President Buhari Monday assented to the oil and gas industry regulatory bill, a month after it was passed by the legislators, and Tuesday approved the immediate implementation of the provisions of the Act thereby restructuring the operations and management of the Nigerian oil and gas industry.
APC governors under the auspices of Progressives Governors Forum, PGF, said with the coming into law of the new Petroleum Industry Act, President Buhari has, once more, demonstrated unwavering commitment to change Nigeria democratically.
In a statement signed Wednesday by Chairman of the Forum, Governor Abubakar Atiku Bagudu of Kebbi State, the APC governors stressed that the new Petroleum Industry Act present a convincing credential of the commitment of APC, to restructure the Nigerian economy through a democratic process in line with provisions of the 1999 Nigerian Constitution as amended.
The governors noted that with the Act in enforcement, the monopoly status of the old NNPC, which vested it with both the powers of regulating the industry and extraction and sales of crude oil in both the upstream, midstream, and downstream has been abolished.
” With Nigeria National Petroleum Corporation (NNPC) now unbundled, and in its place, three new structures – Nigerian Upstream Regulatory Commission, Nigerian Midstream and Downstream Petroleum Regulatory Authority and Nigerian National Petroleum Company Limited – stronger accountability structures, each with a Board drawing representation from stakeholders in the oil and gas industry is instituted.
“With the new Act, the task of regulation is vested in the two regulatory bodies created by the law. While extraction and sales of crude will now be undertaken by both the new Nigerian National Petroleum Company Limited and other private companies in both the upstream, midstream, and downstream, in line with regulatory standards respectively provided by the Nigerian Upstream Regulatory Commission and Nigerian Midstream and Downstream Petroleum Regulatory Authority created by the Act.
“In addition, the Act also created a Host Communities Development Trust to be managed by a Board of Trustees. As provided by the Act, 3% of the profit from the operations of oil and gas businesses will be used for the development of the host communities. It is noteworthy that this is in addition to the existing 13% derivation to oil-producing states and funds allocated to the Niger Delta Development Commission (NDDC), which Mr. President has continuously emphasized that all the resources must be put to judicious use for the benefits of the people in the oil-producing areas.
“Similarly, Part III, Section 9 (4) and (5) of the Petroleum Industry Act provides for the creation of “a Frontier Exploration Fund which shall be 30% of NNPC Limited’s profit oil and profit gas as in the production sharing, profit sharing, and risk service contracts.” This is a provision made to ensure that NNPC Limited transfers 30% of the Frontier Exploration Fund dedicated to the development of oil exploration activities in all parts of the country subject to appropriation by the National Assembly. This provision will guarantee exploration activities in the country beyond the discretionary decisions of the management of the new NNPC Limited.
*Even critics of our party, APC, and our governments cannot ignore the fact that the coming into law of the Petroleum Industry Act is an important democratic milestone. It signposts the commitment of our party and our government to develop the oil and gas sector and resolve all the challenges associated with the operations of the sector. With the new Act, there should be a remarkable improvement in revenue collection from the oil and gas sector. This is expectedly the Next Level governance initiatives our party has promised Nigerians during the 2019 campaigns”, the statement reads in parts.