Finally, Reps set to consider Petroleum Industry Governance bill

Barring last minute change, the House of Representatives will today consider the Petroleum Industry Governance bill, a legislative framework, which seeks to unbundle the Nigerian National Petroleum Corporation (NNPC).
The consideration is coming two weeks after the Senate passed a similar bill into law.
The legislative framework is titled, “the bill and memorandum on legal and regulatory framework, institutions and regulatory authorities for the Nigerian Petroleum Industry, to establish guidelines for the operation of the upstream and downstream sectors and for purposes connected with the same,” and was sponsored by Daniel Reyenieju.
The bill was based on the report of the Oil and Gas Sector Reform Implementation Committee (OGIC), set up by Federal Government in 2000 to carry out comprehensive reform of the nation’s oil and gas industry.
Section 143 to 170 deals with establishment of National Petroleum Assets Management Corporation; Section 182 to 192 deals with establishment to National Gas Company, which shall be listed as a public limited liability company on the Nigerian Stock Exchange with 49 percent of its shares available for the public, while certain employees, assets and liabilities of NNPC will be transferred to it.
Likewise, Section 193 deals with Frontier Exploration Services; the bill also seeks to establish National Oil Company as an offshoot of NNPC, which shall be listed on the Nigerian Stock Exchange with up to 30 percent of its shares to be made available for the public to subscribe.
“It will be fully profit-driven, which makes it not to be subjected to the provisions of the Fiscal Responsibility Act, 2007 and Public Procurement Act, 2007,” the proponent of the bill explained.
Also, Section 73 to 79 of the bill seeks to reposition Petroleum Technology Development Fund (PTDF) to perform core role of developing and training of manpower necessary to service the petroleum industry, through provision of scholarships, research and other supports.
Section 100 to 115 dedicated to Petroleum Equalisation Fund will be responsible for accounting for any net surplus revenue recovered from petroleum product marketing companies. The PEF will continue to exist under the regime PIB seeks to introduce until petroleum product markets have been fully and effectively deregulated.
In order to end the age-long restiveness in the oil communities across the Niger Delta region, Section 116 to 142 of the bill provides for the establishment of Petroleum Host Community Fund (PHCF) through which oil and gas producing companies shall contribute an amount into for transfer directly to the incorporated trustees of the host communities.
The funds will be used for the development of the economic and social infrastructure of these communities.
In principle, the PHCF seeks to promote peace in the oil-producing region, as communities will be benefiting from production.
“Increase in production would mean an increase in funds for the PHCF, which would be used to develop the communities. This will create a relationship and an understanding between companies and locals as the profit or the loss of the oil companies will affect the development of their communities, so arguably the locals will be on their best behaviour to ensure more profits for the oil companies.
“In essence, the PHCF may increase government take, develop infrastructure, reduce production disruptions and promote investor confidence and stability,” Reyenieju said in the brief obtained by BusinessDay ahead of the Tuesday debate.
In its analysis of the PIB passed by the Senate penultimate week, Simon Amaduobogha of Social Action frowned at the failure of the bill to address key issues initiated in the PIB version proposed by former President Musa Yar’Adua’s administration for 10 percent equity for the host communities.
“This vision brought to light the Petroleum Industry Bill in 2008. Before the government bill was sent to the National Assembly, to address resource control agitations, President Shehu Musa Yar’dua of blessed memory hinted the nation of a10 percent equity in the petroleum industry for host communities.
“It was on that premise that the Petroleum Industry Bill (PIB) was introduced in 2008 and reintroduced in 2012. Hence, most stakeholders welcomed the news of a new bill that was presented before the 8th National Assembly,” he said.
Amaduobogha also frowned at the Senate bill being vague about the future direction of the petroleum gas industry as he suggested that a complete package of the intended changes in the industry should be presented to the National Assembly for consideration simultaneously.
“That will allow for petroleum experts, civil society and environmental advocates to see if salient issues like environmental protection, gas flare out dates, fiscal accountability and transparency, adequate access to justice and host community development interest are addressed and provided for in the legal reforms in the oil and gas industry. Anything short of that will not be in the interest of the generality of Nigerians,” he said.