President Muhammadu Buhari is expected to accent to the long awaited Petroleum Industry Bill anytime from now. The PIB bill is aimed at boosting output and attracting foreign investment, in the main.
The reforms, 20 years in the making, are particularly urgent this year as low oil prices and a shift towards renewable energy have made competition tougher to attract investment from oil majors, Reuters said yesterday.
A team of lawyers at the Nigerian Ministry of Justice are said to have finalised the draft of the long-awaited Bill and sent it off to the National Assembly. The frame of the document had earlier been approved by President Muhammadu Buhari and the Federal Executive Council.
The omnibus legislation, which, according to the Ministry of Petroleum, “combines 16 different Nigerian petroleum laws in a single transparent and coherent document ….” has Again been consolidated into one single volume.
The first version of the PIB was presented to the National Assembly in 2007, but failed to be signed into law. Observers note that the PIB has gone unsuccessfully through two National Assemblies and two Presidents.
The last time the bill was debated by the legislature-during the first term of President Muhammadu Buhari-it was in four separate volumes. Out of the four: Petroleum Industry Governance Bill (PIGB), Petroleum Industry Finance Bill, Petroleum Host and Impacted Communities Bill (PHICB) and Petroleum Industry Administrative Bill, only one, the PIGB, made it through to the President’s desk for assent and he didn’t sign it.
A draft summary included provisions that would streamline and reduce some oil and gas royalties. One of the sources described even the government’s reduced take of oil revenues, through taxes, royalties and other fees, as “aggressive” compared with other nations.
The Bill proposes to boost the amount of money companies pay to local communities and for environmental cleanups. It would also alter the dispute resolution process between companies and the government, though specifics of the changes were not included in the summary.
The bill also included measures aimed at pushing companies to develop gas discoveries and a framework for gas tariffs and delivery. Commercializing gas, particularly for use in local power generation, is a core government priority.
The oil ministry said the bill will be presented in one piece with four chapters. An effort to pass reforms by breaking them into several bills in 2018 fell flat; just one portion made it to President Buhari’s desk, and he never signed it.
The law underpinning oil, Nigeria’s financial lifeline has not been updated since the 1960s. Pumping its oil has historically been hugely profitable, but changes late last year that hiked Nigeria’s take of oil earnings, and a VAT increase, frustrated companies.
Royal Dutch Shell, the largest international operator in Nigeria, said a botched reform effort would be “putting at risk and making unviable most of the planned projects.”
Fiscal uncertainty and other frustrations have delayed a decision on a multi-billion dollar expansion by Royal Dutch Shell and its partners, while Chevron, Total and ExxonMobil are selling various Nigerian assets.
By Chibisi Ohakah, Abuja