Petroleum Industry Bill

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.

Representatives of the host communities at the Senate public hearing presented a demand for 10% equity participation as was granted under the PIB presented by the Yaradua government.

Public hearing commenced at the Senate earlier today. We missed most of the sessions from the morning due to a delayed flight but will report on the rest of the hearing today and tomorrow.

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

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.

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.

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.

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.

At the 3^rd session of the PIB Education Series, I will be joined by guest speakers – Ms Stella Duru, Partner, Banwo & Ighodalo, Dr Nuhu Habib, Senior Special Assistant to the President on Natural Resources and Dr Dayo Ayoade, Senior Lecturer at the University of Lagos. We will be speaking about Upstream Regulation in the PIB including the new licensing system, ministerial discretion, voluntary conversion from existing licences to the new licenses, gas flaring and the Environmental Remediation Fund amongst others. Please join us by clicking here.