11 March 2015, Abuja – The Senate Joint Committee on the Petroleum Industry Bill, PIB, has disclosed that it has finished working on the Bill and is proposing the privatisation of Nigeria’s four refineries two years after the passage of the Bill.
Just as the lower chamber, the House of Representatives, proposes the complete deregulation of the nation’s downstream sector, not exceeding six years after the divestment of government stakes from the Nigerian National Petroleum Corporation, NNPC.
Speaking at a PIB roundtable in Abuja, a Principal Consultant to the Senate Joint Committee on the PIB, Mr. Francis Adigwe and a member of the House Committee on the PIB, Mr. Uzor Azubuike, said the committee had concluded its work on the Bill. They further intimated that the Bill might be laid before the Senate and the House next week Thursday, respectively.
Specifically, Adigwe told participants that the bill has been finalised, while the work of the joint committee has been concluded and the final print is with the Senate.
He said the committee had set up a mechanism for the liberalisation and deregulation of the downstream sector in the Bill to include the sale of the refineries within two years of the passage of the PIB.
According to him, the Bill also provides for the scrapping of the Petroleum Equalisation Fund, PEF, immediately the downstream petroleum sector is deregulated.
Currently, the PEF reimburses marketers for the bridging of petroleum products from the depots and or refineries to the hinterlands by road in order to have uniform pricing.
Other proposals in the bill include the sale of the Federal Government’s stake in the company that will emerge from the NNPC, through the Nigerian Stock Exchange, NSE.
He said, “In the Bill, we set up a fund for abandonment and decommissioning. That is, every company that gets a licence or lease to operate an oil asset will be required to pay certain amount into that fund. This is because environmental management requires huge fund.
“Also a section on Frontier Exploration was introduced. This was not in the original Bill brought before the Senate. The Bill is proposing the setting up of an agency, with adequate funding, to cater for frontier fields.“However, we included Sunset Clauses, regarding the life span of the agency in charge of the frontier fields, especially when all the fields reach the end of their productive lives.”
Adigwe further revealed that the Bill also proposes incentives for investors that are planning to build refineries, such as crude oil supply to the refineries, among others. The supply of feedstock was one of the biggest constraints faced by investors who were issued licences to operate private refineries.
He also disclosed that a section of the Bill deals with Open Access and Third Party Assets, making it possible for private investors to access existing pipeline network and depots and also build and operate their own pipelines and depots.