The petroleum industry bill is seen as a driving force for a turnaround for Nigeria’s oil earnings.
The House of Representatives has commenced debates on the new Petroleum Industry Bill, PIB, the ambitious legislation that promises broad reforms for the nation’s oil and gas sector.
The highly anticipated PIB 2012, which comes with more specifics than its failed 2009 version, is seen as a driving force for a turnaround for Nigeria’s oil earnings.
“Investment in the oil and gas sector has dwindled and our crude reserves are shrinking as most investors are awaiting the enactment of this very important legislation that has the potency to affect our quest to become one of the top 20 largest economies by the year 2020,” House Leader, Mulikat Akande-Adeola, said on Wednesday as the bill came up for consideration.
Overall, the proposal targets opening the sector for more investments, promoting indigenous participation, and increased earnings from oil companies while ensuring investors’ interests are protected.
The bill encapsulates 16 previous laws that administered the sector for more than half a century.
Some of its most critical reforms will include the unbundling of the Nigerian National Petroleum Corporation into smaller organizations while the government will have greater control of acreages-exploration areas.
It will also finally outlaw gas flaring with commensurate fines paid as the money equivalent of the flared gas.
The bill, initiated by the Obasanjo administration, but submitted to the National Assembly by former president, Umaru Yar’Adua, has endured prolonged legislative process.
Attempts to push the bill through at the twilight of the former National Assembly session in 2010 stirred intense ethno-partisan conflict with lawmakers support or otherwise for its provisions predicated on ethnic lines.
Lawmakers expressed support for the bill as it came for a second reading on Wednesday.
Legislators however remain divided on several key areas of the bill such as the recommendation for a new fund for oil producing communities.
A public hearing and the final reading is expected to be fiercely contested between many interests including oil majors who remain opposed to some provisions of the bill.
Full debates are expected to last days.