Page 4 - AfrOil Week 27 2021

AfrOil COMMENTARY AfrOil

House leader Femi Gbajabiamila (left), shown on July 1 (Photo: House of

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 about their financial obligations. Additionally,
long time to establish a new legal regime govern- it was substantiated by the urgency with which
WHAT: ing oil and gas operations. government officials spoke about the money the
Both chambers of the It has had ample reason to do so, since the country was losing, as investors opted to focus
National Assembly have existing body of law is outdated. As the Ander- on other venues where they could be certain
passed the PIB in the sen Global consultancy noted last November, about the terms to which they were agreeing.
third reading. Nigeria’s legal regime for the hydrocarbon sec-
tor is still largely based on the Petroleum Profit Background
WHY: Tax (PPT) Act of 1959 and the Petroleum Act of Even so, previous efforts to replace this inade-
The bill will replace an 1969. Both of these acts were adopted at a time quate legal regime failed multiple times.
outdated legal regime when conditions in the industry were quite dif- Previous versions of the PIB failed in 2009,
that has drawn many ferent – when major international oil companies 2012 and 2018. The last of these, known as the
complaints from IOCs.
(IOCs) dominated the scene and Nigeria did Petroleum Industry Governance Bill (PIGB),
not have a national oil company (NOC), when made it all the way through both houses of Nige-
WHAT NEXT: there was little interest in gas, when little thought ria’s National Assembly but was never signed by
Assessing the impact of
the PIB will take time. was given to the prospects for developing local President Muhammadu Buhari, who said he
capacity and when transparency and ESG issues would not endorse it unless certain revisions
were easier to ignore. As a result, they have been were made.
inadequate for some time. When no such revisions were forthcoming,
This inadequacy wasn’t just theoretical Buhari’s administration returned to the draw-
in nature. It was also a practical matter that ing board. Its efforts finally bore fruit last year,
couldn’t be ignored, given the frequency with as the president submitted a new version of the
which IOCs complained about corruption, proposed law, the PIB, to the National Assembly
inadequate transparency and lack of clarity in August 2020.

P4 www. NEWSBASE .com Week 27 07•July•2021