The Petroleum Industry Bill (PIB) …So Much Noise, So Little Substance

Nigeria’s legacy of inaction in passing urgent reforms is perhaps best captured by the Petroleum Industry Bill (PIB). The Bill is over a decade in waiting since the original version was put forward by the Executive in 2008. The most recent update was the split of the comprehensive Bill into four parts in 2015 to ease passage. The new versions are the Petroleum Industry Governance Bill (PIGB), Petroleum Host and Impacted Community Bill (PHICB), Petroleum Industry Administration Bill (PIAB) and Petroleum Industry Fiscal Bill (PIFB). In early 2018, the PIGB was passed by the National Assembly but President Buhari has withheld assent for more than 18 months, citing concerns on certain aspects. Ahead of the 2019 elections, there was less urgency to pass or make revisions to the Bill. 

 

With a new cabinet in place, the Bill is once again in the spotlight but different actors offer conflicting guidance. In a recent communication, the Senate President, Ahmed Lawan, indicated that a new draft “from the scratch” to be passed by year-end 2020 is on the cards. Meanwhile, the Minister of State for Petroleum Resources, Timipre Sylva, had earlier hinted that work had reached advanced stage towards passage by mid-2020. President Buhari, who is also the Minister of Petroleum Resources, should be the final authority on the subject but there is little insight on his plans.  

 

In our opinion, introducing another version of the Bill would only extend its completion timeline given the extent of deliberations required. This is even more puzzling as the current versions were introduced by the President Buhari led administration. The Senate President is perhaps hoping to build on the recent remarkable streak of the National Assembly in passing reforms. In the past six months, the 2020 Fiscal Bill, the 2019 Finance Bill and the PSC Amendment Bill were all passed in record times. However, the PIB is more complex and contentious given the array of stakeholders involved, the need to benchmark competitiveness with the rest of the world and its relevance to investment in Nigeria’s most attractive sector. We believe working with the current versions of the bill may be the more plausible option for faster passage. In light of the transition to renewable energy, which is prompting less investment in oil and gas activities, the need for a robust and competitive regulation is urgent to attract investment and exploit Nigeria’s oil and gas resources.

 

 

 

Afrinvest

Category: 
myfinancialintelligence.com