Petroleum Industry Bill

FOR the second time in 20 years, the Petroleum Industry Bill, PIB, has been passed by the National Assembly, NASS. In 2018, it was passed as the Petroleum Industry Governance Bill, PIG-B, but President Muhammadu Buhari refused it assent, citing alleged constitutional issues. Political and sectional interests have been the major reasons for the long tenure of the Bill at the NASS.

Due to the absence of an enabling law that meets the contemporary needs of the oil industry in a very competitive world market, Nigeria has been denied billions of dollars new investments and income heading to Africa every year. If this Bill becomes law, it is hoped that many of these issues will be addressed.

The unbundling of the Nigerian National Petroleum Corporation, NNPC, and the protocols laid out to tackle gas flaring and other environmental consequences of production will prove revolutionary if faithfully implemented.

The major point of interest in this editorial is the three per cent set aside in the Bill for the host communities. Unlike the 13 per cent which was constitutionally committed to the oil states as derivation royalties, this three per cent will be deducted from the annual operational expenses, OP-EX, of the oil companies and allocated to the Host Communities Development Trust, HCDT.


Niger Delta host community agitators had favoured at least 10 per cent, but the NASS Joint Committee had proposed five per cent. It was during the clause-by-clause consideration that it was conspiratorially reduced to three per cent, and the Senate President, Ahmed Lawan, used the power of his office to railroad it in spite of valiant efforts by Senators George Sekibo (Rivers) and James Manager (Delta). This has sparked anger among the Niger Delta advocates who have described it as “an insult”.

To complicate matters further, a part of the Bill provides that any vandalisation of oil facilities will be addressed with funds from the three per cent set aside for host community development. The problem with this is that, with the Niger Delta full of myriads of autonomous “militant” and pirate elements, the anger generated by this callous disregard of the needs of the host communities and the struggle for their various interests to be “accommodated” within this paltry sum might simply worsen vandalisation.

The ideal thing is for the nation to gravitate more towards total resource control and payment of adequate royalties to the national purse. We had expected the PIB to give the host communities a greater sense of ownership in the industry. Instead of that, our national lawmakers simply rode roughshod over the interests of the host communities. That is unacceptable.

We believe that there is still time to dialogue over this matter and ensure that the host communities are given a greater sense of belonging while the operations of the oil companies remain profitable and competitive.

This can be peacefully resolved.

Vanguard News Nigeria


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