The Petroleum Industry Bill moved one step closer to becoming law after Senators on Thursday began to consider its provisions after a committee report.
Senator Sabo
Mohammed (Jigawa South-West) who chairs the Joint Committee on Petroleum
(Downstream); Petroleum (Upstream) and Gas Resources presented the report of
the committee.
He said the
PIB is designed to update and replace the outdated provisions with a more
comprehensive and current petroleum industry law that aligns with global
standards.
He added that
it also seeks to empower institutions and not individuals, remove bad
governance which leads to inefficiency and corruption in the country’s
petroleum industry.
Speaking on
the PIB, the Deputy Senate President, Senator Ovie Omo-Agege said the bill will
create an enabling environment for investors to come in and invest in Nigeria’s
oil sector.
He, however,
appealed that the contribution of companies to a Host Communities Trust Fund be
increased.
The committee
had recommended that five percent of the actual annual operating expenditure of
the proceeding financial year in the upstream petroleum operations should go to
the Fund.
On gas
flaring, Senator Omo-Agege was opposed to the use of penalty funds in
development of frontier gas basins. He said such funds should be channeled into
developing affected communities.
According to
him, the communities are the ones affected by gas flaring, and therefore
whatever funds are raised from penalizing companies involved in gas flaring
should be used for remediation purpose in affected communities by providing
them hospitals and roads, among other basic amenities.
The Senator
representing Niger East, Senator Sani Musa, however deferred on the
observations made by Senator Omo-Agege, and appealed to the lawmakers to desist
from rancour so as not to impede the passage of the PIB.
Below are some key points in the report of the
Senate committee:
1. Report
prescribes amendments to a total of 752 provisions out of which about 56 are
substantial amendments as recommended by stakeholders during public hearing
2. The
Committee recommends funding mechanism of 30% of NNPC Limited’s profit oil and
profit gas as in the production sharing, profit sharing, and risk contracts to
fund exploration of frontier basins. The Frontier Basins are to take advantage
of the foreseeable threats to the funding of fossil fuel projects across the
world due to speedy shift from fossil fuel to alternative energy sources.
3. The
Committee recommends 5% of the actual annual operating expenditure of the
proceeding financial year in the upstream petroleum operations affecting the
host communities for funding of the Host Communities Trust Fund. (This is
however a drop of 5% compared to the 10% recommended in the previous PIB
submitted to President Muhammadu Buhari by the 8th Assembly which was not
assented to)
4. The
Committee recommends 96 amendments to Chapter Four of the Bill for better and
attractive tax incentives to achieve the goal of attracting the over 100Bn
Dollars capital investment inflow into Africa’s oil and gas industry.
0 Comments