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House of Reps pass Petroleum Industry Bill

The House of Representatives has just passed the Petroleum Industry Bill (PIB).

This comes after the House Committee of the Whole, on Thursday, considered the report of the Ad hoc Committee on PIB and passed the bill. The report was laid on Wednesday by the Chairman of the Ad hoc Committee, Mohammed Monguno (APC, Borno).

The current version of the PIB is titled, “A Bill for an Act to Provide Legal, Governance, Regulatory and Fiscal Framework for the Nigerian Petroleum Industry, the Development of Host Community and for Related Matters.”

Among others, the various provisions in the bill seek to scrap the Petroleum Equalisation Fund and the Petroleum Products Pricing Regulatory Agency with a view to replacing them with a new agency to be known as the Nigerian Midstream and Downstream Regulatory Authority, which would be saddled with the responsibility of carrying out technical and commercial regulation of the midstream and upstream petroleum operations in the industry.

PIB: Oil Firms’ licences may be revoked over neglect of host communities

Oil firms that neglect their obligations to host communities risk losing their operating licenses if the new Petroleum Industry Bill (PIB) presently before the National Assembly sails through.

The Petroleum Industry Bill (PIB) seeks to increase government revenue from oil, establish strengthened legal and regulatory framework for the Nigerian oil industry, and promote transparency in the administration of Nigerian petroleum resources.

According to Leadership newspapers, in the new bill, the power to revoke oil licenses is vested on the Minister of Petroleum Resources. It reported that according to the bill, the action will be taken with the recommendation of the Nigerian Upstream Regulatory Commission, among other powers.

It defines host community as “any community situated in or appurtenant to the Area of Operation of a Settlor (oil company), and any other community as a Settlor may determine.”

It said that any oil and gas company that fails to incorporate the Host Communities Development Trust would have its license revoked.

It stated that on its constitution, the Host Communities Development Trust would be empowered to manage and supervise the administration of the annual contribution of the settlor (oil companies) contemplated under the Act and any other sources of funding.

The bill further proposed that the objectives of the trust shall include financing and executing projects for the benefit and sustainable development of the host communities.

“It will undertake infrastructure development of the host communities within the scope of funds available to the Board of Trustees for such purposes; and facilitate economic empowerment opportunities in the host communities, among others,” it said.

Other powers granted the minister of Petroleum in the new bill include the revocation and assignment of interests in the petroleum industry, and approval of the fees for services rendered by the upstream, midstream and downstream regulatory authorities.

The bill is also proposing to empower the minister to order a cutback of the levels of crude oil or condensate production in the context of international oil pricing agreements supported by Nigeria.

It stated: “The minister is also empowered to, upon the recommendation of the Nigerian Upstream Regulatory Commission, or the Nigerian Midstream and Downstream Petroleum Regulatory Authority, direct in writing the suspension of petroleum operations in any area.

“The suspension, according to the bill will persist until arrangements to prevent danger to life or property have been made to his satisfaction or where in his opinion, a contravention of the Act or any regulation made under the Act has occurred or is likely to occur”.

The bill has passed second reading at the Senate and a committee was constituted to work on it for further deliberation.