By Barrister Eze
The Executive Bill was transmitted to the National Assembly by President Muhammadu Buhari in September 2020, after about 12 years that the PIB had remained work-in-progress.
Below are 20 takeaways from the Bill now undergoing legislative process at the National Assembly.
1. This is the first time since the introduction of the PIB to the Sixth National Assembly in 2008 that there is high probability of not only passing the Bill but also of a President assenting to the Bill. This sense of optimism is supported by the statement of the Chairman of the National Assembly and President of Senate that the Ninth National Assembly will pass all Bills presented to it by President BUHARI.
2. The PIB has been 12 years old at the National Assembly without becoming law due to variegated interests.
3. There is high expectation that the PIB will be passed and assented to in 2021, and added as part of the BUHARI oil and gas reforms legacy. Recall that BUHARI, while he was a military man, had been a Minister of Petroleum as far back as 42 years ago.
4. Then President Obasanjo initiated the “Oil Sector Reforms” when he inaugurated the “Oil and Gas Reform Implementation Committee” in April 2000. The Committee’s task included: “To review and streamline existing petroleum laws and establish an all-inclusive regulatory framework for the industry.”
5. Late President Yar’Adua presented the Bill to the Sixth National Assembly in 2008. The Bill was not passed due to disagreements on the sharing of oil profit among the international oil companies (IOCs), host communities, and the Nigerian Federation.
6. In 2012, former President Goodluck Jonathan presented a revised version of the PIB to the Seventh National Assembly but only the House of Representatives passed it due to the clash of interests among stakeholders.
7. The Senate of the Eight National Assembly passed a variance of the Bill known as the Petroleum Industry Governance Bill in May 2017 while the House of Representatives passed its own version in January 2018. President Buhari refused to assent to the Bill when it was transmitted to him in July 2018 and the National Assembly failed to veto his decision hence the collapse of that effort.
8. Before the passage of the PIGB by the Eight National Assembly, it sub-divided the PIB into four separate bills, namely:
i. Petroleum Industry Governance Bill (PIGB),
ii. Petroleum Industry Administration Bill (PIAB),
iii. Petroleum Industry Fiscal Bill (PIFB), and
iv. Petroleum Industry Host Community Bill (PIHCB).
However, only the PIGB was passed but not assented to.
9. By virtue of section 53 of the Bill, the Minister of Petroleum shall, within 6 months from the commencement of the Act, cause to be incorporated under the Companies and Allied Matters Act, a limited liability company, which shall be called the Nigerian National Petroleum Company Limited (NNPCL).
10. The Petroleum Industry Bill, 2020 has substituted the Nigerian National Petroleum Corporation (NNPC) with the Nigerian National Petroleum Company Limited (NNPCL). The basic difference is that while the former was created by an Act of the National Assembly, the latter will be registered as a limited liability company with the Corporate Affairs Commission.
11. One of the similarities between the NNPC and NNPCL is that both of them are owed by the Federal Government. The Minister of Petroleum Resources in consultation with the Minister of Finance will, on behalf of the Federal Government, upon determination of the nominal value of shares to be allotted which shall form the initial paid-up share capital, register the latter at the Corporate Affairs Commission.
12. Ownership of all shares in NNPCL shall be invested in the Federal Government at incorporation and held by the Federal Ministry of Finance Incorporated on behalf of the Federal Government.
13. By virtue of section 54 of the Bill, the Minister of Petroleum and the Minister of Finance shall determine the assets, interests and liabilities of the NNPC to be transferred to NNPCL or its subsidiaries and upon the identification, the Minister of Petroleum shall cause such assets interests and liabilities to be transferred to NNPCL.
14. Assets, interests, and liabilities not transferred to NNPCL or its subsidiaries shall remain the assets, interests, and liabilities of NNPC until they become extinguished or transferred to the Federal Government.
15. NNPC shall cease to exist after its remaining assets, interests, and liabilities other than its assets, interests, and liabilities transferred to the NNPCL or its subsidiaries shall have been extinguished or transferred to the Federal Government.
16. The Bill has established two agencies to regulate all the streams of the oil and gas industry, namely: the “Nigerian Upstream Regulatory Commission” (NURC) and the “Nigerian Midstream and Downstream Petroleum Regulatory Authority” (NMDPRA), both of which are body corporates that can sue and be sued.
17. Section 4 of the Bill provides, among others, that the NURC shall be responsible for the technical and commercial regulation of upstream petroleum operations in Nigeria.
18. Section 29, of the Bill, which established the NMDPRA, provides, among others, that the Authority shall be responsible for the technical and commercial regulation of the midstream and downstream petroleum operations in the petroleum industry.
19. When the NNPC will cease is contingent upon when the non-transferred assets, interests, and liabilities to NNPCL, are extinguished or transferred to the Government (whatever that means). The obvious implication is that the date of cessation of NNPC is unknown, although with incorporation of NNPCL, NNPC will take the back seat until it discharges any remaining asset, interest and liability.
20. The reactions of International Oil Companies (IOCs) to the fiscal and taxation provisions, and the Host Communities to the accruable benefits as stakeholders will determine the shape of the Bill as the National Assembly gears up for the pressures that will ensue.
If the Bill is successfully passed, as I expect, NNPCL will compete internationally with the *Saudi Aramco of Saudi Arabia, PDVSA of Venezuela, and Petrobas of Brazil,* among such other companies in oil-producing countries.
***Barrister Eze is of the Faculty of Law, Nasarawa State University, Keffi.