Petroleum sector’s regulatory law fetches Buhari commendations

Working from home in five days quarantine after returning from the UK, President Muhammadu Buhari has signed the Petroleum Industry Bill 2021 into law prompting an outpouring of commendation from stakeholders, including OPEC.
The President assented to the Bill Monday August 16, in his determination to fulfil his constitutional duty.
The ceremonial part of the new legislation will be done on Wednesday, after the days of mandatory isolation would have been fulfilled.
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, 2021, while the House of Representatives did same on July 16, thus ending a long wait since early 2000s, and notching another high for the Buhari administration.
The act is expected to replace the obsolete Petroleum Act of 1969.
The PIB was first brought to the National Assembly in 2008 but it faced several obstacles while undergoing numerous revisions and debates.
There was some progress in 2015 when the House of Representatives passed a version, but it didn’t go through at the Senate.
In 2015, the Buhari administration proposed passing the PIB in various segments, forming four separate bills (Petroleum Industry Governance Bill, Fiscal Regime Bill, Upstream and Midstream Administration Bill, Petroleum Host Communities Bill).
A hot debate at the National Assembly over allocation to host communities last month typified the contentious nature of the bill.
The Organisation of Petroleum Exporting Countries (OPEC) has congratulated President Buhari for signing the Bill.
The Secretary General Dr Mohammed Barkindo disclosed this in a congratulatory letter in which he said: “I wish to extend my congratulations to you on signing into law the Petroleum Industry Bill (PIB), which marks a significant milestone for Nigeria’s oil industry and an historic achievement for your Presidency.
“With the stroke of a pen, you have inaugurated a new era for the industry following years of legislative efforts to strengthen the legal, regulatory, fiscal and governance framework of the petroleum sector.
“Indeed, the new law will enhance the Nigerian petroleum industry’s reputation, open the door to new investment, and ultimately strengthen its position to meet the world’s growing demand for energy,’’ he said .
He added that the enactment of the legislation was timely as the investment outlook becomes clouded by efforts aimed at accelerating a lower-carbon future.
According to him, the new law will help harness Nigeria’s potential to achieve its programme of raising oil production to 4 mb/d and oil reserves to 40 billion barrels, while also drawing on the country’s vast natural gas reserves to provide clean and efficient energy.
“In addition, these resources will be vital to supplying world markets with a broad portfolio of energy options, and support global efforts to alleviate energy poverty as outlined in the United Nations’ Sustainable Development Goal 7.
“The passage of the PIB by both houses of the National Assembly on 16 July 2021 and your act of signing it into law coincide with another significant milestone in our country’s history – the 50th anniversary of Nigeria’s Membership of OPEC.
“This golden moment provides a unique opportunity to reflect upon Nigeria’s rise as a global energy supplier and partner,’’ he noted
The OPEC scribe said that Since the 24th OPEC Conference on 12 July 1971, when Nigeria received a unanimous and enthusiastic welcome as the 11th Member Country of the Organisation, the country had come to symbolise Africa’s leadership within OPEC and its pivotal support for global oil market stability.
He said that the past year had been a time of enormous challenges for our world, for OPEC and for each Member Country.
“Yet throughout this difficult period, we have demonstrated the enduring importance of OPEC and its timeless commitment to dialogue, cooperation, multilateralism and respect among all nations.
“I wish to express my sincere gratitude for your instrumental support in establishing the Declaration of Cooperation (DoC) that was agreed on 10 December 2016.
“We could not envision at that time how important this framework would become during the COVID-19-related market crisis.
“It enabled bold, swift and decisive actions to address the historically unprecedented market downfall in 2020, and it has been vital to the ongoing efforts to provide a platform for recovery and future growth,’’ he added
Barkindo further commended the president for the support of the Charter of Cooperation, signed on 2 July 2019, noting that it has paved the way for enhanced cooperation beyond the market-balancing efforts by all countries participating in the DoC.
He said that the markets continue to recognise the vital contributions that OPEC and the non-OPEC Participating Countries are making to the market’s recovery, to the global economy as a whole, and to fostering constructive dialogue.
He also congratulated the contributions of Chief Timipre Sylva, Minister of State for Petroleum Resources, to OPEC and the DoC.
“Sylva’s shuttle diplomacy earlier this year as Special Envoy of the Joint Ministerial Monitoring Committee (JMMC) to Congo, Equatorial Guinea, Gabon and South Sudan contributed to the improvement in conformity levels with the voluntary production adjustments and compensation of overproduced volumes.
“ He carried out this important mission with great aplomb and garnered the respect of his fellow Ministers,’’ he said.
“. I am confident the law marks the beginning of a new era of growth and prosperity that will be beneficial to the petroleum industry and ultimately to the Nigerian people.
Other stakeholders in the oil and gas industry have hailed the signing of the Petroleum Industry Bill ( PIB).
Emeritus of Petroleum Economics, Prof. Omowunmi Iledare, said the signing of the PIB 2020 into law was a laudable and noble act.
Iledare, Regional Director, Africa, Society of Petroleum Engineers (SPE), congratulated the Executive and the ninth National Assembly for bringing the wobbling PIB journey since the early 2000s to an end.
He said: “I see in the Act, investment friendly fiscal framework with a well designed regulatory and governance institutions.
“The next phase is implementation without regulatory and institutional captures.
“One can hope for the appointments of competent professionals with diverse work experiences as members of the implementation committee.
“Although, I have no crystal ball, but I am confident the Act stands a good chance to enhance industry value to the economy.”
Also, Mr Olatunji Akinwunmi, Chairman, SPE, Nigeria Council, said the move was a welcome development which would position the Nigeria petroleum industry favorably for the energy transition.
“We in SPE Nigeria Council believe that significant value can be unlocked to the benefit of all stakeholders in a timely manner in the industry with acceleration of exploration and development activities that would be spurred by the signing into law of the PIB,” Akinwunmi said.
On his part, Mr Tunji Oyebanji, Chairman, Major Oil Marketers Association of Nigeria (MOMAN), said it was good that the PIB had been finally signed into laws after years of delay.
Oyebanji said: “My personal thoughts, I guess it’s good that its finally signed. It is definitely a step in the right direction.
“Like all laws, it is not perfect but it is what we have for now. We will work with the authority to make implementation smooth and hopefully address areas of concern.”