28 October 2011
Group Politics Editor, Taiwo Adisa, examines the ups and downs of the PIB and the high-wired politics preventing its passage.
The Petroleum Industry Bill (PIB), which made its way into the National Assembly in September 2008, has been described as one bill with many advantages for the Nigerian oil industry. Experts have said that the nation could be losing up to $287 million monthly in the area of Production Sharing Contract (PSC) alone as far as the bill remained in the lockers of the National Assembly.
There is also the promise of more transparency in the sector as opposed to the opaqueness of its operations currently. The promise of community participation and more funds for the economy from tax intakes in gas, when the product is successfully separated from oil and taxed appropriately is another good take for managers of the economy. Perhaps more importantly is the promise of the bill to dismember the octopus Nigerian National Petroleum Corporation (NNPC), which could guarantee the desired enhanced openness, effectiveness and business capabilities. There is hardly anything to dispute the need for reforms in the sector. The Nigerian ppetroleum industry, which came alive with the discovery of crude oil in Oloibiri, Bayelsa state in 1956, has enjoyed some quantum leaps in capacity since then. With a commercial production capacity of 5, 100 barrels per day in 1958, it today produces 2.4 million barrels per day with 11 major companies operating some 1, 481 oil wells in the Niger Delta area.
Essentially, the Petroleum Industry Bill seeks to restructure, repackage and revolutionise the sector in a way that would guarantee more returns on investment for
, which currently rely on oil for 85 percent of its foreign exchange earnings. The bill combines 16 different Nigerian petroleum laws; tinkering with such existing legislations as the Petroleum Act 1969, the Petroleum Profits Tax Act 1959 and the Nigerian Petroleum Corporation Act of 1977. Nigeria