There strong indications that the 8th Assembly may have prioritize the much needed oil sector legislation, Petroleum Industry Bill (PIB). This is because the Senate moved forward on a first piece of much-delayed legislation to tackle long-standing problems in managing the nation’s oil wealth, aiming to agree on details for full consideration in just four weeks, according to the Senators.
The Petroleum Industry Bill (PIB), which has been delayed for a decade, aims to tackle everything from an overhaul of the Nigerian National Petroleum Corporation (NNPC) to taxes on upstream projects in a sector riddled with corruption.
The Senate gave initial approval in the second reading last week to the draft plan to overhaul the state oil industry, a procedural move that allows the bill to move forward.
In a draft seen by Reuters in April, Nigeria planned to split state oil company NNPC into two to help ease a planned stake sale in the coming years.
“The poor performance of the NNPC is a major concern. The commercialisation of the corporation and its splitting into two entities is for more efficiency and to enhance performance,” said Senator Tayo Alasoadura, who sponsored the bill.
“It also provides for the establishment of a single petroleum regulatory commission which will focus mainly on regulating the industry,” he said.
The draft does not include the future fiscal regime and taxation for oil firms and the role of host communities, one of the most contentious aspects as militants and villages in the impoverished Niger Delta demand a greater share of the oil revenues it generates and more benefits from oil majors.
The next step is for the Senate committees to provide a report within four weeks after which the Senate will go clause by clause through the final version, the lawmakers said.
The Senate President, Senator Bukola Saraki and Minister of State for Petroleum Resources, Dr Emmanuel Ibe Kachikwu, have repeatedly said the bill would be split to speed up approval but not given details yet of the bill, which is central to President Muhammadu Buhari’s reform of the sector.
The inability to pass the bill and uncertainty around taxation and government funds during a slump in oil revenue has stunted investment, particularly in deep-water oil and gas fields.
Nigeria’s oil output has risen to 2.1 million barrels a day, Kachikwu said after plunging due to militant attacks to 1.37 million barrels per day in May, the lowest level since July 1988, according to the International Energy Agency.