AfrOil: Nigeria passes PIB at long last

Both houses of Nigeria’s National Assembly voted on July 1 to pass the Petroleum Industry Bill (PIB), which will serve as the country’s new oil and gas law. The legislation will now be sent to President Muhammadu Buhari, who is expected to sign it into law in the near future.

The passage of the PIB marks the successful conclusion of a long and arduous campaign to reform the legal regime governing oil and gas operations. The existing body of law is still largely based on the Petroleum Profit Tax (PPT) Act of 1959 and the Petroleum Act of 1969, and previous efforts to replace these laws failed multiple times. Previous versions of the PIB failed in 2009, 2012 and 2018 – much to the dismay of foreign investors, which have complained repeatedly about corruption, inadequate transparency and lack of clarity about their financial obligations.

The bill is designed to remedy these deficiencies, thereby helping Nigeria to attract and retain investment to oil and gas projects. It aims to accomplish this task partly through regulatory measures, such as the establishment of a new state agency to oversee midstream and downstream operations, and partly through corporate reforms, such as the transformation of Nigerian National Petroleum Corp. (NNPC) into a limited liability corporation that does not receive funds directly from the government.