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National Assembly Passes PIB, Approves 3% for Host Communities

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The two chambers of the National Assembly yesterday passed the Petroleum Industry Bill (PIB), after about 13 years of legislative fireworks.

Although the House of Representatives apparently skipped certain parliamentary procedures to pass the bill as witnessed by journalists at plenary, the Chairman of the House Ad-hoc Committee on the PIB, Hon. Mohammed Monguno, later told reporters that what transpired at the plenary did not actually mean that they passed it as widely reported.

The President of the Senate, Dr. Ahmad Lawan, said the demons behind the non-passage of the bill for many years had been defeated.

Also, the Senior Special Assistant to the President on National Assembly (Senate), Senator Babajide Omoworare said the federal lawmakers had broken the jinx.

However, there was uproar at the Senate as the senators disagreed on the profit share percentage to be allocated to the host communities in the PIB, before finally settling for three per cent.

The Senate passed the much-awaited PIB after a clause-by-clause consideration of all the 318 clauses of the bill.

The bill was first sent to the National Assembly in 2008 by President Umaru Yar’Adua, now deceased, without translating into an Act.

Chairman of the Senate Joint Committee on Petroleum Upstream/Downstream and Gas, Senator Sabo Nakudu, had earlier while presenting its committee’s report before the Senate went into a closed-door session with the Minister of State for Petroleum Resources, Mr. Timipre Sylva, and the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Malam Mele Kyari.

The bill had proposed five per cent of the annual profit share of the oil companies for the host communities.

Shortly after the Senate resumed plenary after its executive session with Sylva and Kyari, Lawan commenced the clause-by-clause consideration of the bill.

By the time he got to clause 240, which made provision for five per cent trust fund for host communities, the plenary became rowdy.

Explaining why the five per cent was reduced to three per cent shortly after the plenary, Nakudu said the earlier percentage, which was 2.5 was increased to five per cent.

He added that it was reduced after Kyari explained that five per cent is a huge amount of money.

According to him, the three per cent amounts to half a billion dollars, adding that enabling environment needs to be created to attract investors as fossil oil is fast going out of fashion.

Majority of senators later voted for three per cent contribution to the host communities, following a motion by Senator Ahmad Kaita, seconded by Senator Ibrahim Gobir, for an amendment to clause 240(2) of the bill.

Efforts by the Deputy Senate President, Senator Ovie Omo-Agege, Senators James Manager, George Sekibo and Albert Akpan for an upward review were rejected.

Sekibo, in a move to sustain his agitation for an increase in contributions to host communities, relied on Order 73 of the Senate Rule and called for a division.

But the Senate Leader, Senator Yahaya Abdullahi, prevailed on him to withdraw his call for division and reminded him of the commitment of senators to fostering unity while keeping in mind their obligation at all times to protect the national interest.

Lawan also told Sekibo of the overwhelming support of the lawmakers who had earlier approved that host communities should receive remediation and relief from monies accruing from gas flaring in the PIB.

Sekibo then withdrew his earlier call for division. During a clause-by-clause consideration of the bill, the Senate also approved the funding mechanism of 30 per cent of NNPC Limited’s oil and gas profit in the production sharing, profit sharing, and risk service contracts to fund exploration of frontier basins.

It approved clause 4 of the bill, which seeks the establishment of the Nigerian Upstream Regulatory Commission to provide technical regulatory functions to enforce, administer and implement laws, regulations and policies relating to upstream petroleum operations. The commission will, among others, ensure compliance with applicable national and international petroleum industry policies, standards and practices for upstream petroleum operations; and establish, monitor, regulate and enforce health, safety and environmental measures and standards relating to upstream petroleum operations.

In addition, the Senate also adopted the committee’s recommendation to retain provisions in Clause 29 of the bill, approved the establishment of the Nigerian Midstream and Downstream Petroleum Regulatory Authority.

Clause 29(3) empowers the agency to be responsible for the technical and commercial regulation of midstream and downstream petroleum operations in the petroleum industry in Nigeria.

Its function include implementing government’s policies for midstream and downstream petroleum operations as directed by the minister; and to promote, establish and develop a positive environment for international and domestic investment in midstream and downstream petroleum operations.

Others are to ensure strict environmental implementation of policies, laws and regulations for midstream and downstream petroleum operations; and to develop and enforce a framework on tariff and pricing for natural gas and petroleum products. The recommendation of the joint committee was amended in clause 52(7d) to ensure that all monies received from gas flaring be channelled for the purpose of environmental remediation and relief of the host communities as against the development of infrastructure in midstream gas operations. The Senate, however, retained the recommendation of the joint committee in Clause 53, which empowers the Minister of Petroleum Resources to incorporate Nigeria National Petroleum Corporation as a limited liability company, to be known as NNPC Limited, six months after the commencement of the Act.

It adopted clause 53 that mandates the minister, at the incorporation of NNPC Limited, to consult with the Minister of Finance to determine the number and nominal value of the shares to be allotted, which would form the initial paid-up share capital of NNPC Limited.

The Senate also approved the ownership of all shares in NNPC Limited to be vested in the government at incorporation and held by the Ministry of Finance Incorporated on behalf of the government.

Lawan, after the passage of the PIB congratulated the National Assembly and the Joint Committee on Downstream Petroleum Sector; Petroleum Resources (Upstream); and Gas for the “tremendous and historical achievement of passing the long-awaited Petroleum Industry Bill.”

He said the passage of the PIB was an indication that the “demon” behind its non-passage in the past had been finally defeated.

Lawan appealed to President Muhammadu Buhari to give expeditious assent to the bill when it is eventually forwarded to him.

Addressing journalists on PIB after plenary, the Senate spokesman, Senator Ajibola Bashiru, said: “On the three per cent that was approved for the upstream operating expenditure, from the projection made by the NNPC GMD, who briefed us, it will amount to $502.8million for the host community development fund.

Meanwhile, the Senior Special Assistant to the President on National Assembly (Senate), Omoworare, has congratulated Buhari, Lawan, and the Speaker of the House Representatives, Hon. Femi Gbajabiamila, on the passage of the PIB by the National Assembly.

He said: “It should be noted that the efforts by the executive and legislature in Nigeria to put in place contemporary legislative and legal framework in the oil and gas sector has proved abortive since the year 2000; also, the non-amendment of the extant framework being the Petroleum Act of 1967, has affected the inflow of foreign direct investment as well as growth in local content.

“Breaking this jinx and achieving this feat is a testament that the executive and the legislature can really work together and truly engage each other, without compromising party position and individual perspective, in the most positive manner with a view to actualizing the common goal and communal good for Nigerians.”

Also yesterday, the House of Representatives y passed the PIB.

It considered and adopted the report on the PIB for passage during its committee of the whole session.

The adoption, followed the consideration of all the 318 clauses of the bill, presented by Chairman of the Ad-hoc Committee on the PIB, Hon. Mohammed Monguno.

Moving the motion for the consideration, Monguno said by passing the bill into law, the House would have written its name in gold.

The 318 clauses of the bill were put to a voice vote by the Deputy Speaker, Hon. Idris Wase and they were unanimously adopted by the lawmakers.

Speaking after the consideration of the report, the Speaker, Hon. Femi Gbajabiamila, hailed the House for achieving the feat.

He said: “I want to commend the 24 wise men and the 360 members in producing this 318 sections law. In the coming week, the electoral amendment will follow suit. By the time we are done, irrespective of which side of the divide you are on, this 9th House would have done us proud and recorded on the right side of the law.”

But Monguno later told reporters that contrary to what has already been reported by the media, the bill had not been passed but was considered and adopted by the committee of the whole.

But his clarification confirmed that the lawmakers may have skipped the third reading stage to pass the bill

He said: “The Petroleum Industry Bill has suffered over the years in previous assemblies. But this time around, the 9th House of Representatives decided to take the bull by the horn and passed the bill. We decided to pass it with the speed of light because of the urgency it demands. Nigeria has lost a lot in terms of direct foreign investment in our oil and gas industry, as a result of obsolete laws affecting the oil and gas industry. In abroad their oil and gas laws is in tandem with international best practices.”

He added that the bill will now be scheduled for third reading and final passage and then referred to the Buhari for assent.

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