The Nigerian oil and gas industry came one step closer to reform with the Petroleum Industry Bill (PIB) passing the West African countrys senate late last week
It still has to pass through the House of Representatives and the president before it becomes law. The progress of the PIB has been slow, with the first version drafted almost 17 years ago.
If the PIB passes into law as per the latest draft, Nigeria will have five new commercial and governance bodies to replace existing ones, such as the Nigerian National Petroleum Corporation (NNPC) and the Department of Petroleum Resources (DPR). A new regulatory agency, the Nigerian Petroleum Regulatory Commission (NPRC) would, if the bill becomes law, take over the functions of the Petroleum Inspectorate, the DPR, and the Petroleum Products Pricing Regulatory Agency.
Additionally, two new companies, Nigeria Petroleum Assets Management Company (NPAMC), and National Petroleum Company (NPC) will be created if the bill is passed. The NPAMC would be established with certain assets and liabilities of the NNPC, while the NPC would operate as a fully independent commercial entity.
The PIB also makes provisions for promoting energy efficiency, the provision of reliable energy, a taxation policy aimed at encouraging fuel efficiency by consumers and producers, and the introduction of more stringent health, safety and environmental quality management systems, in compliance with international standards.
In terms of improved community development, the PIB has a stated aim of encouraging peace and the development of petroleum producing areas across Nigeria by implementing projects aimed at mitigating the negative effects of petroleum activities. The country's stringent local content rules are expected to remain in place.
