The Senate on Thursday passed first tranche of the Petroleum Industry Bill (PIB), titled the Petroleum Industry Governance Bill (PIGB) 2017.

The bill, which is expected to take care of the governance aspect of the industry, scaled third reading following presentation of report of Joint Committee on Petroleum Resources (Upstream, Downstream, Oil and Gas).

If assented to by the President, the Act will unbundle the Nigeria National Petroleum Corporation (NNPC) into two companies: Nigeria Petroleum Assets Management Company and the National Petroleum Company.

According to the bill, the two companies shall be created and supervised by the Ministry Of Petroleum Incorporated.

It provides that “the Minister shall, within six months after the Effective Date, take such steps as are necessary under the Companies and Allied Matters Act to incorporate two entities – the first may be called the Nigeria Petroleum Assets Management Company, or such other name as may be available and the other may be called the National Petroleum Company, or such other name as may be available, as companies limited by shares, which shall be vested with certain assets and liabilities of the Nigerian National Petroleum Corporation (“NNPC”).

“Upon incorporation and the transfer of assets pursuant to this Act: the Nigeria Petroleum Assets Management Company (hereinafter called the “Management Company” in this Act) shall be responsible for the management of assets currently held by the Nigeria National Petroleum Corporation (NNPC) under the Production Sharing Contracts and Back-in Right Provisions under the Petroleum Act 1969 as amended;

“The National Petroleum Company shall be responsible for the management of all other assets held by NNPC except the Production Sharing Contract and Back-in Right assets currently held by the NNPC;

“At the time of its incorporation, the initial shares of the National Petroleum Assets Management Company shall be held in the ratio of 20% by the Bureau for Public Enterprises, 40% by the Ministry of Finance Incorporated and 40% by the Ministry of Petroleum Incorporated on behalf of the Government.

Sen.  Tayo Alasoadura, Chairman of the joint committee, who presented the report, said the PIGB was the first tranche of the PIB.

According to him, other tranches, that would soon be presented before the senate are, Upstream Petroleum Licence and Lease Administration, Downstream Oil and Gas Administration and Petroleum Fiscals.

He added that another tranche to be considered is the Petroleum Revenue Management including Petroleum Host Community Fund.

Alasoadura said the PIGB would help to create efficient and effective governing institutions with clear and separate roles for the petroleum industry.

The lawmaker said with the passage of the bill, there will be a slim, focused yet robust framework for effective institutional governance of the petroleum industry.

He stressed that the Nigeria National Petroleum Corporation (NNPC) would be reformed into two liability companies, while all existing regulatory agencies would be absorbed into a new agency called Petroleum Regulatory Commission.

“We supported and enhanced the creation of an independent one-stop-shop regulatory agency which will absorb the present Department of Petroleum Resources (DPR), Petroleum Products Pricing Regulatory Agency (PPPRA).

“It will also absorb the Petroleum Equalisation Fund (PEF) into one agency.

“We have streamlined the role of the Minister.

“We have also enhanced the extensive reform of NNPC into two limited liability companies-the National Petroleum Company and the Nigeria Petroleum Assets Management Company.

“This is to ensure efficient and effective commercial performance,’’ he said.

The lawmaker further pointed out that the PIGB would help to establish a framework for the creation of commercially oriented and profit driven petroleum entities that ensure value addition and internalisation of the petroleum industry.

He also said that the bill would help to promote transparency and accountability in the administration of the petroleum resources of Nigeria as well as foster a conducive business environment for petroleum industry operation.

“PIB has been in the works since 2000 and almost all the senate republics that you can think about have tried to work on it and to get it passed but none has succeeded.

“We looked at the Bill as it was and we said it will be better not take the bill as a whole, to divide it into sections.

“And the first section, which we believe will make petroleum industry what we expect it to be, is what was passed today and that is the Petroleum Governance Bill.

“Everything that has to do with petroleum resources the governance is what has been done,’’ he said.

The chairman further noted that the laws governing the petroleum industry in the country had become so obsolete and as such the need for an overhaul.

According to him, the law has been an impediment to investment in the oil and gas industry and needed a drastic overhauling, transformation and reformation.

“This situation has brought a lack of investments in this industry and consequently the reserves in the industry are not being grown.

“The Mexican experience has shown that a well-reasoned and crafted Oil and Gas reform law could attract as much as $60 billion additional investment in the industry in 3 years,’’ he said.

The joint committee according to the chairman recommended that the bill be given accelerated consideration and passage and its immediate implementation for maximal utilisation of the nation’s natural resources.

He further pointed out that the joint committee made amendments and deletions to relevant sections of the Bill were contained in the attached bill for consideration.

In his remarks, the President of the Senate, Dr Bukola Saraki said the passage of the first tranche of the bill was a landmark achievement for the 8^th Senate.

He said the present senate made a commitment at its inauguration and was happy to keep to its promise.

“All our friends and investors in the petroleum sector have been waiting for us to put a framework that will ensure transparency and accountability and create the enabling environment for the petroleum sector.

“We hope that by what we have done today, we have continued to show commitment and leadership and our contribution to develop this country. We are proud of all we have done today.

“I hope that with this bill the oil and gas industry will begin to see the kind of investment that is necessary,’’ he said.

Saraki said with the passage of the bill, “we will block loopholes, we will be able to reduce the areas of corruption, inefficiency and our people will be able to benefit better from the petroleum sector.’’