Nigeria’s House of Representatives has passed the Petroleum Industry Governance Bill (PIGB), after a third reading, on January 17. The bill will fundamentally rewrite a number of aspects of Nigeria’s oil and gas sector, most notably breaking up the unwieldy Nigerian National Petroleum Corp. (NNPC).
As both houses passed the same version, the bill can go to the president to be signed into law. A joint committee has been formed to monitor the bill.
The speaker of the House of Representatives, Yakubu Dogara, called for Nigerian President Muhammadu Buhari to sign the PIGB into law as a matter of urgency. The bill is expected to be passed to the president swiftly.
Passing the PIGB, Dogara said, should trigger a “drastic improvement in the petroleum industry as it will attract investors and open up the sector”.
The Nigerian Senate’s president, Bukola Saraki, said the passing of the PIGB would help address the country’s frequent fuel shortages – one of which struck in December. The Senate passed the bill in May 2017.
Efforts to pass legislature on the sector have been under way for at least 10 years but progress has been painfully slow. When Buhari came to power the government moved to split up the Petroleum Industry Bill (PIB) into more manageable pieces. The PIGB is the first.
The Nigeria Extractive Industries Transparency Initiative (NEITI) welcomed the chamber’s approval of the PIGB, saying its passage was “bold, courageous and progressive”. A report from NEITI in 2017 said the failure to pass a new law had led to losses of as much as US$200 billion.
The NGO noted that while there had been expectations that the rules would change, the lack of clarity – over such a long period – had slowed investments. While the PIGB does advance the question of reform, clarity on tax rates will come in a later bill.
In addition to these missed opportunities, NEITI said the new law would counter “process lapses and outright stealing”.
At the end of 2017, NEITI issued a report saying oil revenues for Nigeria had fallen by 55% in 2015, raising concerns over various revenue and dividend payments.