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Reps to begin debate on PIB Tuesday
Tony Akowe, Abuja
The House of Representatives will on Tuesday begin debate on the Petroleum Industry Bill (PIB) forwarded to the National Assembly recently by President Muhammadu Buhari.
The bill which seeks a comprehensive reform of the oil and gas sector has been in the National Assembly for the past twenty years with successive members failing to pass the bill into law.
The Nation gathered that the members of the House have been informed to come to Tuesday’s plenary prepared to make their contribution to the bill which is coming to the National Assembly as an Executive bill for the first time.
Entitled “a bill for an act to provide legal, governance, regulatory and fiscal framework for the Nigerian petroleum industry, the development of host community and for related matters,” the 239 paged documents is divided into five chapters with 319 sections and seven schedules.
Chapter one deals with governance instructions, establishment of the Nigerian Upstream Regulatory Commission and the Nigerian Midstream and Downstream Petroleum Regulatory Authority which will take charge of all issues in the industry and the conversion of the Nigeria National Petroleum Corporation to a Limited Liability company with the federal government as the sole shareholder.
Chapter two deals with general administration of oil and gas in the country, while chapter three deals with all issues concerning the host communities and the responsibilities of oil companies to the host community, while establishing the Host community development trust fund.
Chapter four of the bill deals with fiscal framework of the petroleum industry, hydrocarbon tax, chargeable tax, offences and penalties, application of company income tax among others while chapter five deals with legal procedures, repeals, transfer of assets, employees and condition of service as well as transfer of existing host communities development projects and schemes
When passed, the law will scrap the Department of Petroleum Resources, the Petroleum Product Pricing Regulatory Authority and the Petroleum Equalisation Fund while transforming the Nigeria National Petroleum Corporation (NNPC) into a limited liability company.
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The law will create two agencies that will be responsible for the regulating oil and gas operations in the country. The two agencies are the Nigeria Upstream Regulatory Commission and Nigeria Midstream and Downstream Petroleum Regulatory Authority.
The law vests the ownership of oil and gas resources in the country solely on the federal government saying “the property and ownership of petroleum within Nigeria and its territorial waters, continental shelf and exclusive economic zone is vested in the government of the federation of Nigeria”.
The law will also empower the Minister of Petroleum Resources to formulate, monitor and administer government policy in the petroleum industry, ensure general supervision over the affairs and operations of the petroleum industry, report development within the industry to government, grant prospecting license and mining lease and approve fees for services rendered.
He is also empowered by the law to order a cutback on crude oil and condensate production in the context of international oil pricing agreements supported by Nigeria as well as have rights of pre-emption of petroleum and petroleum products marketed under any license or lease in the event of a national emergency.
The Nigeria Upstream Regulatory Commission to be created under the under the law will be responsible for the regulation of upstream petroleum operations, ensure compliance with all applicable laws, implement government policies on upstream petroleum operation and ensure strict implementation of environmental policies for upstream operations.
Also, the Nigeria Midstream and Downstream Petroleum Regulatory Authority will be expected to regulate midstream and downstream operations, promote a competitive market, promote the supply and distribution of natural gas and petroleum products in the midstream and downstream as well as develop and enforce a framework on tariff and pricing for natural gas and petroleum products.
Section 53 of the bill empowers the Minister of Petroleum to, within 6 months from the commencement of the law, “cause to be incorporated under the Companies and Allied Matters Act, a limited liability company which shall be called Nigeria National Petroleum Company Limited.
It states further that the Minister shall consult with the Minister of Finance to determine the number and nominal value of the shares to be allocated which shall form the initial paid up share capital of NNPC Limited and the government shall subscribe and pay cash for the shares.
It vest the full ownership of NNPC Limited on the government at incorporation with the Ministry of Finance holding the shares on behalf of the government, adding that “shares held by the government in NNPC Limited are not transferable, including by way of sale, assignment, mortgage or pledge unless approved by the government.
However, under section 54 of the bill, assets and liabilities of the present NNPC will be transfer to NNPC Limited and its subsidiaries, adding that “assets, interests and liabilities of NNPC not transferred to NNPC Limited or its subsidiaries shall remain the assets, interests and liabilities of NNPC until they become extinguished or transferred to the government.
Section 54 (3) states that “NNPC shall cease to exist after its remaining assets, interests and liabilities other than its assets, interests and liabilities transferred to NNPC Limited or its subsidiaries under subsection 1 of this section shall have been extinguished or transferred to government.”
Reps to begin debate on PIB Tuesday