The momentous passage of the Petroleum Industry Governance Bill on 25 May 25 by the Nigerian Senate was heralded by many as a revolutionary step at creating a legal framework to address some of the perennial challenges that have plagued the oil and gas industry over the years. With this development, the bill is expected to go through a few other legislative procedures and eventually be assented by the president.
The bill seeks to establish efficient and effective governing institutions with clear and separate roles for the petroleum industry. The bill also proposes to establish a framework for the creation of commercially oriented and profit-driven petroleum entities that ensure value addition and internationalization of the petroleum industry as well as promote transparency and accountability in the administration of petroleum resources of Nigeria. Furthermore, it is the expectation of oil industry players that the bill will foster a conducive business environment for petroleum industry operations.
The bill provides three-pronged solutions to the bureaucratic bottlenecks and regulatory inefficiency in the oil and gas industry; harsh business environment for investment in the industry; and default in meeting the financial obligations of the government on its investment in the industry. The unique approach offered by the Bill is the establishment of three institutions to pilot the change in the general operations of the oil and gas industry: Nigeria Petroleum Regulatory Commission; National Petroleum Asset Management Company, and National Petroleum Company.