The Senate Joint Committee on the Petroleum Industry Bill, PIB, yesterday, disclosed that it has finished working on the Bill and is proposing a privatisation of Nigeria’s four refineries two years after the passage of the Bill.
Speaking at a PIB Roundtable in Abuja, a Principal Consultant to the Senate Joint Committee on the PIB, Mr. Francis Adigwe and Mr. Uzor Azubuike, a member of the House Committee on the PIB, also disclosed that work has been concluded on the Bill and it might be laid on Thursday and by next week, in the House and Senate respectively.
Specifically, Adigwe told participants at the Roundtable that the bill has been finalised, while the work of the joint committee has been concluded and the final print is with the Senate.
He said the committee had set up a mechanism for the liberalisation and deregulation of the downstream sector in the Bill, such as the sale of the refineries within two years after the passage of the PIB.
According to him, the Bill to be laid before the Senate makes provision for the Petroleum Equalisation Fund, PEF, to be scrapped immediately the downstream petroleum sector is deregulated, while the Federal Government’s stake in the company that will emerge from the Nigerian National Petroleum Corporation, NNPC, will be disposed off through the Nigerian Stock Exchange, NSE.
He said, “In the Bill, we set up a fund for abandonment and decommissioning. That is, every company that gets a licence or lease to operate an oil asset will be required to pay certain amount into that fund. This is because environmental management requires huge fund.
“Also a section on Frontier Exploration was introduced. This was not in the original Bill brought before the Senate. The Bill is proposing the setting up of an agency, with adequate funding, to cater for frontier fields.
“However, we included Sunset Clauses, regarding the life span of the agency in charge of the frontier fields, especially when all the fields reach the end of their productive lives.”
Adigwe further stated that the Bill to be laid before the Senate contains incentives for investors that are planning to build refineries, such as crude oil supply to the refineries, among others.
He also disclosed that a section of the Bill deals with Open Access and Third Party Assets, making it possible for private investors to access existing pipeline network and depots and also build and operate their own pipelines and depots.
He defended the powers given to the Presidency to award oil blocks on a discretionary basis, saying that the world over, the President has the powers to award blocks on discretionary basis, based on certain criteria, such as economic development and promotion of local content.
However, he said the PIB to be laid before the Senate, allows for the discretionary award of oil well based on national interest.
He said, “The Bill also provides that if an individual is found to use his position to get awards of blocks illegally, the block can be revoked anytime in the future when it is discovered.”
Also speaking, Honourable Uzor Azubuike, member of the House Committee on PIB, said the Bill has been processed, the technical committee has finished their work and the Bill is ready, remaining to be laid before the entire members of the House of Representatives.
He said the Bill will likely be tabled before the House on Thursday, adding that the House is committed to passing the Bill before the end of the current legislative assembly.
Azubuike said the committee was able to put a timeline for subsidy removal and complete deregulation of the sector, going by the fact that the original Bill submitted to the House did not disclose any timeline for the removal.
Continuing, he said, “The Bill puts a timeline on the divestment of government’s holding in the Nigerian National Petroleum Corporation, not exceeding a period of six years.”
