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The Petroleum Industry Bill (PIB) is one of the most important bills that hasn’t been passed in Nigeria. If it is passed, there will be a clear separation of roles in Nigeria’s oil sector. Corporations like the NNPC will also become profit-oriented companies, and “host” communities in the Niger Delta will get better deals from oil operations.
Yesterday, The Punch reported that President Muhammadu Buhari has submitted new proposals about the Petroleum Industry Bill to the National Assembly.
What is the Petroleum Industry Bill?
As you should know, crude oil makes up over 60% of Nigeria’s total earnings, and about 90% our foreign exchange.
Since the Obasanjo administration, there have been efforts to reform Nigeria’s oil and gas industry, therefore, the Oil and Gas Sector Reform Implementation Committee, and then the Petroleum Industry Bill.
Three presidents later, the bill hasn’t been signed into law. Under Yar’adua, there were disagreements over how oil profits should be shared between International Oil Companies (IOCs), host communities and the federal government. Under Jonathan, only the House of Representatives passed the bill.
PIB under Buhari
Bukola Saraki’s 8th Senate split the PIB into 4 other bills: the Petroleum Industry Governance Bill (PIGB), Petroleum Host Community Bill (PHCB), Petroleum Industry Fiscal Bill (PIFB) and the Petroleum Industry Administration Bill (PIAB). However, Buhari did not sign that bill into law when it was passed by both houses of assembly in 2018 because of a provision that allowed the Petroleum Regulatory Commission to retain up to 10% of total oil earnings.
These are five things you need to know about the PIB:
It seems the PIB is finally making progress under the 9th National Assembly. Some of the most important sections in the new bill include:
- The creation of a new Nigerian National Petroleum Company called NNPC Limited — Section 53
- The government will own all shares in this new “NNPC”
- The Minister of Finance and Petroleum will determine assets of the former NNPC (NNPC Corporation) that must be transferred to the new NNPC (NNPC Limited) — Section 54
- The Nigerian Upstream Regulatory Commission will regulate operations in the upstream sector of oil industry — Section 4
- The Midstream and Downstream Petroleum Regulatory Authority will regulate activities in downstream sector of oil industry — Section 29
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