BARRING any last minute hitch, the much-debated Petroleum Industry Bill (PIB), which aims at reforming Nigeria's oil and gas policy, will become an Act of Parliament before Christmas.
Special Adviser to the President on Petroleum Matters, Emmanuel Egbogah, disclosed this yesterday at an oil and gas conference in New Delhi, India.
According to reports, Egbogah said the PIB had passed through the last reading at the Senate, hence it would be enacted into law before the Christmas break.
He said: "I am confident the bill will be passed this month.
A Senate source also confirmed to The Guardian that the PIB would sail through alongside other bills as part of the Upper Chamber's effort to clear its table of pending bills.
Meanwhile, Head, Gani Fawehinmi Chambers, Mohammed Fawehinmi, yesterday faulted the Minister of State for Petroleum, Odein Ajumogobia, over the latter's reported comments on a proposed Senate probe of federal subsidy payments to the Nigerian National Petroleum Corporation (NNPC).
Ajumogobia was quoted as saying that a probe of fuel subsidies would amount to a futile exercise.
But in a statement yesterday, Fawehinmi wrote: "What is the Honourable Minister of State for Petroleum, Mr. Henry Odein Ajumogobia (SAN) afraid of? The best weapon to crush corruption is total scrutiny of events or proper investigation.
"I am absolutely in support of what the 10 members of the Senate did in initiating the probe of the NNPC financial books. Every means of corruption or unjust enrichment by public officials should be resisted by all Nigerians. That is the only way to sanitise this country."
The Senate source, who spoke with The Guardian on condition of anonymity, said the presidential adviser's statement on the PIB was correct.
He disclosed that Senate President David Mark has directed that all pending issues before the Senate must be disposed off by the lawmakers before their Christmas and New Year break to demonstrate the chamber's commitment to resolving national issues.
The source said: "What I can tell you is that we (lawmakers) in the National Assembly are set to enact the PIB as a law of the Federal Republic of Nigeria soon. Presently at the Senate, we are engaged on a lot of bills that we hope to pass into law before Christmas. The PIB is one of them."
The PIB came out of the work of the Oil and Gas Sector Reform Implementation Committee (OGIC) which was inaugurated on April 24, 2000 under the chairmanship of Dr. Rilwanu Lukman, then serving as the Presidential Adviser on Petroleum and Energy.
The committee was charged with making recommendations for a far-reaching restructuring of the nation's oil and gas industry.
The need to bring the regulatory framework of Nigeria's oil and gas industry up to date with current realities is self-evident. The Petroleum Act, which is the principal legislation for the industry was enacted in 1969, some 40 years ago.
The PIB aims at sweeping reforms of Nigeria's oil sector. Its main plank is to create new institutions to govern the operations of the industry; transform the existing joint ventures between the multinational oil companies and the NNPC into Incorporated Joint Ventures (IJVs); turn the NNPC into a fully capitalised and profitable national oil company; institute a new fiscal regime that significantly increases government take; remove confidentiality in industry operations and fully deregulate the downstream sector.
The new agencies to be created under the PIB are: National Petroleum Directorate (NPD), to replace the Ministry of Petroleum Resources and would be solely devoted to policy formulation and securing maximum benefit of the industry for Nigeria; National Petroleum Inspectorate (NPI) to replace the Department of Petroleum Resources (DPR) and serve as technical regulator of the industry; Petroleum Products Regulatory Authority (PPRA) to serve as commercial regulator for the downstream sector; and Nigeria Petroleum Assets Management Agency (NAPAMA) to replace National Petroleum Investment and Management Service (NAPIMS) and serve mainly as a cost regulator for the upstream sector managing the country's investment in the industry by benchmarking to ensure that business is conducted in the most efficient manner.
Others are Nigerian Midstream Regulatory Agency (NIMIRA), to regulate midstream and gas operations; and the National Petroleum Research Centre, to serve as a world-class research institute with mini-research centres dedicated to each of the production basins in Nigeria.
The bill provides for renegotiation of previous contracts and for the government to repossess any unexplored acreage.
It also proposes royalty rates of five to 25 per cent on oil and gas production and 30 per cent income tax on all petroleum companies.
Many offshore oilfields, such as Shell's 220,000 barrels per-day Bonga field, were awarded in the 1990s under production sharing contracts that offered royalty rates as low as zero per cent to attract billions of dollars in foreign investment.
According to Lukman, the PIB represents the largest overhaul of the government. Petroleum revenue system in the last four decades was done through four control objectives: to simplify the collection of government revenue; to cream off windfall profits in case of high oil prices; to collect more revenues from large profitable field in the deep offshore waters; and to create Nigerian employment and business opportunities by encouraging investment in small and gas fields.
But the multinational oil companies operating in the Nigerian upstream sector have been skeptical about the bill, saying that it could cost them billions of dollars in investment if it goes ahead in its current form.
