PETROLEUM INDUSTRY BILL
In 2008 under the late President Umaru Yar’Adua, Nigeria began the arduous process of changing the institutional framework which governs the nation’s oil and gas industry. The delayed passage of the bill was followed by controversies surrounding the emergence of different versions of the document, Goodluck Jonathan, on assumption of office ordered a withdrawal of the bill to enable executive address contentious areas and ensure all stakeholders are carried along. However, the Federal government instituted a special committee in January 2012 to fast-track the review and process of passing the bill into law. Subsequently, the revised and harmonized version of the PIB was sent to the 7th session of the national assembly on July 18, 2012. The main objective of that effort was to accelerate development of the Nigerian oil and gas industry for the benefit of all Nigerians. The effort gave birth to what is now known as the Petroleum Industry Bill (PIB). The PIB is a product of the reform process initiated by the Federal Government of Nigeria in the oil and gas industry. PIB evolved from the work and recommendation of Oil and Gas Sector Reform Implementation Committee (OGIC) which was formed in 2000 to carry out a complete reform in the sector. Why Petroleum Industry Bill, Why do we need it?
The Petroleum Industry Bill was drafted in response to the overarching need to replace the old laws that governed the oil and gas industry for the past 50 years. The reason for the reform of Nigeria’s oil and gas is beyond illusion. * It is fundamental necessity to assure the survival of the industry for the benefit of the citizenry. * To establish the 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. * The PIB will ensure that the management and allocation of oil and gas resources in Nigeria are carried out with principle of good governance, transparency, integrity and sustainable development. * To create a favorable environment for the oil and gas industry in Nigeria through infrastructural development, community development, strong environmental protection regulation and private sector growth and increase revenue. Provision of the Petroleum Industry Bill
* The 2012 PIB provides for the legal, fiscal and regulatory framework of the Nigerian oil and gas. * In order to achieve transparency, the 2012 PIB provides for the incorporation of the national oil company, a successor to the Nigerian National Petroleum Company (NNPC). This will facilitate good corporate governance, reduce bureaucratic bottlenecks and minimize political influence. * The PIB also provides for the establishment of the following agencies to the regulation of the oil and gas industry: 1. The Petroleum and Technical Bureau (PTB)
2. The Upstream Petroleum Inspectorate (UPI)
3. Downstream Petroleum Regulatory Agency (DPRA)
4. The Petroleum Technology Development Fund (PDTF)
5. The Petroleum Equalization Fund (PEF)
6. Petroleum Host Communities Fund (PHC Fund)
* Another provision in the PIB is that every company that is involved in the oil and gas exploration and production is required to remit into a fund on a monthly basis, 10% of its net profit. How does the bill address transparency in governance?
Conflicting views of the Nigerian oil and gas industry has focused more on the lack of integrity and transparency. * The PIB attempts to introduce transparency in the management and operations of the industry by reducing the overbearing role and influence of government. * To achieve transparency, the 2012 PIB provides for the incorporation of the national oil company, a successor to the Nigerian National Petroleum Company (NNPC). This will facilitate good corporate governance,...