The recent passage of the Petroleum Industry Bill which spent close to 20 years in limbo at the National Assembly before it was passed has generated some controversy. But what does the Petroleum Industry Bill really mean for you?
Timeline
Initially, the Bill, introduced by former President Olusegun Obasanjo, was to reform the Petroleum Industry by ensuring the Government Agencies had clarity of purpose and industry-wide accountability in the Petroleum Sector.
The Bill was finally submitted and evolved into four parts including a holistic address of the Petroleum Industry to fixing the Institutional, tax issues, and fixing the host community issues as well under Umar Musa Yar Adua’s administration. As a result, the passage of the Bill became unwieldy and it was passed in parts.
The last National Assembly recognized the impact and split the bill into 4 various parts for passage on a sequential basis. The National Assembly then passed the Petroleum Industry Governance Bill, it was the first of the 4 Bills and it covered reforming the frameworks of which the Government operated the oil and gas industry.
The bill has now been wholly passed, the only part remaining is to pass through the process of harmonizing or reconciliation where the version of the bill passed by the house and senate form a committee and sit together and discuss and harmonize the bill.
Implications
Passage of the Bill will enable the NNPC to function as a Limited Liability Company and as such will be a profit-driven organization, host communities despite agitating for greater ownership of the underground resources, may not make much progress since the constitution stipulates that all natural resources belong to the federal government.
Because there isn’t a defined structure yet for smaller companies to thrive in the downstream sector, it is believed that market forces will greatly influence price points and drive investment.