The Senate recently passed the Petroleum Industry Bill (PIB) and approved 3 per cent for the host communities. The upper chamber passed the Bill after the clause by clause consideration of the report of its joint committee on Petroleum (Upstream, Downstream and Gas) on PIB.
Although the Senate approved three per cent for the host communities despite protests from the South-South lawmakers, who advocated 5 per cent.
The Petroleum Industry Bill, an omnibus law meant to regulate the entire sphere of the industry and repeal all current existing oil and gas legislation was one of the oldest bills in the legislature, and has struggled to see the light of day since it was first mooted by the Olusegun Obasanjo administration between 1999-2007.
Petroleum Industry Bill (PIB), a transformative piece of legislation that seeks to consolidate 16 different Nigerian Petroleum Laws into a single document was a product of a reform initiated by former President Olusegun Obasanjo on April 24, 2000.
On the said date, the former President set up the Oil and Gas Reform Implementation Committee (OGIC), headed by his Honorary Special Adviser on Energy and Strategic Matters, the late Dr. Rilwanu Lukman.
Obasanjo had mandated Lukman’s committee to carry out the first comprehensive reform of the oil and gas industry but the National Oil and Gas Policy (NOGP) produced by the Lukman’s committee was not implemented before Obasanjo’s tenure ended on May 29, 2007.
However, the imperatives for reform in the sector prompted the late President Umaru Musa Yar’Adua to reconstitute a new committee, also headed by Lukman, on September 7, 2007.
Lukman’s new committee, which submitted its report on August 3, 2008, was mandated to “transform the broad provisions in the NOGP into functional institutional structures that are legal and practical for the effective management of the oil and gas sector in Nigeria”.
The PIB, which establishes a new legal and regulatory framework as well as new institutions and regulatory authorities to replace about 16 obsolete legislations in the oil and gas sector, was a product of Lukman’s committees.
The passage of the PIB, which was first sent to the National Assembly during Yar’Adua’s administration, was unduly delayed until Yar’Adua demise.
Following the criticism of the initial draft of the bill sent by the late Yar’Adua by Nigeria’s business partners, former President Goodluck Jonathan, on assumption of office, withdrew the bill to enable the executive address contentious areas and ensure that all stakeholders were carried along.
Before he resubmitted the bill, the Jonathan’s administration had set up a Special Taskforce on the Review of the PIB and a PIB Technical Committee, which reviewed the reform legislation with new inputs from the government and the operators.
The bill has since undergone numerous revisions and debates, and met with a complex set of obstacles. In July 2012, the then President Goodluck Jonathan’s administration presented a new version of the PIB to the National Assembly for consideration and enactment.
There was some success in 2015, with the passage of the bill at the HoR in the 7th Assembly but progress stalled when the bill did not go through the Senate before the dissolution of the 7th Assembly following the change of government in May 2015. Politics, the transition of power from the Jonathan to Buhari administration, venal ambition of different sector stakeholders, and the bulky nature of the PIB have also since stalled the passage of the bill.
The utmost the country came to concretising the PIB was in 2018 when the Petroleum Industry Governance Bill (PIGB), one of the four anthologies of the PIB, was harmonised and passed by both chambers for the president’s assent. The PIGB created four new entities whose powers included the ability to conduct bid rounds, award exploration licences and make recommendations to the oil minister on upstream licences.
When President Muhammadu Buhari in 2018, shockingly refused assent to one of the components of the Petroleum Industry Bill, the expectation of most Nigerians was that a new revised bill would be designed and forwarded to the National Assembly for action.
In January 1, 2020 the Minister of State for Petroleum Resources Timipre Sylva declared that the Petroleum Industry Bill (PIB), would soon be passed by the National Assembly. According to Sylva, a review of the Petroleum Industry Bill was at an advanced stage and full passage of the bill was expected mid-2020.
He later posit on the side-lines of the OPEC meeting on March 5, 2020 that, “the PIB has been a long time coming and we think that when it comes out later this year, it will come out with a lot of sweetness.” He added, “We are very mindful of the fact that it’s a very competitive environment right now and we are taking that on board in the new law.”
Senate President Ahmad Lawan had earlier in 2020 pledged that the Senate would ensure the transmission of the approved version of the PIB to President Buhari for his assent before the end of 2020.
“Our petroleum industry is almost stagnant and for long needing profound reform. Our oil and gas-related committees are, therefore, expected to work hard to take the lead in our determination to reform this vital sector. It is the desire, indeed the design of this Senate that the Petroleum Industry Bill is passed before the end of 2020.” he added.
Analysts say that, the passage of the bill, which would have paved the way for massive investment in the country’s oil and gas sector, has remained bottled up in the National Assembly with successive leadership of the legislature making efforts, with the accompanying horse-trading, to attempt a passage of the bill.
Interestingly, even when some Assembly sessions passed the bill, the Presidency had been variously arm-twisted to withhold assent, thus making the PIB remains the oldest bill in the National Assembly since 1999.
Pundits believed that, the best and latest effort made so far in the passage of the bill has been that of the 8th National Assembly, under the leadership of Senator Bukola Saraki and Hon. Yakubu Dogara which, in the quest to make the passage easier and less contentious, broke it down into four different components, namely; the Petroleum Industry Governance Bill (PIGB), the Petroleum Industry Administration Bill (PIAB), the Petroleum Industry Fiscal Bill (PIFB) and the Petroleum Host and Impacted Communities Bill (PHICB).
The Petroleum Industry Governance Bill (PIGB) originally seeks to establish a framework for the creation of commercially, oriented and profit-driven petroleum entities, to ensure value addition and internationalisation of the petroleum industry, through the creation of efficient and effective governing institutions with clear and separate roles for the petroleum industry.
The new PIB will have two regulators, one for the upstream and the other for the midstream and downstream sectors of the industry.
It was also believed in some quarters at a time that, the Senate was responsible the delay in the passage of PIB, but the Senate however broken its silence over the delay in the passage of the Bill blaming it on the disagreement over the host community clause in the document, pledging that the Upper Chambers would take on the management framework upon resumption from their recess.
Since the beginning of the oil industry in Nigeria in the 1950s, this is the first major rehabilitation process being undertaken by any administration in the oil industry. There is no doubt that the PIB will help resolve some of the knotty issues that constituted the contradictions in the industry all these years. When all these issues are smoothened out, it would have laid a solid foundation for the growth of the petroleum industry.
