November 2020 Edition

The PIB or PIGB
Myths, Facts and Prayers (cont’d)
Efforts to ameliorate the challenges
proved abortive until the start of a major
i n d u s t r y re f o r m i n A p r i l 2 0 0 0 ,
culminating in the delivery of the Oil and
Gas Sector (Reform) Implementation
Committee (OGIC) report in 2004.
The enactment of an encompassing
legislation for the Nigerian petroleum
industry was anticipated for over a
decade now. The first draft of a PIB was
submitted to the 6th National Assembly
in September 2008.
Unfortunately, it suffered so much
recycling and eventually stalled due to
various issues including the need for the
PIB to address key concerns affecting
several stakeholder groups which were
categorized broadly under institution &
governance, administration, fiscal
terms, and host communities. There
was also a lot of push back on the
omnibus nature of the Bill then.
In 2010, the local content aspect of the
PIB was excised and repackaged as a
separate Bill. It eventually became the
NCDMB Act and has since changed the
local content landscape in the industry.
A further effort made during the 7th
National Assembly to repackage the PIB
suffered the same fate of non-passage.
Consequently in the wisdom of the 8th
National Assembly, the Bill was
u n b u n d l e d i n t o f o u r ( 4 ) m a i n
components: the Petroleum Industry
Governance Bill (PIGB), the Petroleum
Industry Administration Bill, the
Petroleum Host Community Bill (PHCB)
and the Petroleum Industry Fiscal Bill
(PIFB).
It was decided that the unbundled
components would be addressed and
passed into law as distinct laws.
The PIGB was the forerunner of the
unbundled Bills and was then prioritized
in the legislative journey as it sought to
revitalize the regulatory framework of
the Petroleum Industry, through the
creation of regulatory institutions and
commercial entities. It was eventually
passed by the National Assembly in
2018 and transmitted to the Presidency
for assent. The failure to sign the Bill by
the President further stalled seeing a
possible end to the protracted reforms
of the Nigeria petroleum industry.
Soon after the start of the second term
of the Administration of President
Muhammadu Buhari, a team was put in
place to once again repackage the PIB
as an Executive Bill. The team worked
through most of 2019-2020 and on 28
S e p t e m b e r 2 0 2 0 , P r e s i d e n t
Muhammadu Buhari presented the
Petroleum Industry Bill 2020 (PIB 2020)
to the National Assembly for its
consideration and subsequent passage
into law. It is an elaborate omnibus piece
of legislation that would repeal existing
legislations in the Petroleum Industry
and serve as the single governing
legislation going forward.
Timeline for Legislative
Passage of PIB 2020
Following transmission to the 9th
National Assembly, an engagement
session was held with the Executive to
better understand the principles,
philosophy and details as presented in
the PIB 2020. Thereafter, on the 30th
day of September 2020, the 1st Reading
took place at plenary in both the Senate
as well as the House of Representatives.
By Tuesday 20th of October 2020, the
Senate held its 2nd Reading and passed
the Bill to the relevant committees for
further deliberation. The House of
Representatives is also making efforts
to do same so that, barrring delays or
disruptions, the statutory Public
Hearing with all stakeholders can be
called and held sometime in December
before closure for Christmas holidays.
Upon resumption in January 2021, the
remaining aspects of the legislative
journey can be expedited to ensure
passage and assent hopefully during
the first half of the year.
Structure & Objectives
of PIB 2020
The Petroleum Industry Bill 2020 aims to
align with and strengthen the existing
Petroleum Policy which has a Vision “To
become a nation where hydrocarbons
are used as fuel for national economic
growth and not simply as a source of
income”.
The strategic objectives of the Policy are
to:
Ÿ Enable a market driven oil and gas
industry
Ÿ M a x i m i s e p r o d u c t i o n o f
hydrocarbons
Ÿ Move away from oil as a source of
income to oil as a fuel for economic
growth
Ÿ Minimise the environmental footprint
of oil exploration and production
Ÿ Managing the balance between
depleting oil resources vs renewable
energy.
Henceforth, petroleum as a resource will
be prioritized to meet domestic demand
over exports. The intention of the policy
is to realize additional value from oil and
gas by encouraging the development of
petroleum-based industries using the
proceeds to drive industrialization and
national development as against
primarily increasing revenue.
The Bill is broadly structured into five
Chapters, namely:
Chapter 1: Governance &
Institutions
Chapter 2: Administration
of Upstream, Midstream
and the Downstream
Chapter 3: Fiscal
Framework
Chapter 4: Host
Community Development
Chapter 5: Miscellaneous
It is aimed at achieving the following
core objectives:
1. Promote economic growth through
increased oil and gas production;
2. Promote economic growth through
strong investments in midstream gas
infrastructure to increase gas based
power generation and industries;
3. Promote frontier exploration;
4. Establish an effective acreage
management system;
5. Create transparency and nonconfidentiality;
6. Transform NNPC into a viable
NAPENEWS | NOVEMBER 2020 | 17