Omolola Ojo

Omolola Ojo

Nigeria’s Petroleum Industry Nears Experiencing Major Reform with the Passage of a New Oil Bill

Africa’s largest oil producer draws near to the refurbishment of its Petroleum industry as it has just passed a bill –waiting to be signed into law– that would help “promote openness and transparency in the industry by clarifying the rules, processes, and procedures that govern the oil and gas sector.”

Known as the Petroleum Industry Bill (PIB), the legislation was broken up into sections to aid its passage as the House of Representatives passed the first part called the Petroleum Industry Governance Bill (PIGB) on Wednesday.

“The bill is the same bill that was passed in the previous year by the Nigerian Senate” according to a key PIB lawmaker in the House of Representatives, Alhassan Ado Doguwa.

Though the Nigerian oil sector remains a small part of the country’s overall diversified economy, however the sector is still the biggest anchor of its government revenues and foreign exchange.

Completion of the legislation that aims to increase transparency and stimulate growth in Nigeria’s energy sector had experienced a 17-year delay, which according to the Petroleum Minister “created a climate of uncertainty that has cost the country as much as $15 billion a year in lost investment”.

Nigeria’s Senate President, Bukola Saraki noted that “After nearly two decades of back-and-forth, near-misses and ‘near-passages’, the 8th National Assembly finally reached a milestone,” adding that “in June that other two related bills would be enacted by last month” with the promise to pass them “very soon”.

Nigeria’s petroleum production and exploration is taken under the auspices of joint ventures that account for more than 80 percent of its total oil production. This joint ventures between the Nigerian government and foreign multi-national corporations that include Royal Dutch Shell Plc, Exxon Mobil Corp, Chevron Corp., Total SA and Eni SpA  manifests itself as the Nigerian National Petroleum Corporation (NNPC).

The speaker for the House of Representatives Yakubu Dogara noted that “the governance section of the bill deals with management of the Nigerian National Petroleum Corporation ” and added that “the state oil firm NNPC would be unbundled as a result of the legislation going through”.