The President of Nigeria, Muhammadu Buhari, has withheld presidential assent for the Petroleum Industry Governance Bill (the PIGB) and is understood to have requested further amendments to the proposed legislation before he signs the bill into law. It now seems highly unlikely that the PIGB will become law before the elections in February next year. The PIGB is the first of four bills that have replaced the much discussed Petroleum Industry Bill.
The PIGB had passed through both houses of the Nigerian National Assembly (the Senate in May 2017 and the House of Representatives in January 2018). The National Assembly is, in theory at least, empowered by the Nigerian Constitution to pass the bill into law without Presidential assent. If the bill is passed in the form it was sent to the President by a two-thirds majority vote in both houses, the bill automatically becomes a law even without the signature of the President. The more likely course is that the bill will be withdrawn for deliberation on the amendments suggested by the President.
In its current form, the PIGB proposes several important changes to the institutions that administer and regulate the petroleum industry in Nigeria, most notably:
- The break-up of the Nigerian National Petroleum Corporation to be replaced by two new entities: the National Petroleum Company (NPC) and the Nigeria Petroleum Assets Management Company (NPAM) (in broad terms it is proposed that NPAM would oversee interests in production sharing contracts and back-in-rights under the Petroleum Act 1969, and NPC would oversee other upstream ventures, including joint ventures with international oil companies)
- The introduction of a new regulator, the National Petroleum Regulatory Commission that would replace the Department of Petroleum Resources, the Petroleum Inspectorate and the Petroleum Products Pricing Regulatory Agency, and
- The establishment of a Petroleum Equalisation Fund as a separate corporate entity charged with ensuring equilibrium in the price of petroleum products throughout Nigeria
The three other bills arising from what was the Petroleum Industry Bill are the Petroleum Industry Fiscal Bill (which proposes new fiscal terms for investment in and taxation of the petroleum industry), the Petroleum Host and Impacted Communities Development Bill (which proposes the creation of trusts to represent the interests of communities impacted by the petroleum industry) and the Petroleum Industry Administration Bill (which proposes a new upstream petroleum licensing system). Each of the three bills is before the National Assembly but is yet to be passed.