Nigerian Legislators Slice Up Petroleum Bill

The upper house of the Nigerian parliament on May 25 has passed one part of the three-part Petroleum Industry Governance Bill (PIGB).

It follows a prolonged process lasting 17 years since the bill was first proposed in 2000.

However, the first part of the bill still needs to be signed into law, which requires its adoption by the House of Representatives and by Nigeria's President Muhammadu Buhari. If that happens, part one will restructure operations at the Department of Petroleum Resources (DPR) and the state-owned Nigerian National Petroleum Corporation (NNPC).

No estimate is yet available for when the bill's part one will be signed into law, while the timeline for adoption of the other two parts is still less clear.

The bill's overall aim is to establish the legal and regulatory framework, institutions and regulatory authorities for the Nigerian oil and gas industry, and to establish guidelines for the operation of the upstream and downstream sectors. 

Part 2 of the PIGB crucially will address the tax regime and provide incentives for new investments, while Part 3 will address the grievances of communities in oil-producing areas. According to a source at NNPC, the delay in passing those parts is due to disagreements among stakeholders on the regulatory frameworks, ownership and control of the resources, host community benefits, environmental challenges, and appropriate fiscal regimes.

Representatives of the Buhari administration have spoken out about the necessity of developing clear rules to guide the sector.

Emmanuel Ekon, chairman, of Nigeria's House of Representatives Committee on Local Content told the West African International Petroleum Exhibition and Conference (Waipec) this February in Lagos; "As legislators, we see how we can amend laws and make the industry environment less hostile for would-be investors."

In the upper house's plenary session May 25, Senator Donald Omotayo Alasoadura, chairman of the committee on upstream petroleum, said the passage of the PIGB, will aid value addition, promote transparency and foster a stronger business environment in the oil and gas sector.

Chika Onuegbu, who chairs a committee at labour unions Nupeng and Pengassan examining the bill, also said May 25: "When you consider that Nigeria has lost over N235bn ($730mn) due to its inability to pass the Petroleum Industry Bill into law since the reform in the Nigerian petroleum industry was kick-started 17 years ago, this is indeed a milestone achievement, especially when you consider that the PIGB is not an Executive Bill."

Omono Okonkwo