TheCable

The house of representatives ad-hoc committee on the petroleum industry bill (PIB) has recommended that the discretionary power of the president to grant licences and leases be removed.

In its place, the lawmakers opted for a competitive bidding process by industry players.

It also sought to revoke the power of the petroleum minister to either serve as chairman or make recommendations to the president on the appointment of chairmen of boards of some agencies under the new law.

Ishaka Bawa, chairman of the 23-member committee, said the powers of the president to grant oil blocks as contained in section 191 of the original bill was revoked to avoid the practice whereby the power for the award of oil blocks becomes discretionary.

He said: “Discretionary power of the president to grant petroleum licences and lease as contained in section 191 of the original Bill is completely removed. Instead, the committee recommended competitive biddings for the award of such licences and leases.

“Whereas the committee has retained the conventional powers of the minister under Section 6 of the Bill, the powers conferred on the minister over the control of newly established agencies in the petroleum industry appear to be enormous and capable of undermining the independence of the regulatory agencies.

“The rationale behind the removal of ministerial powers is to ensure the smooth running of the agencies without undue influence, and guarantee independence of the same, which is in line with current global practice.”

He listed the affected agencies as the National Oil Company, Upstream Petroleum Inspectorate Agency, Downstream Petroleum Regulatory Agency, Asset Management Corporation and any other corporate entity established by the Act.

According to him, the committee had scrutinised all the 363 sections and annexures in the original PIB and consequently made 11 far-reaching amendments and recommendations on salient industry issues.

Bawa also said the committee recommended that 30 per cent of NNPC shares be sold through public offerings at the Nigerian Stock Exchange while 49 per cent of Nigerian Gas Company shares be sold same way.

Reassuring investors, he added: “The committee has retained, with some amendments, provisions in the bill which uphold the sanctity of existing petroleum contracts. This is to allay the fears of the investors, both foreign and local, who feel threatened that a new petroleum law will terminate existing contracts for oil exploration and production.

“Thus, any licence, lease, permit, or other rights in respect of the petroleum industry in Nigeria shall continue to be valid for the remainder of its duration as it if is issued under this Act,” he said.

The new PIB, presented to the house at plenary, by the ad-hoc committee on PIB, is set for consideration and approval by the house when it reconvenes on March 31.