#NASSPassPIB: Here’s all we know about the Petroleum Industry Bill

Nigeria’s class as an oil-producing country has placed it in the focused eyes of the global audience. From its discovery in 1958, at Oloibiri, hopes of a boom in the economy became real. But, with the discovery came an absolute dependence on one source that geared Nigeria into civil instability, corruption, and environmental degradation.

However, since transitioning to democracy in 1999, the debate on the future of the state-owned oil agency, Nigerian National Petroleum Corporation (NNPC) and its underlying sector have been discussed far too often but never drawing any meaningful conclusions. There have been several proposals (bills) that seek to harmonise oil with other aspects of the economy, create and boost foreign investment for Nigeria and her people and ultimately reduce the environmental damage common to the production and managing of oil and gas.

And, in February 2020, Nigeria’s legislature consulted with the president, Muhammadu Buhari, to draft “from scratch” a bill overhauling and modernising Nigeria’s petroleum sector, birthing the Petroleum Industry Bill which the president has sent to the Senate for consideration and passage.

Among many things proposed by the bill is the following:

Restructuring the NNPC & PPPRAs: The long-awaited bill could reorganise the petroleum industry of Nigeria, and make provision for a possible sale of shares in the NNPC. A new company will be called the Nigerian Petroleum Company (NPC Limited).

Restructuring the NNPC and its sublets may appear very much needed, but what about the people who are the alleged perpetrators of these corrupt practices?

Petroleum Regulatory Commissions and Agencies: The new PIB also proposes the establishment of an agency, Nigerian Upstream Regulatory Commission, NURC,  which will be responsible for the technical and commercial regulation of upstream petroleum operations alone. These developments are laudable as it separates the workload that is burdened by the entirety of the NNPC. The Nigerian Midstream and Downstream Petroleum Regulatory Authority, on the other hand, will focus on stakeholder activities on the lower stream in the petroleum industry. This development also hints on the transparency in the politics of producing, managing and distribution oil and gas.

Increased payment to local communities: The bill also seeks to increase payments to local communities where oil and gas operations are major and also create funds for environmental cleanup. Measures will also be implemented to improve the developments of natural gas and an improved framework for gas delivery and tariffs.

There have been countless accidents caused by unforeseen events and avoidable oversights and the effects of these accidents are mostly felt by regular Nigerians. This bill seeks to prefer solutions to the environmental hazards caused by oil and gas.

Gas monetisation: Another key priority reflected in the new PIB are the measures to be implemented that encourage the monetisation of gas. The bill will encourage companies to explore and produce gas from discoveries, as well as regulate the framework for gas tariffs and delivery.

Reduction of Oil & Gas Royalties: The PIB is also said to attract foreign investors with the establishment of a streamlined reduction of some oil and gas royalties. The objective is to encourage international operators to invest in exploration and production, taking advantage of Nigeria’s extensive petroleum reserves.

Why this matters:

It’s been over 20 years since the discussion of the PIB was made. A prior attempt at passing a bill was in 2008 when former President Umaru Yar’Adua sent it to the National Assembly. The 2008 version of the bill sort to increase transparency in the petroleum sector, namely in the National Nigerian Petroleum Corporation (NNPC), as well as increase the country’s share of revenue in oil projects. It also proposes reforms for private partner corporations that are expected to engage private players in the industry.

Many Nigerians on social media are calling for the quick passing and implementation of the bill with the #NASSPassPIB. Here are a few reactions:

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