Nigerian President, Muhammadu Buhari on Monday, signed the Petroleum Industry Bill (PIB) 2021 into law.
Special Adviser to the President on Media and Publicity, Chief Femi Adesina, disclosed that President Muhammadu Buhari has signed the Petroleum Industrial Bill (PIB) into Law in a statement he issued in Abuja.
According to the statement, “Working from home in five days quarantine as required by the Presidential Steering Committee on COVID-19 after returning from London on Friday, August 13, the President assented to the Bill, Monday, August 16, in his determination to fulfill his constitutional duty.
“The ceremonial part of the new legislation will be done on Wednesday, after the days of mandatory isolation would have been fulfilled.”The Petroleum Industry Act provides a legal, governance, regulatory and fiscal framework for the Nigerian petroleum industry, the development of host communities, and related matters. Recall that the Senate had passed the Bill on July 15, while the House of Representatives did the same on July 16. The national Assembly’s signing ended a long wait since early 2000s.
With the new act, the entire framework for doing business in Nigeria’s oil sector changes fundamentally. See some of the highlights of the new Act that will now govern operations in the sector going forward:
- FG to Conclude Commercialisation of NNPC by February 2022
- Act retains 3% for host communities, 30% for frontier basins
- New law creates two regulatory agencies for oil industry
- Commission to collect rents, royalties, production share
- Downstream authority to collect gas flare from midstream
- PIA imposes 1% levy on wholesale price of petroleum products
- Corporation to retain 10% of profit as management fee
- Oil companies to be sanctioned for understating profits, overstating losses
- New legislation repeals 10 existing laws
- BoT, executive members of host communities’ board may not be indigenes
- Oil areas to distribute funds for capital projects (75%), reserve (20%), administrative (5%)
- Bill divided into fiscal, administrative, governance and institutions as well as host communities
- Host communities’ fund to be set up within 12 months from Monday
- All employees of NNPC deemed new staff of NNPC limited
- When incorporated, board appointments to be made by shareholders, not the president alone
- Host communities to forfeit entitlement to extent of damage in cases of vandalism