by Stanley Azuakola
The wait is almost over. Years have gone by since the Petroleum Industry Bill (PIB) was first proposed. In fact, the last attempt, introduced in 2008 when Rilwanu Lukman was still Minister of Petroleum, died with the last assembly in 2011. President Jonathan who promised to re-submit that bill when elected has spent 13 months and it hasn’t still been submitted. But at least the end is in sight now.
Last week, the Minister of Petroleum, Diezani Allison-Madueke, submitted the proposed draft bill to the president. She was quite pleased with the work done by the committee which she set up. The committee took six months to do its job, but that was all well and good because according to the minister, the work to revise the former bill was huge and the committee had still managed to produce a perfect document in Nigeria’s interest.
Whether the National Assembly would be pleased however, is a different matter. A copy of the draft bill which has been viewed by some media houses, show that Allison-Madueke included a contentious clause which gives the Petroleum Minister overreaching new supervisory powers over all industry institutions. For instance, she, as minister, will become the chairman of the Petroleum Technology Development Fund (PTDF) if that bill were passed today. That particular clause had been one of the major issues which contributed in stalling the previous bill in the legislature.
Under the new PIB, the NNPC will be renamed as The National Oil Company. However, it would not just be a change in nomenclature, as the National Oil Company is expected to become a full-fledged company that is incorporated with the Corporate Affairs Commission (CAC) three months after the signing of the Act by the President. In three years, the company is expected to become partly listed on the Nigerian Stock Exchange and other foreign exchanges.
The Federal Executive Council is yet to deliberate on the bill. It is expected though that their deliberations and subsequent forwarding to the National Assembly would not take more than two weeks.
The proposed PIB bill contains some good news for oil producing communities. It recommends the creation of the Petroleum Host Communities Fund (PHCF). This fund would be used for mitigating environmental degradation as well as speeding up the development of communities where oil is produced. However, for this benefit, the communities are saddled with the responsibility of ensuring that there’s no vandalism in their areas, because. “where an act of vandalism, sabotage or other civil unrest occurs that causes damage to the upstream facilities allocated to a community, such community shall forfeit its entitlement to the portion of the PHC Fund determined by the inspectorate to be sufficient for repair and remediation of the damage.”
If the new bill is passed, it will mark the end of the era where discretionary oil and gas blocks were awarded, as the bill states clearly that “there shall be no guarantee of discretionary awards.” Operators who flare gas will also face punitive measures. The bill states that “any licensee or lessee who flares or vents gas without the permission of the minister…shall be liable to pay a fine which shall not be less than the value of gas.”
Analysis of the bill continues, and we will bring you more details shortly.