Finally, Nigeria’s Senate and House of Representatives on Thursday passed the Petroleum Industry Bill (PIB) after considering and adopting the Bill’s 318 clauses.

The Senate passed the Petroleum Industry Bill (PIB) with the approval of three percent for host community trust fund as against five percent recommended by the Joint Committee of the National Assembly on Petroleum (Upstream and Downstream) and Gas in a report presented last week.

The PIB passed third reading after Mohammed Sabo, Chairman of the Joint Committee on Petroleum (upstream and downstream) and Gas, presented a report and its clauses were put to voice vote.

While presenting the report on Thursday, Sabo said the legislation is aimed at “promoting transparency, good governance, and accountability in the oil and gas sector.”

The chairman said the committee recommended that 30 percent of Nigeria National Petroleum Corporation (NNPC) profit from oil and gas should be used to fund exploration of frontier basins.

“The various obsolete laws currently in operation in the country have been updated and consolidated in this chapter to meet global competitiveness and best practices,” he said.

“A total of 355 amendments were recommended to this chapter while others were retained.”

During the clause-by-clause consideration of the bill in the committee, the percentage that should be allocated to the host communities caused a division among the senators.

At the public hearing on the Bill, representatives of the host communities demanded that they be allocated 10 percent.

Although five percent was proposed, the joint committee recommended three percent after a meeting of the senators with Timipre Sylva, minister of state for petroleum resources, and Mele Kyari, NNPC group managing director.

After three percent was accepted as what is due to host communities, Thompson Sekibo, senator representing Rivers north-east, challenged the decision to cut down to 3%.

Senate leader Abdullahi Yahaya described it as a bad precedent and urged Sekibo to withdraw his motion.

Senator representing Delta south James Manager said five percent was not too much for the host communities.

The House of Representatives adopted the report on the Petroleum Industry Bill (PIB) for passage at the Committee of the Whole.

The Executive Bill, which sought to reform the oil and gas sector and ensure its governance met with best global standards, was presented by the Chairman of House Committee on PIB, Rep. Mohammed Monguno (APC-Borno).

Following the adoption of the report, the Bill will now be scheduled for third reading and final passage by the House.

Presenting the report, Monguno said that the PIB had suffered lots of setbacks in the parliament since its introduction in 2000.

What you should know 

President Muhammadu Buhari sent the reworked Bill to the National Assembly in September 2020 after many delays in the legislative review process over the past 15 years.

The Bill, which is intended as a complete overhaul of the Nigerian oil and gas sector, seeks to, among others, ensure an increased level of transparency and accountability in the sector by strengthening the governing institutions to attract investment capital through changes to the governance, administrative, regulatory and fiscal framework of the Nigerian oil and gas industry.

The key objectives of the fiscal aspect of the Bill is to encourage investment in the petroleum industry while optimizing revenues accruing to the Government. It also seeks to ensure that transparency is achieved in the administration of the petroleum sector and Nigerian content is promoted through an efficient and effective regulatory framework.