Role of Petroleum Industry Bill

If the Petroleum Industry Bill (PIB), a document put together by the Oil and Gas Reform Implementation Committee (OGIC) headed by the minister of Petroleum Resources, Dr. Railwanu Lukman that currently before the National Assembly sails through, Nigeria may soon witness a major structural and administrative changes in the management and running of the nation’s oil and gas industry.
Lukman in other hand proposed bill would result in a significant increase in transparency.
From now on, petroleum prospecting licenses and petroleum mining leases can only be granted by the minister through a truly competitive bidding process. Such processes will be open and accessible to all qualified companies, he said when the petroleum bill will passed the National Assembly and become a law after President accent, would allow every company in the up stream sector including the Nigerian National Petroleum Corporation (NNPC) to be subjected to same system of rents, royalties and taxes depending however on the area of operation of the industry with the creation of three separate and clearly defined entity for this purpose. The bill seeks to establish the Nigerian Petroleum Inspectorate (NPI) that would be responsible for all matters relating to the upstream actives including oil and gas exploration and production process.
Also to be created is the National Midstream Regulatory Agency that will be responsible for all matters relating to mid-stream activities including pipeline transportation, storage, refining to downstream operations including petroleum product and natural gas distribution to the final consumers.
However, at the public hearing last week in Abuja before the National Assembly committees on Representatives, many issues considered by the stakeholders including the Oil prospecting companies were brought to the attention of the lawmakers, especially duplications and other issues that were not properly captured by the OGIC report.
The stakeholders also brought to bear the fact that there was lack of wider consultation on the part of OGIC as well as non inclusion of submission presented by the stakeholders to the bill.
It was also pointed out by the various stakeholders at the public hearing that two bills were in circulation. The initial bill presented by the president and the second bill smuggled in by the NNPC.
Stakeholders also noted that so many issues in the PIB submitted by NNPC are significantly different from an earlier version of the PIB produced by OGIC committee.
Some significant difference as pointed out by the stakeholders include: The provisions relating to the governmental institutional arrangements for the implementation of the law; The provisions relating to upstream petroleum operations including systems of acreage award and management, work program commitment and mergers; The provisions relating to the Incorporation of the existing Joint Venture Agreements between the NNPC and the IOCs and the provision relating to the fiscal arrangements including the the fiscal regime for existing and future PSCs.