Oil is a natural petroleum product from hydrocarbon deposits and other organic materials. As a major source of income for the Nigerian economy, it accounts for as much as about 70% of government revenue, and more than 83% of the country’s total export earnings. Nigeria is the eleventh largest oil producer in the world with about 35.2 billion barrels of crude oil reserves.
Petroleum usually refers to a refined product of crude oil, a black liquid found in geological formations beneath the Earth’s surface. Components of petroleum are separated using a technique called fractional distillation.
Recent improvements in technology have led to exploitation of the unconventional reserves such as oil sands and shale oil. Once extracted, oil is refined and separated, most by distillation, into numerous products for direct use or in manufacturing, etc. such as gasoline (petrol), diesel and kerosene to asphalt and chemical reagents used to make plastics, pesticides and pharmaceuticals.
The Production process of Petroleum:
Crude oil occurs underground, at various pressures, depending on depth. It can contain considerable natural gas. All the fluids are collected by surface equipment for separation.
The significance of oil as a world energy resource is difficult to overemphasize. The growth in energy production during the 20th Century was unprecedented, and increasing oil production has been by far the major contributor to that growth. The position of our country in this system depends on its production capacity as related to its consumption. With no iota of doubt, the Petroleum Industry Act is a game-changer for the industry. The Act will provide a standard and uniform regulatory framework for the oil and gas sectors in Nigeria.
Before the introduction of the Petroleum Industry Bill (PIB), 2021, various restructuring efforts had been made to restructure the oil and gas industry, but without any real success. Prior to this, there were various iterations of the Bill. This started as an omnibus bill and was later divided into 4 separate bills before emerging as a consolidated bill. The previous attempts at passing the Petroleum Industry Bill were known to have failed due to various factors such as lack of ownership, misalignment of interests between the National Assembly and the Executive, perceived erosion of ministerial powers, stiff opposition by the petroleum host communities and push back by investors on the perceived uncompetitive provisions in the previous versions of the Bill.
Salient provisions of the Actare; All employees of NNPC are to be deemed employees of NNPC Ltd. The Key objective of the PIB is to transform the Nigerian Oil Gas Industry. The NNPC (Nigerian National Petroleum Corporation) will now be unbundled. The NNPC will now be registered as a private company limited by shares under CAMA. The NNPC will now be NNPC LTD. Its shares will be held by the Ministry of Finance on behalf of the Federal Government
