Oil
PIB: FG to scrap NNPC, PTDF, PPPRA, DPR, others
ABUJA: Fresh indications emerged yesterday that the Federal Government would scrap 10 federal agencies, including the Nigeria National Petroleum Corporation (NNPC) upon the approval of the Petroleum Industry Bill (PIB) by the National Assembly.
Other federal agencies that would be affected by the passage of the new PIB are the Department of Petroleum Resources (DPR), Petroleum Technology Development Fund (PTDF) Petroleum (Special) Trust Fund, Petroleum Equalisation Fund (PEF), Petroleum Profit Tax and Deep Offshore and Inland Basin Production Sharing Contracts, Motor Spirits (Returns) and Associated Gas Re-injection and Oil Pipelines, among others.
A member of the PIB Drafting Committee, Dr. Francis Adigwe, gave the hint at a workshop convened by the Senate Joint Committee on PIB chaired by the Chairman of the Petroleum Resources Committee (Upstream), Emmanuel Paulker. Adigwe said the passage of PIB into law would bring about the repeal of 10 existing Acts, adding, however, that not all laws relating to oil and gas would be repealed.
He further explained that, “the existence of the PIB law would bring about creation of 10 new agencies that would be coordinated by the minister of petroleum resources, who is to be treated as an institution and not as a person.
“The concept of the minister in the new PIB is as an institution and not a person because provisions in the bill make a sitting minister of petroleum resources to have sweeping powers such as powers of coordinating and regulating the critical areas of the oil and gas sector. “The minister will also advise the president on the appointment of all the chief executive officers of the new agencies, including the upstream petroleum inspectorate and its downstream counterpart, which is not available in the current Petroleum Act.”
Meanwhile, an expert in the petroleum industry, Prof. Dagogo Fubara of Kariala Konsult Nigeria Limited, said the 10 percent of oil companies’ net profit to be set apart for the host communities should be reviewed upwards. Speaking at the one-day forum on PIB organised by the Senate Joint Committee on PIB, Prof. Fubara described the figure as inconsequential and called for full royalties from oil and gas companies to the petroleum producing communities.
“The quantum is inconsequential for the purpose of the fund of the host communities. It is the practice all over the world that rents and royalties from oil and gas are paid to the host communities.
“All royalties and rents from oil and gas should be paid to the state, local government and communities where the oil and gas is extracted at a rate similar to what it was before the 1969 Petroleum Act. “Having a single fund for all the communities as proposed in the bill will be unwieldy, unmanageable and cumbersome to administer transparently, openly and expeditiously with accountability. “Having distinct host community fund will be more definitive and enable each of the communities benefit maximally.
It will also enhance peace and harmony between the companies and host communities.” The speaker also kicked against the power of the president to grant and lease oil blocs in special circumstances as stipulated in the new oil law. According to him, such power was inconsistent with the objectives of the bill and as such, should be expunged. “It is inconsistent with the objectives of the bill and leads to continuation of a lot of entrenched corruption and abuse of power, negating all other commercial processes established in the bill.”
Various experts who delivered papers at the workshop expressed the opinion that the powers given to the president and the minister of power and in respect of the oil and gas industry were enormous and might be abused. Unlike the extant Petroleum Act, which PIB sought to repeal and which gave the power to allocate oil blocks to the petroleum minister as an institution, PIB sought to reside that power solely in the president.
Earlier, Paulker reminded the experts that the Senate Joint Committee on the PIB had an open mind to the new petroleum law, which was why the lawmakers invited the drafters of the bill to elucidate and educate them on the provisions in the new oil law.
Paulker said the workshop was intended to give update information on the bill before the scheduled public hearing. “We are engaging services of professional to enlighten us on the bill once more so that when we go out for public hearing in various locations, we would be versed in everything concerning the bill.”
In a strategic move to revitalize Nigeria’s oil and gas sector, the Federal Government has unveiled two key fiscal incentives aimed at attracting investment and enhancing energy security.
The announcement was made by Mr. Wale Edun, the Minister of Finance and Coordinating Minister of the Economy on Wednesday.
The first initiative, the Value Added Tax (VAT) Modification Order 2024, introduces critical exemptions for essential energy products and infrastructure, including Diesel, Feed Gas, Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG), Electric Vehicles, Liquefied Natural Gas (LNG) infrastructure, and Clean Cooking Equipment.
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These exemptions are designed to reduce living costs for Nigerians, promote energy security, and accelerate the transition to cleaner energy alternatives.
The second initiative, the Notice of Tax Incentives for Deep Offshore Oil & Gas Production, offers new tax relief options for deep offshore exploration projects.
This measure aims to position Nigeria’s deep offshore basin as a premier destination for international oil and gas investments, boosting the country’s appeal to foreign investors.
These reforms are part of a broader set of policy initiatives, known as Policy Directives 40-42, endorsed by President Bola Ahmed Tinubu.
The directives reflect the administration’s commitment to fostering sustainable development in the energy sector and enhancing Nigeria’s competitive edge in the global oil and gas market.
By Yemie Adeoye
NIGERIA’s President Bola Tinubu has announced that the protracted ExxonMobil-Seplat upstream oil divestment will be formally approved by the Minister of petroleum within a matter of days, just as he announced his government’s intention to expand the Compress natural Gas, CNG buses initiative.
The President who stated this during his Independence day nationwide broadcast stated that the move is in line with his administration’s commitment to free enterprise, free entry and free exit in investments which is the hallmark of his administration investment policy.
“Fellow compatriots, our administration is committed to free enterprise, free entry, and free exit in investments while maintaining the sanctity and efficacy of our regulatory processes. This principle guides the divestment transactions in our upstream petroleum sector, where we are committed to changing the fortune positively. As such, the ExxonMobil Seplat divestment will receive ministerial approval in a matter of days, having been concluded by the regulator, NUPRC, in line with the Petroleum Industry Act, PIA. This was done in the same manner as other qualified divestments approved in the sector.”
The President also seized the opportunity to plead with Nigerians to be patient with his administration’s reform policies. “As your President, I assure you that we are committed to finding sustainable solutions to alleviate the suffering of our citizens. Once again, I plead for your patience as the reforms we are implementing show positive signs, and we are beginning to see light at the end of the tunnel”.
“Our energy transition programme is on course. We are expanding the adoption of the Presidential Initiative on Compressed Natural Gas for mass transit with private sector players. The Federal Government is ready to assist the thirty-six States and FCT in acquiring CNG buses for cheaper public transportation.
Fellow Nigerians, while we are working to stabilise the economy and secure the country, we also seek to foster national unity and build social harmony and cohesion. Our economy can only thrive when there is peace”. he enthused.
As part of the administration’s push to improve Ease of Doing Business (EoDB), Nigeria’s Vice President Kashim Shettima has expressed support for ExxonMobil’s plan to invest $10 billion in the country’s deep-water oil sector.
Speaking on Wednesday, September 25, 2024, during a meeting with ExxonMobil executives at the 79th United Nations General Assembly (UNGA) in New York, Shettima called the investment “a clear testament to the administration’s economic reforms and investor-friendly policies.”
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This announcement follows news that international maritime company DP World intends to develop a multibillion-dollar port project in Nigeria.
Stanley Nkwocha, Senior Special Assistant to the President on Media and Communications, shared the development in a statement on Wednesday. He quoted Shettima as saying: “ExxonMobil’s potential investment aligns with the vision of President Bola Ahmed Tinubu’s administration for a more investment-friendly Nigeria.
We are committed to fostering an environment that supports such transformative projects.”Shettima also discussed the administration’s broader efforts to improve the ease of doing business, highlighting the “Renewed Hope Agenda,” which aims to simplify bureaucratic processes, enhance transparency, and offer fiscal incentives to attract global investors.
“Our administration has taken bold steps to unify the exchange rate, remove fuel subsidies, and implement tax reforms. These measures, though challenging in the short term, are intended to create a stable and predictable business environment in the long term,” he added.
On the oil and gas sector, Shettima mentioned that the government is revising the fiscal framework for deep-water operations to attract investment while ensuring fair returns for the Nigerian people.
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