Tag: PIB news

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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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Petroleum Industry Governance Bill 2016 Passes First Reading

It was reported that the Petroleum Industry Governance Bill 2016 passed first reading on the floor of the Senate yesterday, April 13, 2016 as the upper chamber deliberated on this version of the PIB amongst other oil and gas sector issues.

As we had earlier reported, this version of the PIB is not a one stop shop version for all issues relating to petroleum regulation like the previous versions, but rather tackles specifically, the institutional and governance structure of the petroleum industry.

Continue reading “Petroleum Industry Governance Bill 2016 Passes First Reading”

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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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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.