Nigeria made history yesterday with President Muhammadu Buhari (PMB) signing the Petroleum Industry Bill (PIB) into law after decades of delay.
PMB assented to the PIB yesterday a month after it was passed by both chambers of the National Assembly.
Working from home due to a five-day quarantine as required by the Presidential Steering Committee on COVID-19 following his return from London on Friday, August 13, the president, in a statement by presidential spokesman, Femi Adesina, assented to the Bill on Monday, August 16, in his determination to fulfill his constitutional duty.
The ceremonial part of the new legislation will be done on Wednesday after the days of mandatory isolation would have been fulfilled.
The Petroleum Industry Act provides legal, governance, regulatory and fiscal framework for the Nigerian petroleum industry, the development of host communities, and related matters.
The Senate had passed the bill on July 15, 2021, while the House of Representatives did the same on July 16, thus ending a long wait since early in 2000, and notching another high for the Buhari administration.
The signing of the bill, which has attracted accolades from various stakeholders in the country, paves the way for the full commercialisation of the Nigerian National Petroleum Corporation (NNPC), turning it into a limited liability company that can run its operations transparently with limited interference from government.
Experts with deep knowledge of the PIB have said that the new law will allow transparency and influence openness in investment decisions in the oil and gas industry.
They also said that the proposed equity investment of the NNPC will not be affected as the corporation will now operate as a limited entity and assume a commercial status.
LEADERSHIP checks reveal that the move by NNPC to take up 20 per cent investment in Dangote Refinery is becoming a global trend as state-owned oil corporations are moving to invest more in private businesses instead of relying solely on sale of crude for their revenues.
Just yesterday, Saudi Arabian state-owned Aramco was in advanced talks to acquire a roughly 20 per cent stake in Reliance Industries Ltd’s oil refining and chemicals business for about $20 billion to $25 billion in Aramco’s shares, Bloomberg News reported yesterday. An agreement could be reached as soon as the coming weeks.
Reliance had announced a sale of a 20 per cent stake in its oil-to-chemicals business to Aramco for $15 billion in 2019, but the deal stalled after oil prices and demand crashed last year due to the pandemic.
In his submission, Mr. Johnson Chukwu, founder and managing director, Cowry Asset Management Limited, said that the successor company will take over the assets and liabilities of the present corporation, and as a private limited company it can invest in existing assets to expand its revenue generation and broaden its investment portfolio.
Chukwu, who is also chairman, Virgin Forest Energy Limited, noted that NNPC had equity in ammonia plants, methanol plants and fertiliser plants so that it can spread its risks and portfolio, and taking equity in any refinery that is producing more than 50,000 barrels is the right thing to do
Executive director of the Civil Society Legislative Advocacy Centre (CISLAC), Auwal Musa Rafsanjani, said since the NNPC Limited would engage in the development of renewable resources in competition with private investors, it has the responsibility to make investments that will generate revenue for its operations.
A finance and economy expert, Prof. Uche Uwaleke, said with the passage of the PIB into law, Nigeria’s oil and gas sector is now set to be on the path of huge growth and Investments,
The assent to the PIB, at long last, he said, will open up the petroleum sector for more investments, thereby boosting economic growth.
“The Bill makes provision for speedy granting of licenses to investors, especially in the downstream sector. This is likely to translate to the establishment of more refineries in Nigeria which will go a long way to meet local consumption with prospects of ending fuel importation and the loss of forex associated with it.This could strengthen the value of the naira in the long run as well as create job opportunities in the petroleum value chain.
“The Bill also provides for the application of cost reflective tariffs by operators and the commercialisation of NNPC Limited. One implication of this is that fuel subsidy will completely be removed.The reality is that fuel subsidy is causing incalculable damage to the economy,” he pointed out.
Uwaleke added that there is no doubt that the removal of fuel subsidy will result in some hardship by way of rising inflation in the near term, but in the medium to long term, it is in the overall interest of the economy as it will free up more resources to fund critical sectors of the economy, he stated.
Commenting on the passage of the PIB, the Organisation of Petroleum Exporting Countries (OPEC) has congratulated PMB for signing the bill into law.
OPEC secretary general, Dr Mohammed Barkindo, said this in a congratulatory letter yesterday.
“I wish to extend my congratulations to you on signing into law the Petroleum Industry Bill (PIB), which marks a significant milestone for Nigeria’s oil industry and a historic achievement for your Presidency.
He added that the enactment of the legislation was timely as the investment outlook had become clouded by efforts aimed at accelerating a lower-carbon future.
According to him, the new law will help harness Nigeria’s potential to achieve its programme of raising oil production to 4 mb/d and oil reserves to 40 billion barrels, while also drawing on the country’s vast natural gas reserves to provide clean and efficient energy.
He also acknowledged the contributions of minister of state for petroleum resources, Chief Timipre Sylva.
“Sylva’s shuttle diplomacy earlier this year as Special Envoy of the Joint Ministerial Monitoring Committee (JMMC) to Congo, Equatorial Guinea, Gabon and South Sudan contributed to the improvement in conformity levels with the voluntary production adjustments and compensation of overproduced volumes.
“He carried out this important mission with great aplomb and garnered the respect of his fellow ministers. I am confident the law marks the beginning of a new era of growth and prosperity that will be beneficial to the petroleum industry and ultimately to the Nigerian people,” he said.
Also, commenting on the passage, Goke Dele, group chief executive officer, Quest Oil Group, said the passage of the PIB marks a new dawn and the beginning of a major repositioning of the Nigerian oil and gas Industry.
According to Dele, through this bill we expect to see a free market economy in operations within the downstream sector which would give the Nigerian economy a major boost.
Dr. Muda Yusuf, economist and former director general, LCCI, said the presidential assent to the PIB is a welcome development.
”Although it is not a perfect legislation – not all the concerns of major stakeholders have been addressed by the legislation, it is surely an improvement over the current legislative framework.
“I’m aware that the oil companies were concerned about the adequacy of the fiscal terms in the PIB. The host communities also had reservations about the percentage contribution to the host communities fund, but we can always improve on those provisions with time. Issues of this nature are typically work in progress,” he said.
The Act, Yusuf stated further, is a major instrument of reform in the oil and gas sector.
“It has a number of significant implications for the oil and gas sector and the economy as a whole. It has a profound investment effect as investment sentiments in the petroleum sector are enhanced by the new policy regime.
“There is the macroeconomic effect, which is expected from the conservation of foreign exchange as more petroleum products are produced locally. There is a revenue effect on account of new private investments in the sector; there is the employment effects from new investments, and there is the expected foreign exchange earnings outcomes which higher upstream oil sector investment will generate.
“The boosting of petroleum refining capacity as well as petrochemicals production will have remarkable impacts on our balance of payment position in the medium to long term.” he added.
On his part, Olatunji Akinwunmi, chairman, Society of Petroleum Engineers, SPE Nigeria Council, said the assent by President Muhammadu Buhari would help Nigeria’s energy transition through the utilisation of its abundant gas resources.
He said:”We made our submissions during the public presentations. We have seen the final draft and we are satisfied.
“We believe that it will serve as a good tool for the development of our oil and gas resources. The bottom line is that the PIB, as it is today, is a most useful document.
“So, it means that it is something that will really help us to move in the direction of energy transition through exploration and development of our immense gas resources. We will now see more investment in exploration and value addition to the oil and gas sector”.
The executive secretary of the Nigeria Extractive industries Transparency Initiative, NEITI, Dr. Orji Ogbonnaya Orji, said, “It is a historic development that has ended decades of uncertainty.”
Ogbonnaya said the new law has opened a new phase of wider opportunities in the oil and gas industry.
He said NEITI applauds the significance of the Presidential assent to the bill and looks forward to playing an active role in designing a new future for the industry under the new Petroleum Industry Act.
The national president of the Independent Petroleum Marketers Association of Nigeria, IPMAN, Elder Chinedu Okoronkwo, however expressed fear that many operators in the downstream sector will be thrown out of business as cost of products procurement will go up.
According to Okoronkwo, this will create initial shocks given that only those with capital can make purchases of products, and many who are trading with bank facilities would have difficulty repaying their loans if they can’t procure new products. However, he said, Modular Refinery operators may have to start refining petrol as there may not be a price cap anymore.
The national president of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Comrade Festus Osifo, who welcomed the development, noted that the signing of the bill into law by the president will end the level of uncertainty in the oil sector.
The Senate reacted to the signing of the Petroleum Industry Bill (PIB) into law by President Buhari, stating that it will juice up the national economy by liberalising the Petroleum Sector and pave the way for investors, both local and international, to invest in the oil sector with the government on a competitive basis.
According to the Senate, the signing of the bill is a major victory that has the potential of bailing Nigeria out of its economic predicament and an act that will enable the country to make the most of economic gains of the oil industry for the benefit of Nigerians.
The chairman, Senate Committee on Public Affairs Dr Surajudeen Ajibola Basiru while congratulating the Executive arm of the government led by President Muhammadu Buhari, the leadership and members of the National Assembly and all other stakeholders in the oil industry, said efforts at reaching this stage had been a protracted affair as the bill, first initiated in 2003, had been subjected to a ping pong affair between the previous Legislatures and the Executive.
PIB Act Will Guarantee Transparency In Investments – Speaker
Speaker of the House of Representatives, Femi Gbajabiamila, has said that Nigeria’s oil and gas industry would now receive a breath of fresh air and allow investments and transparency to flourish with the coming into being of the Petroleum Industry Act, 2021.
In a statement by his Special Adviser on Media and Publicity, Mr Lanre Lasisi, in Abuja, Gbajabiamila noted that the coming into being of the law was a victory for Nigerians and a landmark achievement that ended the two-decade-long journey of the PIB.
Gbajabiamila said when massive investments come in as a result of the PIA, a lot of Nigerians will gain employment.
The speaker said he was optimistic that with the coming on board of the PIA, Nigerians will also benefit from reduced fuel prices as there would be competition among the industry players.
The speaker praised the determination of the 9th Assembly that saw the Act become a success and commended the synergy between the Executive and Legislative Arms of Government that won the victory for Nigerians.
“As I said before, this is a landmark achievement. It has been 20 years in coming. This 9th Assembly will be recorded on the right side of history for this big score”, he stated.
Gbajabiamila added that the oil and gas industry could only fare better with the Act, calling on investors to take full advantage of the opportunities that the new law provided.
The PIA provides the legal, governance, regulatory and fiscal framework for the country’s oil and gas industry.
It also makes provisions for the development of host communities by creating a Host Communities Fund, and further exploration of petroleum resources in the new frontiers.
PIB: ACF Applauds PMB For Exceptional Courage
The apex northern sociocultural group, Arewa Consultative Forum (ACF) has applauded President Muhammadu Buhari for his exceptional courage in signing into law the Petroleum Industry Bill (PIB).
ACF through the national publicity Secretary Mr Emmanuel Yawe however said, “This is an industry matter and not an issue to be bickered about by the regions. The problem with Nigeria is that everything is reduced to sentiments of ethnicity, religion and regions.That is why this bill has been over twenty years in the making.
President’s Assent To Bill, Unfortunate, Big Disappointment – PANDEF, OPA,
Several groups in the Niger Delta region, including the Pan Niger Delta Forum (PANDEF) and the Ogoni Peoples Assembly (OPA), have faulted the decision of President Muhammadu Buhari to sign the Petroleum Industry Bill (PIB) into law, describing the development as unfortunate, sad and big disappointment.
Speaking with LEADERSHIP in Port Harcourt yesterday, PANDEF’s national publicity secretary, Ken Robinson, said the bill falls way short of the expectations of the oil and gas producing communities that bear the brunt of unconscionable industry operations.
Robinson said: “It’s quite unfortunate that President Muhammadu Buhari went ahead to assent to the Petroleum Industry Bill, despite the overwhelming outcry and condemnation that greeted its passage by the National Assembly, especially with regards to the paltry 3% provision for the Host Communities Development Trust Fund and the brazen appropriation of an outrageous 30% of NNPC Ltd profit for a dubious, nebulous frontier oil exploration fund.
“This PIB falls way short of the expectations of the Oil and Gas Producing Communities that bear the brunt of unconscionable industry operations.
“This assent, by President Buhari, simply speaks to the repugnant attitude of disregard, propelled by arrogance, disdain and contempt with which issues concerning the Niger Delta Region are treated, particularly by the present administration.
“What this act signifies is an unequivocal message to the Niger Delta people that how they feel and what they say do not count at all, in the scheme of the Nigerian project.
“The Niger Delta people will speak, shortly, after full consultations, on this callous act, on the best legal and political response.”
Speaking with LEADERSHIP also, leader of Ogoni Peoples Assembly (OPA), Comrade Celestine Akpobari, said the people of Niger Delta will meet and consult extensively on the next step to address the issue.
Ijaw Youths Rejects Signing Of PIB
Ijaw youths from the nine states of the Niger Delta region have rejected the signing of the controversial Petroleum Industry Bill (PIB) by president Muhammadu Buhari.
According to the Ijaw youths, the signing of the PIB into law is a total affront to the outcry of the people of the Niger Delta region against the three per cent provision for the oil producing communities.
PDP Berates PMB, APC Over PIB
Similarly, Peoples Democratic Party (PDP) has berated President Muhammadu Buhari for ignoring the outcry by Nigerians across board not to sign what it called “the offensive, repugnant and anti-people Petroleum Industry Bill (PIB), as passed by the National Assembly, into law.”
The main opposition party noted that the signing of the law, despite widespread public rejection, amounts to endorsement of imposition and further confirms that President Buhari and his All Progressives Congress (APC) have no iota of respect for the people as well as the tenets of democracy as a system of government.
The national publicity secretary of PDP, Kola Ologbondiyan, said President Buhari, by his action, has only authenticated that he is not a listening leader and that the APC and its leaders are only out to trample on the will of Nigerians for their selfish interests.