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The new PIB may scrap DPR, PPRA, others

The PIB represents the most comprehensive review of the legal framework for the oil and gas sector in Nigeria.

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There is a strong indication that if the Petroleum Industry Governance Bill (PIGB) is finally passed into law by the National Assembly, the existing Department of Petroleum Resources (DPR), the Petroleum Products Pricing Regulatory Agency (PPPRA) and Petroleum Inspectorate (PI) may be scrapped, thereby giving way for the Nigeria Petroleum Regulatory Commission to take over their functions.

The Petroleum Industry Bill (PIB) is currently under legislative consideration and represents the most comprehensive review of the legal framework for the oil and gas sector in Nigeria since the industry began commercial operations in the 1960s. The Petroleum Industry Bill (PIB), an omnibus law is meant to regulate the entire sphere of the industry and repeal most existing oil and gas legislations.

READ: Shell to focus on Nigeria, Gulf of Mexico and others as it seeks to cut 40% of costs

No doubt, it signals the dawn of a new era; an era in which restructuring and transformation could address many of the issues that have dominated the oil and gas industry in Sub-Saharan Africa’s second-biggest economy.

The Petroleum Industry Bill (PIB) seeks to increase government revenue from oil, and as well lay down a strengthened legal and regulatory framework for the Nigerian oil industry, set up structures for the establishment of commercially driven petroleum entities; and promote transparency in the administration of Nigerian petroleum resources. Succinctly put, the bill seeks to address the problem of administering petroleum resources in line with global best practices, and to provide for efficient and independent sector regulation.

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READ: NNPC, partners to invest 53% of COVID-19 N21 billion intervention

The extant regulatory framework of the oil and gas sector which includes the Ministry of Petroleum Resources, NNPC Act 1997, the Petroleum Act 1969, the Oil and Pipelines Act 1990, the Petroleum Profit Tax Act 1959, the Petroleum Products Pricing Regulatory Act 2003 amongst others have had more ruinous effect on the oil and gas sector, as they have not promoted a culture of transparency in the oil and gas sector. They have also not created the right opportunities to tackle gas flaring, oil spillage and Illegal bunkering in Nigeria.

The key provisions of the bill are as follows:

1. The Minister of Petroleum

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The Minister of Petroleum is empowered to formulate, monitor and administer government policy in the petroleum industry; exercise general supervision over the affairs and operations of the petroleum industry in accordance with the provisions of this Act; report developments in the petroleum industry to the government; represent Nigeria at international organizations on petroleum matters; promote an enabling environment for investment in the Nigerian petroleum industry; negotiate treaties or other international agreements on matters pertaining to petroleum on behalf of the Government, shall have rights of pre-emption of petroleum and petroleum products marketed under any license or lease, in the event of a national emergency.

READ: Buhari announces $200m intervention funds for local oil firms, disbursements for mortgages

2. Establishment of the Nigerian Upstream Petroleum Regulatory Commission

This commission is to administer and enforce policies and regulations relating to all aspects of upstream petroleum operations and also to issue, administer and enforce compliance on the issuance of licenses and leases in the upstream sector. It is also to establish, monitor, regulate, and enforce health and safety measures relating to all aspects of upstream petroleum operations, publish reports and statistics on the upstream sector, validate and certify the evaluation of national hydrocarbon reserve, manage and administer all upstream petroleum data for all unallocated acreage. This Commission on the approval of the minister, is to allocate petroleum production quotas, and develop cost benchmarks for upstream petroleum operations performance amongst other functions, as laid out in the bill.

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3. Establishment of the Nigerian Midstream and Downstream Petroleum Regulatory Authority

This authority is to administer and enforce policies, laws and regulations relating to all aspects of midstream and downstream petroleum operations, and to issue and administer licenses in the midstream and downstream sectors. The agency is also to ensure and enforce compliance with the terms and conditions of all licenses, permits, and authorizations issued in respect of the midstream and downstream petroleum operations; set and enforce approved standards for designs, procurement, construction, and maintenance for all plant; installation and facilities pertaining to midstream and downstream operations.

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This authority is also laden with the responsibility of inspecting measurement equipment, and other facilities for midstream and downstream petroleum operations. It is also to facilitate the supply of gas to the strategic sectors, in accordance with the approved national gas pricing framework, implement customer protection measures in accordance with the provisions of this Act, regulate and ensure the supply, distribution marketing, and retail of petroleum products as may be prescribed by regulations, and shall also do other things that are necessary and expedient for the effective and full discharge of any of its functions under this Act, amongst other functions as stipulated in the bill.

4. Incorporation of the Nigerian National Petroleum Company Limited

The Minister of Petroleum shall within 6 months from the commencement of this Act, cause to be incorporated under the Companies and Allied Matters Act, a limited liability company, which shall be called Nigerian National Petroleum Company Limited (NNPC Limited).

The Minister shall at the incorporation of NNPC Limited, consult with the Minister of Finance to determine the number and nominal value of the shares to be allotted, which shall form the initial paid-up share capital of NNPC Limited, and the Government shall subscribe and pay cash for the shares.

READ: Petrol supply drops by over 23% due to decline in consumption

Ownership of all shares in NNPC Limited shall be vested in the Government at incorporation, and held by the Ministry of Finance Incorporated on behalf of the Government.

The Minister of Petroleum and the Minister of Finance shall determine the assets, interests, and liabilities of NNPC to be transferred to NNPC Limited or its subsidiaries, and upon the identification; the Minister shall cause such assets, interests, and liabilities to be transferred to NNPC Limited.

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Assets, interests, and liabilities of NNPC not transferred to NNPC Limited or its subsidiary, shall remain the assets, interests, and liabilities of NNPC, until they become extinguished or transferred to the Government.

NNPC shall cease to exist, after its remaining assets, interests, and liabilities other than its assets, interests, and liabilities transferred to NNPC Limited or its subsidiaries under subsection (1) of this section, shall have been extinguished or transferred to the Government.

READ: PIB; Will the jinx be broken this time around?

5. Granting of Licenses and Leases

Petroleum exploration license may be granted to qualified applicants, to explore petroleum on a speculative and non-exclusive basis.

Petroleum Prospecting License may be granted to qualified applicants, to carry out petroleum exploration operations on an exclusive basis. A Petroleum Prospecting License for onshore and shallow water acreages, shall be for duration of not more than 6 years, comprising of an initial exploration period of 3 years, and an optional extension period of 3 years. A petroleum prospecting license for deep offshore and frontier acreages, shall be for duration of not more than 10 years, comprising of an initial exploration period of 5 years, and an optional extension period of 5 years.

Petroleum mining lease may be granted to qualified applicants to search for win, work, carry away and dispose of crude oil, condensates, and natural gas. A petroleum mining lease may be granted for a maximum period of 20 years, which terms shall include the development period.

READ: New PIB amends royalties by oil firms as Sylva clarifies position on scrapping of NNPC

6. Abolition of Gas Flaring

Gas flaring has been said to be a major destroyer of the ozone layer, and this has a very detrimental effect on climate all over the world, as is presently occurring. The United Nations Framework Convention on Climate Change (UNFCCC), has called on countries to put an end to greenhouse effect. Despite not having any binding emission target under the UNFCC, Nigeria in its own way, has responded under the proposed bill to illegalize and abolish gas flaring.

Accordingly, the new bill demands strict adherence to a gas flaring plan, along with gas utilization plans, to be submitted by all oil and gas operators within six months of the coming into effect of the law, indicating data on their daily flare quantity, reserve, location, composition. Statistics posit that Nigeria losses a lump sum of money every year to gas flaring, such that its abolition is a wise way of saving this money, and making it available for the usage of the economy and its development.

READ: President Buhari to scrap NNPC, PPPRA as he submits new PIB to National Assembly

7. Domestic Gas Obligations

The PIB provides that the Nigerian Upstream Regulatory Commission shall, having regard to the needs of the domestic gas market and in accordance with the National Gas Master Plan, impose Domestic Gas Supply Obligations (DGSO) on lessees. As proposed, a lessee who fails to comply with its DGSO, shall not be permitted to make supplies to gas export operations, and where the lessee only supplies gas to export operations, the lessee shall be directed to suspend operations. This section will oust the existing Department of Gas in its functions and responsibilities.

8. Deregulation of the Downstream Sector

The PIB provides that the pricing of petroleum products in the downstream product sector, shall be deregulated to ensure market related pricing, adequate supply and removal of economic distortions, and creation of a fair market value for petroleum products in Nigeria’s economy. However, although pricing is to be left to market forces, the Bill proposes to safe- guard the interests of consumers, by providing that the Nigerian Midstream and Downstream Petroleum Regulatory Authority shall oversee tariffs for transportation by pipelines, bulk storage for petroleum products, and regulated open access facilities. The Nigerian Midstream and Downstream Petroleum Regulatory Authority will also be responsible for market monitoring and promotion of competition. This will oust the present Petroleum Pricing Products Regulatory Agency (PPPRA), which is charged with the same responsibilities, but has largely been inefficient till date.

9. Petroleum Host Communities Fund

The objective of the Bill is to provide direct social and economic benefits from petroleum operations to host and impacted communities. Also, the Bill seeks to enhance peaceful and harmonious coexistence between E & P companies on one hand, and host and impacted communities on the other – with an objective to foster sustainable and shared prosperity amongst the oil and gas companies and host communities.

The bill stipulates that an annual contribution of 2.5% of the actual operating expenditure (OPEX) of the E&P Company, will be placed into a fund. The funds available in the Endowment Fund are to be allocated in the following manner; 70% of the Endowment Fund shall be allocated to the Capital Fund, out of which the Board of Trustees shall make disbursements for projects in each Host Community, as may be determined by the Management. Any sum not utilized will be rolled over and utilized in subsequent years; 20% of the Endowment Fund shall be allocated to the Reserve Fund. The money is to be invested in the Trust when there is a cessation in the endowment payable by the settlor; 10% of the Endowment Fund shall be allocated to the settlor’s Special Project Fund to be utilized solely by the settlor for special projects, aimed to assist and support the host and impacted communities, provided that at the end of each financial year, the settlor shall render a full account of the utilization of the Special Project Fund to the Board of Trustees, and where any portion of the Fund is not utilized in a given year, it shall be returned to the Capital Fund.

If the PIB is eventually passed into law, it will contribute to lowering the oil theft rates and regular rifts, if host communities are satisfied.

READ: Has petroleum product deregulation finally come to roost?

10. Fiscal Regime under the PIB

The Bill proposes to replace the existing petroleum profits tax with a Nigerian Hydrocarbon Tax (NHT), at the rate of 50 per cent for petroleum operations onshore, and in shallow water fields; and 25 per cent for petroleum operations in deep-water, bituminous and frontier acreages. In addition to NHT, the Bill also proposes companies income tax at the rate of 30 per cent on upstream petroleum operations (which under the existing regime are not subject to companies income tax). Where petroleum operations fall in geographical areas that are subject to different tax rates, NHT shall be levied on the proportionate parts of the profits arising from such operations.

Johnson is a risk management professional and banker with unbridled passion for research and writing. He graduated top of the class with B.sc Statistics from the University of Nigeria and an MBA degree with specialization in Finance from Ambrose Alli University Ekpoma, with fellowships from the Association of Enterprise Risk management Professionals(FERP) and Institute of Credit and Collections management of Nigeria (FICCM). He is currently pursuing his PhD in Risk management in one of the top-rated universities in the UK.

2 Comments

2 Comments

  1. Jumbo George

    October 5, 2020 at 12:23 pm

    Please the NNPC, should be run the way LNG has been run for years now, secondly License should be given to others multi national company, like chevron and others to build more refineries in the country, in order to create more jobs, thanks.

  2. Myiibari Johnson

    November 1, 2020 at 2:28 pm

    I have checked this PIB law and I’m yet to see where it affect contract workers to be converted to staff. The slavery in the oil industry is unbearable. I’m currently working under a contractor in Chevron,but my salary is laughable,meanwhile staff are going home with over 1.2million depending on their levels. Something must be done about this.

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Reps oppose school resumption date, ask for 3 months extension

The lower legislative chamber has flawed FG’s directive on public and private schools’ January 18, 2021 resumption date.

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NCC, MDA, SEEPCO, local content laws, CBN Cashless Policy: Reps eye policy reversal, court Emiefele approval , Lawmakers tackle Finance Minister over failed CCTV project worth $460 million , Former Ghanaian President, Mahama begs Buhari to open border Former President of Ghana, John Mahama has appealed to President Muhammadu Buhari to open up its borders saying that Ghana has been heavily affected by Nigeria’s decision to close its borders. Mahama said that for economic activities to resume in West Africa, Nigeria needs to reconsider its decision on the total border closure. He made this plea while delivering the seventh anniversary lecture of investiture into The Realnews Hall of Fame and the unveiling of a book, titled: Pathways to Political and Economic Development of Africa. According to the former president as reported in The Nation, the closure of especially the Benin border, was taking a significant toll on many small and medium businesses, especially in Togo, Ghana and Cote D’Ivoire, which relied on inter-country trade. “I am sure that businesses in Nigeria that rely on supplies from these countries are also suffering. With the signing of the joint border task force agreement between Nigeria and her neighbours, I will like to take this opportunity to appeal to Nigeria to open up her border so that economic activities can resume,” Mahama said. While reacting to the shut down of shops owned by Nigerians by the Ghana Union of Traders’ Association (GUTA) as retaliation to the border closure, Mahama said; “Back home in Ghana, I also look forward to our government’s intervention that brings an immediate cessation to the forceful and illegal closure of shops of foreigners, especially Nigerians, by members of the local trade associations”. Mahama who is a former Chairman of the Economic Community of West Africa States (ECOWAS) spoke on how he still has an abiding interest in the progress of ECOWAS and its people. In this light, he said that Nigeria being the home of ECOWAS and the largest economy in West Africa should not allow the objective principles for establishment of ECOWAS to be lost. Meanwhile, the Vice Chancellor of Niger Delta University, Bayelsa State, Prof. Samuel Edoumiekumo, advised President Muhammadu Buhari not to yield to pressure to reopen the borders. Edoumiekumo who was also present at the lecture said President Buhari should remain firm in his resolve to ensure economic growth and the country’s development as the border closure will generate more revenue for the nation and tackle smuggling., Nigerians are enraged as lawmakers reject Innoson cars for latest Toyota Camry , FMBN ex-MD ordered to refund his salary, submit FMBN accounts over infractions

The House of Representatives has moved against the Federal Government’s directive that schools should resume on Monday, January 18, despite the rising cases of the coronavirus disease.

The lower house, while expressing its concern, wondered why schools were closed when the infection rates were around 500 and below, but now that it hovers well above 1000 infections daily, schools are being reopened.

This disclosure is contained in a statement titled, “School Resumption: Are We Truly Prepared?” which was issued by the Chairman, House Committee on Basic Education and Services, Prof. Julius Ihonvbere, on Saturday, January 16, 2021.

Ihonvbere in his statement said that public enlightenment campaigns have more or less stopped, as merely saying that protocol would be adhered to is no guarantee with the situation even being worse in rural areas.

The house, therefore, demanded for the postponement of resumption of schools by 3 months, if some critical steps are not taken, so as to enable the local and state governments put things in place adequately.

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He said that apart from Lagos and a couple of other states, governments have been unable to enforce Covid-19 protocols with people no longer wearing facemasks or use sanitisers, especially in secondary schools. There are no facilities for effective social distancing in the classrooms.

Ihonvbere said they have not heard how the schools would address the issues of introduction of morning and afternoon batches into the schools when they reopen to reduce overcrowding, special cleaning crews with sufficient sanitisers in classrooms, insisting on facemasks and sanitisers for the students and others.

What Prof. Ihonvbere is saying

The statement from the House partly reads,

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  • The Committee on Basic Education and Services, House of Representatives, has received with concern the decision of the Federal Government to reopen schools on January 18, 2021.
  • “We are particularly concerned that when the infection rates hovered around 500 and under, schools were closed; but now that it hovers well above 1,000 infections daily, schools are being reopened. Why are we rushing to reopen schools without adequate verifiable and sustainable arrangements to protect and secure our children?
  • “Similarly, we acknowledge the argument that most young persons have not been as affected by Covid-19 and many are asymptomatic. Yet, it does not mean they have full immunity against the virus. We also know that they would be working and interacting with adult teachers, administrative workers and other persons that do not live within the institutions.
  • ‘’People no longer wear facemasks or use sanitisers. Public enlightenment campaigns have more or less stopped. Merely saying they would adhere to the protocols is no guarantee. In rural areas, the situation is worse.
  • “Our position is that in spite of the very comprehensive protocols established by the Federal Ministry of Education, not up to 10 per cent of our educational institutions have implemented five per cent of the protocols. In most of our primary and secondary schools nationwide, adequate furniture, water and other sanitation and hygiene facilities do not exist.
  • “As a government that has committed to protecting the interests of the Nigerian people, it would be wrong to allow unprepared state governments, of which many did not take the pandemic too seriously anyway, to hoodwink or pressure it into this reopening game.
  • “The Committee believes that if these and other critical steps are not taken, there should be a postponement by three months to enable the local and state governments put things in place adequately. A word, they say, is enough for the wise.’’

What you should know

  • The Presidential Task Force (PTF) on Covid-19, a few days ago, insisted on the January 18 resumption date for schools until the Federal Ministry of Education advises otherwise.
  • The clarification became necessary following the earlier comment by the Minister for Education, Adamu Adamu, that government may review the resumption date following the outbreak of the second wave of the coronavirus pandemic across the country.

 

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FG announces mandatory NIN enrolment for foreign diplomats

The Federal Government has directed foreign diplomats in the country to also partake in the mandatory NIN registration.

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FG directs the suspension of NIMC staff involved in extortion of NIN applicants, SIM. Social media accounts monitoring, FG completes 11 projects to drive Digital Economy, FG orders NIPOST to stop cash transactions , Pantami moves to ban automatic voicemail service by telcos  , Why Nigeria’s Data woes may not end soon , Pantami reacts to CBN’s ATM fee cut, keeps mute on directive to cut data cost , Pantami condemns FIRS move to collect stamp duty, MTN, Airtel, others disregarding Pantami’s voicemail, data directives on all front , FG warns State governments against RoW charge increase, FG reiterates commitment towards implementing broadband strategy ,FG reiterates commitment to 75% broadband penetration in 5 years , Pantami tasks Youth on developing creative and entrepreneurial digital skills

The Federal Government on Sunday announced the mandatory National Identity Number (NIN) enrolment for foreign diplomats in the country.

While making the announcement, the government said that approval has been gotten for the establishment of enrolment centre at the Federal Ministry of Foreign Affairs by January 19, 2021.

According to a press statement which was signed by the Technical Adviser (Information Technology) to the Minister for Communications and Digital Economy, Dr Femi Adeluyi, the special centre will be managed by his ministry.

Adeluyi, in the statement, disclosed that the Communications Minister, Isa Pantami, said the centre is being set up based on the request of the Minister of Foreign Affairs, Mr Geoffrey Onyeama.

He said that the enrolment centre will provide support for members of the diplomatic corps and will be managed by the Federal Ministry of Communications and Digital Economy through the National Identity Management Commission (NIMC).

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What the statement from the Ministry of Communications and Digital Economy is saying

The statement reads, ” The Minister of Communications and Digital Economy, Dr Isa Ali Ibrahim Pantami, has approved the setting up of a National Identity Number (NIN) enrolment centre at the Federal Ministry of Foreign Affairs. The desk will be set up by Tuesday, 19th of January, 2021.

“This enrolment centre will provide support for members of the Diplomatic Corps and will be managed by the Federal Ministry of Communications and Digital Economy, through the National Identity Management Commission.

” The centre is being set up based on the request of the Honourable Minister of Foreign Affairs, Geoffrey Onyeama, in order to simplify the process for diplomats.

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“The National Identity Number is mandatory for diplomats who will reside in Nigeria for a continuous period of two years or more. It is also mandatory for all other lawful residents in the country as stated in Section 16 of the National Identity Management Commission Act 2007.’’

The statement also says that the compliance for NIN enrolment has been low until recently despite the Law making it mandatory for Nigerians and legal residents since 2007.

What you should know

  • It can be recalled that on December 15, 2020, the Federal Government had declared that after December 30, 2020, all SIMs that were not registered with valid NIN on the network of telecommunications companies would be blocked.
  • However, following public outcry against the short notice, it later extended December 30, 2020, giving 3 weeks’ extension for subscribers with NIN from December 30, 2020, to January 19, 2021, and a 6-week extension for subscribers without NIN from December 30, 2020, to February 9, 2021.
  • However, it yet to be seen if the deadline will be met with the large crowd that turn out every day at NIMC offices without being attended to

 

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PayVIS: New Lagos State platform to use traffic cameras to fine traffic offenders

Lagos State’s Vehicle Inspection Service has launched a technology-based initiative to track, monitor and book traffic offenders.

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The Lagos State Government has launched PayVIS, a number plate detection platform that captures vehicle offenders when they violate traffic laws and then bills them.

PayVIS is an initiative of the Lagos State Vehicle Inspection Service.

According to the information contained in the website of PayVis,

  • “PlateDetect is a Traffic analytics and access control application developed for Lagos State’s Vehicle Inspection Service to track, monitor, and book traffic offenders.”
  • “LASG VIS’s PlateDetect ensures that all vehicle documentation (vehicle license, Insurance policy, Roadworthiness certificate, Driver’s license, Hackney permit (Commercial vehicles only), Lagos State Drivers’ Institute card (Commercial vehicles) can be verified and tickets raised for violators.”

How it works

  • From an advert seen by Nairametrics, traffic cameras located beside traffic lights will capture traffic offenders without the presence of traffic officials.
  • The camera takes a photo shot of the vehicle’s plate number, and runs a scan of the vehicle’s records in the state’s database.
  • To detect whether you may have had a prior traffic offense, vehicle owners are to visit their website, type in their plate number and then click on search.
  • Once this is done, a bill is generated for any outstanding offense.

On its Facebook page, the Vehicle Inspection Service said that it will be showing an understanding of the current economic situation to exhibit fairness and good faith by offering a 50% rebate on existing unpaid fines from January 1 to 31st January 2021.

Offenders are advised to take opportunity of the period to pay up, as 100% penalty would be payable after the deadline.

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Watch the advert below:

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