Last week we reported that the President withheld his assent to the Petroleum Industry Governance Bill (PIGB). At the time of our report, the news coverage had focused on the President rejecting the Bill because it “whittled down his powers.” Since then, there have been various reports on the refusal of the President to assent to the first of four bills seeking to reform the Nigerian oil and gas industry. We review some of these reports here. Continue reading “PIGB Assent: What has Happened Since?”
This summary has been provided to us by Sandra Gini.
- Hearing opens at 11:20am
- National Anthem and opening prayers
- Opening remarks by Senator Marafa
- Senate President Bukola Saraki delivers opening speech and declares the hearing officially open.
- Senator Alaosadura thanks the Senate President
The Senate public hearing on petroleum industry reforms was closed at 2:00 pm by the Chairman of the Joint Committee, Senator Marafa who emphasised the resolve of the National Assembly to pass these bills imminently.
We will publish a summary of the presentations given on Day 1 before our live blogging commenced.
- Administration Bill
- No commission in the world seats without supervision;
- Like dormant fields concept – but should be set aside for indigenous companies;
- transparency provisions should be bolstered;
- strategic stocks should not be handled by the Commission.
- Host Community Bill
- should be limited to upstream and downstream;
- host community fund will attract a lot of attention – must not impose an additive burden on the industry;
- contracting opportunities should be made available for indigenes of the host community;
- definitions of host community should be fine-tuned.
- Fiscal Bill
- fiscal operating conditions should be right;
- average returns are currently high;
- want a dual tax regime;
- cost curtailment needs to be embedded in the bill;
- no tax incentives for acquisitions.
The Senate public hearing commenced at 12:40
Natural Resource Governance Institute – PIAB
- include checks in the presidential discretionary award of licences;
- introduce beneficial ownership;
- emphasise issues of transparency in asset register;
- clear guidelines on bidding rounds.
Petroleum Training Institute Effurun
- want to be included in the bill
Nigeria Gas Association
- fiscal terms to be reduced and incentives to be provided for gas development;
- AGFA should be retained;
- cost efficiency factor should not be applied to gas development;
- need for clarity in the definition of upstream and midstream;
- worked examples should be included in the fiscal bill;
- specific provisions for marginal fields and indigenous companies.
- third party access may discourage investment;
- bill does not make provisions for entities in Free Trade Zones;
- clarity on the host community provisions;
- clear tenor for the advisory committee in the petroleum host community bill.
Below are links to a few articles published on the petroleum industry reforms today.
- Bitumen should be categorised as hydrocarbon;
- deep offshore to be amended to 200 nautical miles as opposed to 200 metres water depth as currently defined.
- gas flaring penalties to be transferred to the host communities;
- oil companies should be located in the states where they are producing
Joint memorandum between Delta State government and its host communities
- settlor and communities should appoint the trustees
- trusts should be established within 3 months
- 5% of gross revenue;
- 50% of gas flaring penalties should be given to the host communities;
- take off grant to include 20% of license fee;
- objective should include creation of employment opportunities;
- members of the board of trustees should serve for only 4 years;
- secretary of the board of trustees should come from the host state;
- allocation of a specific sum for traditional rulers and for the management of the fund;
- surveillance contractors should be appointed in consultation with the host communities;
- state governments should be involved in dispute resolutions;
- legacy projects should be split into phases;
- Relationship should be a tripartite relationship between FG, Host Community & Oil Companies;
- 10% equity partnership;
- Representatives in the board and management committees of oil companies;
- No multiple trusts with various oil communities;
- A National trust fund should be administered by Hostcom and traditional rulers;
- Hostcom to nominate those who will be responsible for managing the funds;
- Hostcom should serve on the board of the regulatory commission;
- IOCs must set up refineries in Nigeria;
- Gas flaring penalties should be paid to Host Communities;
- Communities should not be penalised for pipeline vandalism;
- Nigeria must control majority shareholding in the national oil company;
- Hostcom must be included in every government institution;
- Host communities must have the first right of refusal in any privatisation.