The Senate has begun the process of passing into law the long awaited Petroleum Industry Bill, PIB, as it yesterday passed the first reading.
The controversial bill, which is called the Petroleum Industry and Governance Bill, PIGB, seeks to give the country’s oil and gas industry a comprehensive legal framework and also provide the basis for the unbundling of the Nigerian National Petroleum Corporation, NNPC, into five independent commercial entities. Both the Senate and the House of Representatives had harmonized the bill before yesterday’s action by the Senate which makes it the third time it would pass first reading in the Senate.
Both chambers of the National Assembly had recently harmonised a new draft of PIB and renamed it PIGB, following a prolonged silence by the Presidency on the bill as well as continued agitation for its passage by the citizenry. Speaking, yesterday, Senate President, Dr Bukola Saraki, who noted that the legislature adopted the PIB as one of its legislative agenda, said the 8th Senate under his watch, would pass the bill to help stimulate the nation’s economy. Saraki, while inaugurating the Senate standing committees on November 23, 2015, had explained that the Senate was already working closely with the executive towards getting the bill passed quickly, adding that past attempts to reform the industry through the PIB failed for various reasons which he didn’t identify.
According to Saraki, lawmakers will begin consideration of the first set of bills on the petroleum industry reforms in a matter of weeks. Also, the controversial PIB had been in the National Assembly for consideration since 2003 but due to ethnic politics and duplication of the bill, efforts to pass the bill were scuttled. The petroleum industry framework was first conceived by the administration of the late President Umaru Yar’Adua and sent to the sixth National Assembly. Failure of the sixth Assembly to pass the bill made the immediate past government of President Goodluck Jonathan re-present the bill to the seventh Assembly.
However, the seventh Assembly, again, failed to pass the bill as a result of stiff opposition from Northern lawmakers, especially over allocation of 10 per cent royalty to oil producing communities in the bill. Probes NNPC’s JV cash calls Meanwhile, the Senate, yesterday, asked its Joint Senate Committee on Petroleum (Upstream and Downstream), Finance and Appropriation to immediately commence the investigation of joint venture cash calls by the Nigerian National Petroleum Corporation, NNPC.
It expressed concern over an allegation that the NNPC had been violating rules governing its joint venture cash call and consequently asked its committee to investigate the allegation. The Senate then asked the committee to come up with sanctions for any known violation of appropriation acts in the oil and gas sector. Senate resolutions were sequel to a motion by Senator Bassey Akpan (PDP, Akwa Ibom North-East).
Akpan in the motion, alleged persistent constraints by NNPC to meet its cash call obligations, a situation he said had worsened the country’s crude oil production output and other activities in the oil and gas sector. Akpan, who put the current outstanding cash call obligations in the oil and gas sector at $6 billion, stressed that cash calls ought to be treated as first line items by NNPC, prior to its remittance of available balance in its collectible revenues from crude sales to the federation account.
Akpan noted that such revenues ought to be handled as approved by the National Assembly, describing it as an issue of serious concern that crude oil production from the joint venture between NNPC and IOCs had declined by 47 per cent as at the last quarter of 2015. He ascribed this to the Federal Government’s inability to meet its cash call obligation, adding that it was illegal and unconstitutional for NNPC to spend billions of dollars which ought to be used to settle joint venture cash calls on “inconsequential administrative expenses.”
Akpan, who noted that the National Assembly had approved over N1 trillion as joint venture cash calls for 2016 fiscal year, stressed that the legislative institution must ensure strict adherence to the approval as contained in 2016 Appropriation Act and Medium Term and Expenditure Framework, MTEF.
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