Page 16 - AfrOil Annual Review 2021

AfrOil JULY AfrOil

House leader Femi Gbajabiamila (left), shown on July 1 (Photo: House of Representatives)
At long last, Nigeria passes PIB

Africa’s largest oil producer is on track to adopt a new petroleum law that has been in the

works for more than a decade, but it will take time to assess the impact of this development

NIGERIA’S government has been trying for a inadequate legal regime failed multiple times.
long time to establish a new legal regime govern- Previous versions of the PIB failed in 2009,
WHAT: ing oil and gas operations. 2012 and 2018. The last of these, known as the
Both chambers of the It has had ample reason to do so, since the Petroleum Industry Governance Bill (PIGB),
National Assembly have existing body of law is outdated. As the Ander- made it all the way through both houses of Nige-
passed the PIB in the sen Global consultancy noted last November, ria’s National Assembly but was never signed by
third reading. Nigeria’s legal regime for the hydrocarbon sec- President Muhammadu Buhari, who said he
tor is still largely based on the Petroleum Profit would not endorse it unless certain revisions
WHY: Tax (PPT) Act of 1959 and the Petroleum Act of were made.
The bill will replace an 1969. Both of these acts were adopted at a time When no such revisions were forthcoming,
outdated legal regime
that has drawn many when conditions in the industry were quite dif- Buhari’s administration returned to the draw-
complaints from IOCs. ferent – when major international oil companies ing board. Its efforts finally bore fruit last year,
(IOCs) dominated the scene and Nigeria did as the president submitted a new version of the
WHAT NEXT: not have a national oil company (NOC), when proposed law, the PIB, to the National Assembly
Assessing the impact of there was little interest in gas, when little thought in August 2020.
the PIB will take time. was given to the prospects for developing local At the time, Buhari said he expected mem-
capacity and when transparency and ESG issues bers of the House of Representatives and the
were easier to ignore. As a result, they have been Senate to pass the bill before the end of the year.
inadequate for some time. And initially it appeared that legislators might
This inadequacy wasn’t just theoretical meet this deadline. They passed the PIB in the
in nature. It was also a practical matter that first reading in late September and then passed
couldn’t be ignored, given the frequency with it in the second reading in late October – only to
which IOCs complained about corruption, postpone the third reading indefinitely so that
inadequate transparency and lack of clarity they could concentrate on drawing up a budget
about their financial obligations. Additionally, for 2021. Subsequently, Ahmad Lawan, the pres-
it was substantiated by the urgency with which ident of Nigeria’s Senate, asserted that the delay
government officials spoke about the money the would not be lengthy. He declared in January
country was losing, as investors opted to focus that he expected the National Assembly to pass
on other venues where they could be certain the bill in the third reading in April and then
about the terms to which they were agreeing. send it to the president for signature in May.
Somehow, though, the target date for the
Background third reading kept slipping back – first to May
Even so, previous efforts to replace this and then to June.

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