No other bill has been more popular since Nigeria’s return to democratic rule in 1999 than the Petroleum Industry Bill, PIB due to its importance to Nigerians and
the nation’s economy. Olugbenga Salami writes on the new hope raised recently by the 8th National Assembly to ensure the passage of the bill, which the 6th
and 7th Assembly could not see through

Petroleum Industry
Governance Bill, PIB 2016 passed
the first reading on the floor of
the senate recently. Interestingly,
the bill retains virtually all the
contents of the first version of the
draft by the Goodluck Jonathan
administration last year as the
Petroleum Industry Governance
and Institutional Framework Bill
2015, with a few amendments.
Federal Executive Council,
FEC under Jonathan had
approved the new draft Bill,
which is a product of over 16 oil
and gas industry laws brought
together in one comprehensive
document. The then Minister
of Information, Labaran Maku
had explained that the draft
Bill was approved after some
amendments have been effected.
The draft PIB, which seeks to
give the country’s oil and gas
industry a comprehensive legal
framework, would provide the
basis for the unbundling of the
Nigerian National Petroleum
Corporation, NNPC into five
independent commercial
entities. The companies that are
to emerge for the unbundled
NNPC include National Oil
Company, NOC; National Assets
Management Corporation,
NAMC, National Frontier
Exploration Services, NFES; National Gas Company, NGC and
the Host Community Fund, HCF.
PIB is a bill that, when passed
as an Act, becomes the master
reference law that governs the
Nigerian petroleum industry
from the upstream division
(exploratory, development and
production activities) through
the midstream (gas processing) to
downstream (servicing, refining,
distribution, transportation,
m a r k e t i n g / r e t a i l i n g ) .
Senators had on June 2015
towards the end of 7th Assembly
passed 46 bills and curiously,
the PIB was missing on the list
of those bills that were passed in
a jiffy. Former Senate President,
Senator David Mark, who presided
over the 6th and 7th Assembly,
lamented the non-passage of the
PIB. He admitted that the upper
legislative chamber could not meet
all the targets that it set for itself.
But the incumbent Senate
President, Dr.Abubakar Bukola
Saraki had during the inauguration
of 12 standing committees of the
Upper House, said the legislature
this time around has adopted
the bill not only to break the jinx,
but to stimulate the country’s
economy. It was learnt that the
new version of the PIB is being
sponsored by the leadership of both
chambers of the National Assembly.
Saraki, while further raising the
hopeof Nigerians on PIB recently,
said the senate and the House of
Representatives were ready to collaborate on harmonized version
of the bill after years of non passage
at both chambers of the National
Assembly. He said the harmonized
version of the bill would soon
be laid at both chambers.
The Senate President, who spoke
while at the National Assembly
Business Environment Roundtable,
added that, the Senate and House
of Representatives had already
resolved to do a joint work on the bill.
He said: “The National Assembly,
the Senate and the House of
Representatives are working very
closely. As part of this commitment,
we would all see next week when
we lay down the Petroleum
Industry Bill; you will see that the
bill we are going to lay in each
House is the same. We are going to
lay the same version in the senate
and the House of Representatives
because that is going to be the first
time we are open to our words”.
The PIB began the original journey
shortly after former President
Olusegun Obasanjo assumed
office in 1999 when he set up the
Oil and Gas Industry Committee,
OGIC, with a mandate to take a
comprehensive look at the country’s
oil and gas sector and offer better
ways of managing the industry.
The OGIC was led by the late
Alhaji Rilwanu Lukman, a veteran
petroleum engineer and former
Minister of Petroleum as well
as former Secretary-General of
the Organisation of Petroleum
Exporting Countries, OPEC, and had other oil industry eggheads as
members. The committee submitted
its report, and its recommendations
formed the basis of PIB which
has since been subjected to
further reviews and adjustments.
The PIB was designed by
its promoters as a regulatory
framework to improve the
petroleum industry with the
introduction of transparency and
accountability. With transparency
and accountability provisions,
the Presidency believed the
country’s oil sector environment
will be sanitised and play its role
as the lifeblood of the economy.
There is no denying the fact that
many of the laws and regulations
guiding the industry had been
around for long, some as far
back as1950’s, and although they
had undergone amendments, the
federal government considered it
necessary to take a holistic review of
the industry with a view to getting
the best of it by all stakeholders.
PIB, however, was first forwarded
to the National Assembly for
consideration in 2008 as an
Executive Bill by the late President
Umaru Musa Yar’Adua. But, the bill
has been in limbo for eight years
with the original 2008 Presidency
submission (HB 159), another
submission in 2010 by the Federal
Inter-Agency Team, and what had
been dubbed, “the weakened 2011
Senate version” of the bill (SB 236).
Good enough, the new PIB
also proposes revolutionary amendments to existing laws to
protect the interest of the host
communities as well as promote
transparency and accountability
in the operations of the industry.
The bill seeks to create a
conducive business environment
for petroleum operations; enhance
exploitation and exploration of
petroleum resources in Nigeria
for the benefit of Nigerians;
optimise domestic gas supplies,
especially for power generation
and industrial development;
encourage investment in Nigerian
petroleum industry; optimize
government revenue; and
establish profit-driven oil entities.
Other benefits are to deregulate
and liberalise the downstream
petroleum sector; create efficient
and effective regulatory agencies;
promote the development of
Nigerian content in the oil
industry; and protect health,
safety and the environment
in petroleum operations.
It is, however, sure that
Nigeria and Nigerians would
benefit immensely from the key
objectives of the bill, especially
when it becomes an Act. These
include more jobs for Nigerians
as it will become illegal to employ
foreigners for certain skills that
can be sourced locally. Where
such skills are sourced from
abroad due to unavailability
locally, a local understudying
the expert is a requirement.
According to economists,
this will be applicable not
only to skill, but to materials
sourcing. This means more
jobs for Nigerian local
contractors, especially those
from the oil producing regions.
Again, gas is still underfocused
in Nigeria and the
potential from this source
of energy lays untapped.
Therefore, the PIB seeks
to maximize this. If well
explored, this will boost
power supply in Nigeria.
More importantly,
government revenue from
oil industry will increase.
This means more funds in
the hands of government to
engage in developmental
activities, ideally. The
downstream sector becomes
fully deregulated. In other
words, subsidy will fully go.
Experts are of the opinion that
subsidy removal is not totally
bad, if there are no distortions
to market while they also
believed that there will be
environmental protection
with the bill becoming an Act.

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