Live Blogging the Senate Public Hearing

Good morning. Day 2 of the public hearing starts with the representative of the Rivers State Government. Points made include:

  1. Petroleum should be vested in the Federal Government and the petroleum producing states;
  2. Petroleum producing states should nominate members to the Upstream Petroleum Regulatory Commission;
  3. The Upstream Regulatory Commission should not be responsible for frontier exploration;
  4. Midstream Gas Infrastructure Fund should be expunged;
  5. Petroleum data should belong to both the federal government and the government of the petroleum producing states;
  6. NNPC’s shares should not be sold and any decision regarding the disposal of assets should be made with the approval of the petroleum producing states.

The second set of presentations is being given by the Host Community Association:

  1. Host communities as a critical stakeholder should be granted a 10% equity position in all licenses – 5% from the government and 5% from investors;
  2. Gas flaring fees and penalties should be transferred to the host communities.
  3. The Bill should ensure that there is host community participation in environmental issues;
  4. Ensure that the principles of sustainable development is enshrined in the Bill;
  5. Establish a national body called Oil and Gas Producing Development Commission, which should be replicated at the States and Local Government levels;
  6. 25% of Royalties from Upstream production should go to the Host Communities;

The representatives of DAPPMAN:

  1. Expunge the levy imposed on the wholesale price of petroleum products;
  2. Regulatory decisions should be made on a level playing field;
  3. Board of the Authority should include senior industry representatives;
  4. All provisions in relation to the regulation petroleum product pricing should be deleted and prices should be determined by the market;
  5. Tariff regulation also not necessary because there is sufficient competition in the petroleum products market;
  6. PIB should include minimum license terms for the downstream sector;
  7. Competition regulation should be exercised by the Federal Competition regulator;
  8. Third party access provisions should only relate to uncontracted capacity;
  9. Storage depots should not be required to contribute to the host community funds as they are low margin businesses.

National Oil Spill Detection and Response Agency:

  1. Concerned about the powers granted to the Commission and the Authority in relation to environmental matters;
  2. Environmental functions should remain in the hands of the Ministry of Environment;
  3. Environmental management plan provisions conflict with the general environmental impact assessment provisions.

Petroleum Technology Association of Nigeria:

  1. This bill does not promote local content;
  2. The Commission and the Authority should be merged;
  3. The power to revoke and assign licenses should not be delegable;
  4. NCDMB and PETAN should be included in the board of the Commission and the PETAN should be included on the board of the Authority.

AELEX:

  1. The Bill should follow the existing government policy and adopt the single regulator model;

KPMG presentation

Very important for Nigeria to pass a bill that is realistic.

KPMG believes that the provisions on cost price ratio will harm investment.

NDDC no longer relevant and host community funds should be deducted from the contribution to NDDC funds.

Environmental remediation fund is not necessary.

Voluntary conversion from current licenses to the new licenses created under the PIB is not truly voluntary given the time within which it must be done.

The PIB should not mandate the formation of new companies to takeover existing midstream operations of licensees.

Stakeholders and General Public Hearing on the Petroleum Industry Bill 2020

The Chairman and Members of the Committee welcome all Stakeholders and the General Public to a 2-Day Public Hearing on the:

*PETROLEUM INDUSTRY BILL (PIB), 2020 (SB. 510)*


Scheduled as follows:
Date: Monday, 25th – Tuesday, 26th January, 2020.
Venue: Senate Conference Room 231, Senate Building, National Assembly Complex, Abuja.
Time: 10:00am

Join the Meeting
https://us02web.zoom.us/j/5700690990?pwd=ZS9oNFMrNlNCOWlTWld0TEhRRmJQZz09

*Meeting ID: 873 1402 5548

*Passcode: 292611

If you have any question, please send it to:

publichearingonpib2021@gmail.com

PIB Education Series – Session 6: 4pm WAT 10/12/20

At the 6th session of the PIB Education Series, I will be joined by guest speakers – Dr Ekpen Omonbude, Managing Director, Eraskon Nigeria Limited and Dr Gboyega Oladele, Chief Financial Officer, Vertex Energy Limited. We will be speaking about the New PIB Fiscal Framework including the components of the fiscal system, dual royalty regime, dual tax system (Nigerian Hydrocarbon tax and Companies Income Tax), allowable deductions, Conversion, Cost Price Ratio Limit, ascertainment of total profits and consolidation for tax purposes amongst others. Please join us by clicking this link.

PIB Education Series – Session 5: Host Community in the PIB

On Thursday, December 3 2020, I spoke with Mrs. Funmi Ogbue, CEO, Zigma Limited; Dr. Francis Adigwe, PIB Consultant to the Nigerian Senate; and Dr. Obinna Dike, Assistant Professor of Law, American University of Nigeria, on Host Community in the PIB. We discussed the background of host community, identification of host communities, sources of funding and allocation of host community funds, governance structure of the Host Community Development Trust, host community needs assessment and development plan. You may watch the video of the session below.

https://www.youtube.com/watch?v=AVd-O02_B-8

PIB Education Series – Session 4: Midstream & Downstream Regulation in the PIB

We had an amazing session talking with Ms. Ronke Onadeko, Principal Consultant, DRNL Consult Ltd, UK; Mr. Gbite Adeniji, Partner, Advisory Legal Consultants; Mrs. Ogechi Nkwoji, Head Economic Intelligence Research and Regulation, MOMAN; and Engr. Chichi Emenike, Head, Gas Ventures, Neconde Energy Limited on the Midstream & Downstream Regulation in the PIB.

Key points from the discussion include:

  1. There should be no template or framework for the pricing of petroleum products, if we are truly operating a deregulated market. The prices should be determined by demand & supply in the market, input prices, and potential or required return on investments amongst others.
  2. The PIB should not set the price of gas, as this will prove to be a disincentive for gas business in Nigeria. Gas prices should be determined in a “willing buyer – willing seller relationship”.
  3. The PIB needs to address importation of petroleum products.

Watch a video of the session below.

https://www.youtube.com/watch?v=6FgN0kBaw2w

PIB 2020 passes 2nd reading at the Nigerian House of Representatives

The Petroleum Industry Bill 2020 passed the second reading at the Nigerian House of Representatives and has now been referred to the House’s Ad Hoc Committee on the Petroleum Industry Bill. This comes a few weeks after the Senate passed the same bill through second reading. Given that the year is winding down, it is likely that any public hearing on the Bill will hold in January 2021.

Watch PIB Education Series Episode 3

On Thursday, November 19 2020, I spoke with Ms Stella Duru, Partner, Banwo & Ighodalo; Dr Nuhu Habib, Special Assistant to the President on Natural Resources; and Dr Dayo Ayoade, Senior Lecturer of the University of Lagos, on Upstream Regulation in the PIB 2020. We discussed the new acreage management system, ministerial discretion in the award of licenses, the option to convert existing licences to the new licenses and the requirement for both the Environmental Remediation Fund and the Decommissioning & Abandonment Fund. You may watch the video below.

https://www.youtube.com/watch?v=XM1NSnO1hRc