Bedeviling PIB with Obnoxious Provisions
AFinally, the much-awaited Petroleum Industry Bill was passed by the two chambers of the National Assembly, recently. Of the 319 clauses and eight schedules that make up the bill, the ones concerning the host communities and the frontier development of oil have sparked national conversation, threatening to stir up a storm should reservations arising therefrom are not addressed before President Muhammadu Buhari’s assent. For them, giving three per cent, rather than the 10 per cent demanded, to host communities, stretching the definition to oil infrastructure transit communities and using other people’s oil profit to grope for oil in unlikely or impossible places, bring to remembrance some of the on-going open grazing controversy in the country. reports fter a clause-by-clause include governance and institutions; administration; contracts to fund the exploration of frontier host communities as against the development consideration of a host communities development; basins, also got the nod of the red chamber. of infrastructure in midstream gas operations; report by the Joint petroleum industry Àscal framework; and Estimated at $500 million annually, the the recommendation of the Joint Committee Committee on Downstream miscellaneous provisions, the PIB has a total Senate approved 3 per cent of operating was amended in Clause 52(7d). Petroleum of 319 clauses and eight schedules. expenditure of oil companies (OPEX), to be Uproar greeted the Senate-approved 3 per Sector, Petroleum In the NASS approved bill, Clause 53 empowers paid as contribution to the host community cent equity for host communities; as Senators Resources (Upstream), Petroleum Resources Minister to incorporate development fund. were split on the right per cent of oil proÀts to and Gas on the PIB, the Nigeria National Petroleum Corporation The bill also include Clause 4 which seeks be accrued to the Host Communities Trust; two decades of failed attempts later, the Senate (NNPC) as a limited liability company to be the establishment of the Nigerian Upstream before the bill was passed. passed the Petroleum Industry Bill (PIB), two known as NNPC Limited, six months after Regulatory Commission to provide technical In the executive bill, the Presidency had Thursdays ago. the commencement of the Act. regulatory functions that would enforce, forwarded the proposed 2.5 per cent operational
By this passage, the upper chamber approved At incorporation of NNPC Limited, the administer and implement laws, regulations cost-share for the host communities to both the commercialisation of Nigerian National minister is mandated, under this clause, and policies relating to upstream petroleum chambers of the National Assembly last year. Petroleum Corporation (NNPC) and scrapping to interface with the minister of Ànance to operations. Though opposed during the public hearings of the Petroleum Equalisation Fund (PEF) determine the number and nominal value of The approved bill makes provision for the in February by leaders of the oil-producing and Petroleum Products Pricing Regulatory the shares to be allotted. This forms the initial establishment of Nigerian Midstream and communities, in the proposal, the Senate joint Agency (PPPRA), while it okayed 30 per cent paid-up share capital of NNPC Limited. Downstream Petroleum Regulatory Authority, committee that worked on the bill, recommended of proÀts accruing from oil and gas operations Ownership of all shares in NNPC Limited is which shall be responsible for the technical 5 per cent; which, according to the by the NNPC Limited for the exploration of to be vested in the government at incorporation and commercial regulation of midstream committee, was to ensure adequate development oil in the frontier basins. and held by the ministry of Ànance incorporated and downstream petroleum operations in of the host communities and reduction
The bill also set aside three per cent of the on behalf of the government. the petroleum industry in Nigeria. in the cost of production. operating expenditure of oil companies for Funding mechanism of 30 per cent of NNPC To ensure that all monies received from Predictably, the sensitivity of this host the development of host communities. Limited·s oil and gas proÀt in the production gas Áaring are channeled for the purpose of communities’ clause caused some tension
Consisting of Àve distinct chapters, which sharing, proÀt sharing, and risk service environmental remediation and relief of the in the red chamber when the Senate passed