The Senate’s Joint Committee on the Petroleum Industry Bill (PIB), yesterday, July 18, 2013, held the first of its two-day public hearing on the Bill.

As reported in ThisDay and the Guardian, stakeholders in the petroleum industry (including the Minister of Petroleum Resources, State Governors and representatives of both government parastatals and oil companies) made their presentations on the Bill before the Senate’s Joint Committee.

International and local oil companies under the auspices of Oil Producers Trade Section (OPTS) opposed the passage of the PIB in its current state. In a presentation made by the Managing Director, Mobil Producing Nigeria, Mr. Mark Ward, the OPTS said the PIB fell short of addressing the challenges in the oil industry.

He observed that the Bill sought to significantly increase royalties and taxes making Nigeria one of the harshest fiscal regimes in the world, a situation that will culminate in the country, as an oil and gas producing region, becoming uncompetitive as projects will now become uneconomical.

Given the enormous expenditure required to develop gas infrastructure, he also opined that an incentive-based approach to domestic gas supply obligations will be required to jump start Nigeria’s much needed gas revolution.

According to him, while OPTS supports the objectives of the Bill and the reforms it seeks, the Bill as drafted will fail in delivering such objectives and will reduce the oil and gas industry contributions to the Nigerian economy.

The Nigeria Extractive Industry Transparency International (NEITI), in its submissions, explained that for effective regulation of the industry, it was necessary to reduce the powers of the Minister and ensure the creation of autonomous institutions that would promote effective governance and control in the management of Nigeria’s petroleum resources.

NEITI also noted that the Bill did little to protect the Nigerian environment. They insisted that the Bill should provide minimum environmental standards in the relationship between Operators in the sector and the environment.

The Revenue Mobilization Allocation and Fiscal Commission (RMAFC), in its presentation, opposed the Bill’s provision mandating a ten per cent (10%)  contribution of Operator profits to the Petroleum Host Community Fund (PHCF). The Commission instead advocated exploring the open-ended opportunity available under the Constitution vis-a-vis the provision stipulating that a minimum of thirteen per cent (13%) of the revenue accruing from the Federation Account be paid to oil producing States. They also recommended that the Bill provide for the remittance of revenue by petroleum regulatory agencies into the Commission’s account.

RMAFC’s position on the PHCF was supported by the Governors of Niger and Kaduna State who described its conception as the most controversial of the entire Bill’s provision.

The Honorable Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, in her presentation, said it would take about five years before the provisions of the Bill could be fully implemented. She urged stakeholders not to personalise or politicise the Bill adding that the PIB was put together in the interest of the nation.

She downplayed beliefs that the Bill accorded enormous powers to the Minister, stressing that the current Petroleum Act actually vested more powers in the office.

She further added that “Whilst we take best practices from other developed regions, we should also work within the understanding of our own socio-economic and social-cultural norms, and create entities and policies that will work and are not destined to fail from the word-go.”

The Minister also noted that the PHCF was proposed to mitigate the human and environmental conditions in oil producing regions and to assuage the feelings of the host communities towards oil and gas companies.

Declaring the hearing open, the Senate President, David Mark, promised that the National Assembly would facilitate the passage of the bill, noting that the pursuit of the Bill must be a win-win situation.

He however urged that: “Oil companies should not take undue advantage of Nigeria. What I do not want is when people begin to threaten that if you do not do this, we will park out of Nigeria. That is not the correct thing. We are conscious of the fact that there is frustration in the oil industry”.




The Senate’s two-day Petroleum Industry Bill (“PIB”) public hearing session, initially slated for July 16 and July 17, 2013, has been moved to Thursday, July 18 and Friday, July 19, 2013.

The hearings were moved as a result of the Senate’s planned vote on Constitutional amendment and  a valedictory session in honor of the late Senator Pius Ewherido both taking place on the 16th and 17th of July respectively.

The Senate’s hearing will now come up exactly one week after the House of Representatives’ final public hearing on the Bill.

Although hearings failed to hold on Wednesday, July 10 as initial stated, the House of Representatives, on the second day of hearings, played host to a cross-section of stakeholders in the oil and gas industry made up of the National Union of Petroleum and Gas Workers Association (NUPENG), Petroleum and Natural Gas Senior Staff Association (PENGASSAN) and other interested stakeholders as reported.

Both NUPENG and PENGASSAN, in a joint presentation, submitted that the Bill conferred excessive powers on the Minister and as such encroached on the powers of the Regulators. The Unions’ position was also shared by Malam Nasir Ahmed El-Rufai.

Speaking in his capacity as Director of the Centre for Africa’s Progress and Prosperity (“CAPP”), El-Rufai suggested that Joint Ventures be incorporated and quoted on the stock exchange to encourage Nigerian’s participation in the petroleum industry. He also panned the President’s indiscriminate powers to allocate acreages.

The General Manager (Commercial), Shell Exploration and Production Africa, Marc den Hartog, said the company “fully supports the aspirations of government as contained in the PIB.” He however suggested that the PIB clearly define the roles and responsibilities of entities, especially those of the Regulators so as to avoid overlaps and conflicts.

NEITI’s Executive Secretary, Hajiya Zainab Ahmed, suggested that the PIB provide for a public register of corporate entities that bid for, operate or invest in petroleum upstream assets, including the identities of their beneficial owners and their levels of ownership. She also urged for provisions that would allow for cash-call payments for Joint Ventures as a first line charge on the Federation Account. “This means that the federal government’s share of the expenses for JV operation would be paid based on agreed work-plan and budgets directly from the Federation Account, prior to other disbursements from the said account,” she said.


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.