Tag: National Assembly

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Supremacy Battle Between Presidency, N’Assembly Stalls Legislation on PIB

There are indications that the passage of the PIB may be nowhere is sight as information gathered from ThisDay suggests that the delay in the passage of the Bill is actually due to internal wrangling between the National Assembly and the Executive, a power play centered around which arm of government is responsible for the passage of the Bill. This is in addition to the unresolved issue of the inclusion or otherwise of the host community fund in the Bill. The report decried this debacle calling it a major embarrassment for Nigeria in view of the landmark passage of a similar Bill by Ghana’s parliament last week.

The paper went on to report that the Group Managing Director (GMD) of NNPC, Dr. Maikanti Baru has promised to continue with the reform initiatives started by the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, and further grow the fortunes of NNPC by focusing on a 12-point agenda, which includes security of oil installations, the new business models, joint venture cash calls, production and reserve growth, growth of the Nigerian Petroleum Development Company (NPDC), gas development, oil and gas infrastructure, and refinery upgrade and expansion.

 

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AN ANALYSIS OF THE PETROLEUM INDUSTRY GOVERNANCE BILL 2016 – POWERS OF THE MINISTER

A review of the Petroleum Industry Governance Bill 2016 (“the Bill”), which we reported last week passed first reading on the floor of the Senate shows that it largely retains the content of the first version, introduced late last year as the Petroleum Industry Governance and Institutional Framework Bill 2015, with a few amendments. The renewed attention given to the Petroleum Industry Bill (“PIB”) by the National Assembly by sponsoring this Bill is an indication of the lawmakers’ dissatisfaction with the seeming silence of the Executive on the matter.

Part One of this review focuses on the functions and powers of the Minister.

THE MINISTER

The Bill provides for the functions and powers of the Minister in two sections. Under Section 2(1) paragraphs a-i, the Minister is vested with eight functions similar to those provided in Section 6 of the PIB save for three distinct departures. The power to delegate is conferred under Section 2(2) whilst Section 3 addresses the Minister’s right of pre-emption.

  1. The Bill has done away with the Minister’s advisory and approval role stipulated in the PIB before the President can appoint the Board of the various agencies. The President is empowered to appoint the executive and non-executive members of the Board of the Petroleum Regulatory Commission (the “Commission”) (to be established pursuant to the Bill as the industry regulator) subject to confirmation of the Senate. This is a laudable improvement to the old Bill and extant legislation where the Chief executive of the Petroleum Inspectorate is appointed by the Petroleum Minister, (albeit with the approval of the National Council of Ministers) and is also subject to the direction and control of the Minister (and by extension, the Department of Petroleum Resources (“DPR”) and its Director General).
  1. The power to make regulations which is currently vested in the Minister by virtue of Section 9 of the Petroleum Act and maintained by the PIB has been removed and vested instead in the Commission as the regulatory body for the industry by Section 8(1) of the Bill. This provision deals specifically with regulations necessary to give proper effect to the provisions of the Bill and would not affect the provisions of other laws which grant the Minister powers to make regulations such as, the Nigerian Oil and Gas Industry Content Development Act, 2010. It is also worth noting that the Bill empowers the Minister to promote the development of local content in the Nigerian petroleum industry.
  1. Although the Bill maintains the Minister’s rights of pre-emption, a notable change has been made to this provision which is in keeping with current economic realities. Failure to comply with the Minister’s direction issued in respect of a right of pre-emption to petroleum and petroleum products brought on by a state of national emergency or war and obstruction or interference with the exercise of the powers of the Minister in this regard under the Petroleum Act attracted a maximum fine of NGN2,000 and NGN200 or a maximum prison term of six months or both respectively upon conviction. Under the PIB, the maximum fines for the two offences have been increased to NGN2,500,000 and NGN5,000,000 or a maximum prison term of two years or both respectively. The Bill however increases the fine for non-compliance to a maximum of NGN10,000,000 or a maximum prison term of six months or both; and for obstruction, a maximum of NGN5,000,000 or a maximum prison term of six months or both. The Minister is also empowered to make regulation to increase the financial penalties imposed under the Bill.

Under extant legislation, the Petroleum Act grants the Minister exclusive and unfettered power to grant licenses and leases and amend, renew, extend or revoke same pursuant to the provisions of the Act. The Bill, much like the PIB (save for the replacement of the word “advice” with “recommendation”), fetters the discretion of the Minister to issue licenses and leases for petroleum exploration and production activities. The Minister may now only exercise such powers based on the recommendation of the Commission. Currently, the grant of licenses is governed by the Petroleum (Drilling and Production) Regulations and applications are made to the Minister. It appears this would no longer be the case and such applications would now be required to be made to the Commission. Section 25 of the Petroleum Act entrusts the Minister with discretionary powers to revoke a license or lease based on certain criteria. Under the Bill, this power may only be exercised based on recommendations made by the Commission in this regard. Accordingly, Part 6, Section 84(1) of the Bill provides that the provisions of all existing enactments or laws, including the Petroleum Act, Petroleum Profit Tax Act and the Companies and Allied Matters Act, shall be read with such modifications so as to bring them into conformity with the Bill. We expect that regulations would be made which clearly defines new procedures to be adopted.

In our next report, we will continue with an analysis of the proposed sector regulator, the Petroleum Regulatory Commission.

 

 

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House of Representatives Move to Minimise Executive Discretion under the PIB

ThisDay and Leadership report that the House of Representatives’ Ad-hoc Committee on the PIB has recommended that the President’s discretionary powers to award licenses or leases, as well as the Minister of Petroleum Resources’ control over relevant regulatory agencies, be removed.

The recommendations, which are contained in the executive summary of the Committee’s report on the Bill, also seek to extend the coverage of the Petroleum Host Community Fund to communities where oil and gas installations are located.

The Committee will present its report on the PIB when the House reconvenes on March 31, 2015.

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PIB to pass before current N. Assembly’s tenure ends – Mark, Ogor

ThisDay reports that Senate President, David Mark, and Deputy Leader of the House of Representatives, Leo Oguweh Ogor, have reassured the public of the National Assembly’s commitment to pass the Petroleum Industry Bill (“PIB”) before the tenure of the current assembly ends in June 2015.

The relevant committees of both houses are yet to present their reports on the Bill subsequent to the public hearings conducted in 2013.

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Splitting up PIB not in Nigeria’s Interest says PENGASSAN

Reacting to the Minister of Petroleum’s suggestion that the Petroleum Industry Bill be split up to ensure prompt passage, the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has retorted that such suggestion would not be in the interest of the country. The association maintained that the provisions, as contained in the current Bill, are capable of transforming the industry and in particular, grow the upstream sector.

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David Mark orders Senate Joint Committee on PIB to conclude deliberations

Following a Point of Order raised by the Senator representing the Ekiti-North senatorial zone, Senator Olubunmi A. Adetunbi, the Senate President, David Mark, gave orders that the Senate’s Joint Committee on the Petroleum Industry Bill (“PIB”) conclude work on the Bill and return same to the Senate for prompt passage.

It was reported that Senator Adetunbi’s plea was prompted after he was put on the spot at a function he attended. At the occasion, the Senate was accused of toying with critical issues affecting the economy especially the PIB.

It will be recalled that the PIB was committed to the Senate’s Joint Committee for deliberations on Thursday, March 7, 2013.

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HOUSE OF REPRESENTATIVES AND SENATE HOLD FINAL PUBLIC HEARING ON PIB

The House of Representatives’ Ad-hoc Committee on the Petroleum Industry Bill (“PIB”) in a communiqué issued on Monday, July 8, 2013, has notified the general public of its final public hearing on the Bill.

Members of the public, especially industry stakeholders, professional / interest groups, host communities, state and local governments, have been invited to make representations to the Ad-hoc Committee on the PIB on Wednesday, 9th and Thursday, 10th July 2013 at the New Wing of the House of Representatives National Assembly Complex, Abuja. All memoranda on the Bill are required to be typed, hardcover bound and produced in twenty (20) copies.

The House of Representatives’ hearing is to be followed by a two-day public hearing by the Senate’s Joint Committee on the PIB.

The Senate’s public hearing, taking place on Tuesday, 16th and Wednesday, 17th July, 2013 at Conference Room 022, New Senate Wing National Assembly Complex, is to host the Minister of Petroleum Resources, the 36 State Governors as well as heads of government Ministries, Departments and Agencies on the first day, and on the second day, Managing Directors of International and National Oil Companies, the Nigerian Labour Congress, Petroleum Marketers, industry stake holders and members of the public.

Stakeholders and interested members of the public willing to make representations on the Bill to the Senate’s Joint Committee are required to submit their memoranda in fifty (50) hard copies and one (1) soft copy to the Committee’s Secretariat in Room SB 10 (Red Carpet), (White House), the Senate National Assembly Complex, Abuja on or before Thursday 11th July, 2013.

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PIB SENATE COMMITTEES TO REPORT TO THE SENATE IN 6 WEEKS

It has been reported (here and here) that the Petroleum Industry Bill (PIB) on Thursday, March 6, 2013, scaled through the Second Reading on the floor of the Senate and has been passed on to the Senate Committees on Petroleum (Upstream and Downstream), Gas and Judiciary, Human Rights and Legal Matters.

Senators Emmanuel Paulker (Bayelsa Central), Chairman Committee on Petroleum(Upstream); Magnus Abe (Rivers South/East), Chairman Committee on Petroleum(Downstream); Nkechi Justina Nwaogu (Abia Central), Chairman Gas Committee; and Umaru Dahiru (Sokoto South), Chairman Committee on Judiciary, Human Rights and Legal Matters are charged with collating the views of the Senate on the Bill together with those of the public, which would be received through public hearings, and report same to the House within six (6) weeks.

The Senate President, David Mark commended the accord shown by his colleagues in getting the Bill passed to the Committee Stage and expressed his delight that the Bill had enjoyed robust debate as no fewer than 81 Senators had made contributions on the Bill over the past 3 days.

Mark summarized the general issues the Senate had with the Bill as:

  1. The provision for a Petroleum      Host Community Fund;
  2. The insufficiency with regards      frontier exploration; and
  3. The excessive powers of the Minister      of Petroleum.

He also made note as to the impracticability of certain portions of the Bill such as the Bill exempting the Nigerian National Petroleum Corporation (NNPC) assets to be privatized from provisions of the Public Procurement Act.

Although he pointed out that the Bill was a “worthy Bill”, he also mentioned that no Bill had come through the Senate and not been tinkered with. He assured the House that subsequent to the public hearings, “amendments, additions and subtractions” will be made to the legislation.

 

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DAY 2: SECOND READING OF THE PIB

Wednesday, March 6, 2013 saw the second reading of the Petroleum Industry Bill (PIB) on the floor of the Senate enter into its second day. (Reported here and here).

Deliberations once again centered on the controversial 10 per cent allotted for the Petroleum Host Community Fund (PHCF).

Senate Committee Head on Rules and Business, Ita Enang (Akwa Ibom North East) in refuting the collective opposition by Northern Senators to further funding of oil producing regions through the PHCF, introduced another dimension to the debate by alleging that over 83 per cent of the indigenous acreage allotted in the Niger Delta were given to individuals from the North-East and North-West geo-political zones while the rest were distributed amongst individuals from the South-East and South-West which effectively returned most of the proceeds on investment in the Niger Delta to the North. He then called for the revocation and reallocation of oil blocks in line with the federal character principle. Adding his support to Enang’s view, Senator James Manager (Delta South), warned against withdrawing the Fund as it may breed the return of militants to the creeks, whilst Senator George Thompson Sekibo (Rivers) maintained that the money from the fund was not meant for the South-South region alone.

Senator Abdulahi Adamu (Nasarawa West) while accepting the spirit behind the reforms in the oil and gas sector asked that caution be exercised in the moves to privatise the National Oil Company as a lack of transparency and accountability could jeopardize the process.

Senator Olufemi Lanlehin (Oyo South) voiced concerns about Section 191 of the Bill which gave the President discretionary powers to grant licenses. He expressed worry that the Bill did not place any limitations on this discretionary power by the President.

An area that garnered support from Senators from both Northern and Southern divides was the need to provide adequate funding and support frontier exploration. Senator Manager was of the view that oil exploration in other states would contain the bickering over the PHCF incentives.