Buhari Signs Petroleum Industry Bill into Law Amid Unresolved Issues
The Nigerian President, Muhammadu Buhari, signs into law the controversial petroleum industry bill on Monday amidst unresolved complaints by stakeholders.
President Muhammadu Buhari signed into law an oil overhaul bill that has been in the works for nearly two decades, a presidential spokesman said on Monday.
Today, Femi Adesina, Special Adviser to the President, Media and Publicity, in a statement said Buhari signed the bill while still undergoing isolation having recently returned from the United Kingdom.
Adesina said the ceremonial part of the new legislation would be done on Wednesday, after the days of mandatory isolation would have been fulfilled.
He said: “The Petroleum Industry Act provides legal, governance, regulatory and fiscal framework for the Nigerian petroleum industry, the development of host communities, and related matters.
The Senate had passed the Bill on July 15, while the House of Representatives did same on July 16, thus ending a long wait since the early 2000s, and notching another high for the Buhari administration.”
While some segments laud President Muhammadu Buhari for making this happens after 20 years that the bill was launched. Recall that Nigerian lawmaker cleared PIB for his signature last month amidst controversy.
Major fuel marketers and other observers had been alarmed by a provision that they said could give Africa’s richest man, Aliko Dangote, an effective monopoly on fuel sales in Nigeria while the communities where oil and gas is produced had pressed for a larger share of oil money.
However, some analysts maintain the bill’s approval this year was essential to attract a shrinking pool of capital for fossil fuel development. Amendments to the package allowed a series of concessions for oil companies to lure investment.
The bill’s eventual passage on July 15 by the Nigerian Lawmakers, the majority of whom are Northerners, was darkened with controversy which remained unresolved.
The Act would now allocation of three per cent of revenue to host communities in the Niger Delta, while a fund for the exploration of oil in frontier basins, mostly in northern states, received 30 per cent.
The petroleum law calls for 30% of the Nigerian National Petroleum Corporation’s (NNPC) profit from petroleum sharing contracts to be spent on frontier exploration.
The near-term effects of this on revenues remitted by the company to the government are uncertain, but it could help raise production in the longer term, Fitch Ratings said in a report.
However, it was noted that the full impact will also depend on the details and implementation of the fiscal regime for international oil companies, as joint ventures between the NNPC and international oil companies’ account for the bulk of new exploration and production activity.
Contention exists around the share of oil revenue to be distributed to oil-producing communities. The bill indicates a share of around 3%, lower than the 5% level in an earlier version of the legislation passed previously by the lower house of parliament – or the even higher levels demanded by some representatives of the communities.
The PIB mandates the formation of Host Community Development Trust Funds, aimed at ensuring the funding is used to address the communities’ concerns.
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Buhari Signs Petroleum Industry Bill into Law Amid Unresolved Issues
