeria Petroleum Regulatory Commission (NPRC) to take over the functions of the DPR and PPPRA.

Another important provision of the bill is taking away the discretionary powers of the Minister of Petroleum to award licenses for petroleum exploration or production. This power has been the reason for corruption experienced in securing oil block licenses.

Under the PIGB, the NPRC will be in charge of “conducting bid rounds or other processes for the award of any license or lease required for oil exploration or production.”

The commission will also be responsible for health and safety issues in the industry while collaborating with the Ministry of Environment on environmental issues.

However, the bill still has to pass the House of Representatives, the two versions harmonised if there are any differences, before finally being sent to the president for his assent.

Nonetheless, it is a landmark step to moving past the bill and getting our oil and gas industry kicking again.