• Thursday, March 28, 2024
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BusinessDay

Now that 9th National Assembly has passed PIB, what next?

National Assembly

Obviously, July 1, 2021 will go down in history as the day the jinx of the Petroleum Industry Bill (PIB) was broken with the passage of the bill by the Senate and House of Representatives. Irrespective of its shortfalls, passing the bill at a time the oil industry globally is experiencing some level of instability is something commendable.

Despite the delay and inadequacies associated with its passage, stakeholders in the oil industry have expressed optimism on the piece of legislation that, “it is better late than never.” Notwithstanding the length of time it took to get the bill passed, many are still happy with the lawmakers for taking the bold step.

Read Also: The Petroleum Industry Bill and the quest for a new Nigeria

One of the stakeholders is the Nigeria Extractive Industries Transparency Initiative (NEITI). The agency has hailed the National Assembly for passing the bill, describing the move as bold, courageous and progressive.

In a statement, the Executive Secretary of NEITI, Orji Ogbonnaya Orji said, “NEITI as an agency set up to enthrone transparency and accountability in the management of extractive industries in Nigeria has demonstrated genuine and legitimate interest in the PIB from the onset. NEITI’s interest is in view of the urgency and strategic importance of a new law to replace the existing archaic legislations that have aided huge revenue losses, impeded transparency, accountability and investment opportunities in the nation’s oil and gas industry.”

There is no gainsaying that the delay in passing the piece of legislation has indeed cost the country not just a fortune in terms of foreign direct investment, but also impeded the transparency and accountability needed in such an industry.

Now Nigerians can heave a sigh of relief that after 20 years of moving forth and back, the obsolete Petroleum Act of 1969 is on the verge of giving way for the PIB.

In fact, if there is one legacy the 9th Senate and indeed the National Assembly would be leaving behind after it has long gone, it is the courage to pass the PIB despite vested interests and party politics.

While the Senate gave host communities only three percent equity holding in Host Communities Trust Fund, the House of Representatives, on its part, granted host communities five percent equity stake for host communities in the Host Communities Trust Fund as against the agitation for 10 percent by host communities.

The original bill brought to the Senate by the executive was 2.5 percent for funding of the Host Communities Trust Fund, but the Senate committee moved it to five percent. At the end of the day, however, it approved only three percent.

Another controversial area both chambers differ was the fund exploration of frontier basins, which the Senate left at 30 percent, stakeholders in the Niger Delta had demanded that it should be reduced to 10 percent.

With this development, 30 percent of profits accruing from oil and gas operations by the NNPC is now to be set aside for exploration of oil in the frontier basin. It means that all exploration of frontier basins shall fall under the purview of the Upstream Regulatory Commission.

No doubt, the PIB is one bill that would keep generating heated debates in the days and months to come.

Already, the National President, Host Communities of Nigeria Producing Oil and Gas, Benjamin Tamanarebi said it was insulting for the Senate and House of Representatives to cede only three and five percent equity shareholding respectively to the oil and gas producing communities in the PIB recently passed.

Now that the bill has been passed, Nigerians are asking what next? Does the passage automatically amount to investment opportunities and growth in the oil sector? Do we start seeing an efficient NNPC where accountability and transparency becomes the order the order of the day?

Essentially, before the country can start reaping the benefits of this passage, the conference committee set up by the Senate and House of Representatives must sit to harmonise some of the grey areas. For instance, the Host Communities Trust Fund must be harmonised before the document could be sent to the president for his signature.

On Tuesday last week, the Senate named a seven-member committee to harmonise the different versions of the bill passed by both chambers of the National Assembly. BusinessDay sought the views of the Senate spokesman, Ajibola Bashiru on how far the conference committee had gone and when they are likely to report back. He simply said, “I am not a member of the committee and they have not reported back to the Senate.”

At the moment, expectations are high and it is only pertinent that President Muhammadu Buhari, who also doubles as the Minister of Petroleum Resources, should ensure that these reforms see the light of the day by signing the bill post-haste as soon as it is transmitted to him. Experts and other stakeholders in the industry have expressed optimism that reforms needed to grow the sector would happen any time soon if well implemented.

A copy of the report ad-hoc committee on PIB (House of Reps) showed that the provisions for the establishment of the Nigerian Upstream Regulatory Commission and the Nigerian Midstream and Downstream Petroleum Regulatory Authority were retained.

The Upstream Regulatory Commission will assume the upstream powers of the Department of Petroleum Resources, including the technical and commercial regulations of the upstream petroleum operations.

The Midstream and Downstream Regulatory Authority will assume also some of the powers of the DPR and all of the powers of the Petroleum Product Pricing Regulatory Agency, PPPRA.

The Authority shall have the power to regulate midstream and downstream petroleum operations, including technical, operational and commercial activities.

Speaking on the proposals for the two regulators in Abuja, Wumi Iledare said although the PIB as currently drafted is not a perfect bill, it is important to have a good bill than not have a bill at all.

“This bill is not perfect but it is good enough for us to start after 20 years of attempting. There are three important chapters and you all know about it.

“The Chapter on Governance is to help us solve this amorphous governance process that we have. Now that bill is going to separate policy from regulations and from commercial.

“The only bone of contention that is still there is the reason why the PIB was not signed originally, which there are some who want two regulatory institutions and there are some of us who think that one regulatory agency is enough for what we have in Nigeria.

“Especially when things are evolving and innovation is important. The only caveat is the Ministry of Petroleum, I don’t think the technical capability is there to allow for continuity.”

Expectedly, when signed into law by President Muhammadu Buhari, an oil expert, who pleaded anonymity, said the PIB would create an efficient industry with independent governing bodies.

According to him, “The PIB will present significant investment opportunities for both regional and international stakeholders. At a time when the global energy sector is particularly competitive for foreign capital, the passing of the PIB serves to elevate Nigeria as an energy leader on the global stage and the upcoming African Energy Week (AEW) 2021 taking place in Cape Town on the 9th-12th of November will only enhance this trend.

“In addition, the bill would attract the needed investments as the direction which the government has decided to follow has become clear.”

After the bill had been read for the third time and passed, the President of the Senate, Ahmad Lawan expressed optimism that it would usher in the needed environment for foreign investors to come into Nigeria. He said they are now expecting the president to sign it into law without further delay.

“We are expecting presidential signature on the bill. We expect the president to sign it into law without further delay. We should not waste further time in signing the bill into law,” Lawan stressed.

The lawmakers will be going on its long recess in about two weeks time and one paramount thing in their minds is to harmonise the various versions of the PIB and transmit to the president for signing. But signing the bill with the urgency it deserves is what Nigeria and indeed Nigerians are now anxiously waiting for. The ball is now in the court of President Buhari.