A former Secretary-General of the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG), Mr Frank Kokori, has described the recently signed Petroleum Industry Act (PIA) as a historic achievement for President Muhammadu Buhari’s government.
Kokori made the remark during an interview on Tuesday in Ilorin, Kwara State.
The former NUPENG Secretary-General was in Ilorin for a two-day strategic planning workshop and management retreat organised by the Michael Imoudu National Institute for Labour Studies (MINILS).
Kokori is the Chairman of the Governing Council of MINILS.
The PIA seeks to provide legal, governance, regulatory and fiscal framework for the Nigerian Petroleum Industry and development of host communities.
He said the passage was historic and watershed for the industry, adding that there were lots of benefits in it.
“We now have a legal framework which was absent in the oil industry.
“I am from an oil producing community, our people will like to have more percentage from what is coming from their own backyard.
“If NUPENG and others did not oppose the bill, what we are hearing is just the militias in the creek who are vehement about condemning it, but we know that there are lots of benefits in the PIA,” Kokori said.
In September 2020, President Muhammadu Buhari sent a new PIB to the National Assembly for consideration by the Senate and the House of Representatives.
After several months of scrutiny, the bill was passed on July 1, a relatively quick process which avoided a protracted clause-by-clause negotiation.
The new law offers a radical departure from past norms. The law provides for the selling of shares in a reformed Nigerian National Petroleum Corporation (NNPC), the replacement of regulatory bodies, and the reduction and streamlining of royalties.
The legislation suggests the NNPC should become “a commercially-oriented and profit-driven national petroleum company” independent of government and audited annually, although no dates are yet given for a share sale.
The act also lays down rules for environmental cleanups, introduces new dispute-resolution mechanisms between government and oil companies, and sets up a midstream government infrastructure fund.
Given the PIB’s tangled history, passage of the long-awaited act represents a significant political victory for the president and sends a strong message to international investors.
Nigerian administrations since the 1960s have – with varying degrees of effort – failed at reform. In the last 20 years, multiple governments have attempted to pass an all-encompassing Petroleum Industry Bill (PIB), the scope and complexity of which has ensured repeated failure.
The PIB contains 5 Chapters, 319 Sections and, 8 Schedules dealing with Rights of Preemption; Incorporated Joint Ventures; Domestic Base Price and Pricing Framework.
It also provides for Pricing Formula for Gas Price for the Gas Based Industries; Capital Allowances; Production Allowances and Cost Price Ratio Limit; Petroleum Fees, Rents and Royalty; and Creation of the Ministry of Petroleum Incorporated.
