EXCLUSIVE: ‘New PIB’ strips president of discretionary power to allocate oil blocks

The new draft of the controversial petroleum industry bill (PIB) strips the president of the discretionary powers to allocate oil blocks, TheCable understands.

The bill now confers the power to allocate petroleum exploration and production leases and licences to the Nigeria Petroleum Regulatory Commission (NPRC) which shall be established under the act.

The final draft of the new bill, “Petroleum industry governance and institutional framework bill 2015”, available to TheCable, which was concluded on December 2, 2015, limits the power of the president to appoint members of the board of the regulatory commission.

The bill aims to promote transparency and accountability in the administration of the petroleum resources of Nigeria, while creating a conducive business environment for petroleum industry operations.

The new draft, which mentions the senate only twice, says the upper chamber would be responsible for the ratification of governing board members appointed by the president.

“The appointment  to  the  board  in  respect  of  persons  appointed  pursuant  to paragraphs (a) to (d) of this section shall be made by the President subject to confirmation of the senate,” the bill reads.

“The chairman and non-executive commissioner shall be persons of high integrity and substantial professional experience; in appointing the chairman and the non-executive commissioner, the president shall have due regard to a fair representation of the technical, legal and commercial interest.”

The initial PIB, which has been stuck in the national assembly for nearly a decade, conferred discretionary powers on the president to allocate oil blocks in addition to competitive open bidding.

As recently as 2012, the PIB presented before the national assembly said “notwithstanding the provisions of the subsection (3) of section 190 or any other provision of this act, the President shall have the power to grant a license or lease under the act”.

The presidential minister

In the past dispensation, the minister of petroleum was distinctly different from the president, but with President Muhammadu Buhari as the substantive minister of petroleum he may perform the duties of the president and the minister.

The bill grants the minister the power to control the oil blocks under the recommendation of the commission.

“Upon  the  recommendation  of    the  commission,  grant,  amend,  renew,  extend  or revoke petroleum exploration and production  licenses and leases pursuant to the provisions of this act or any other enactment,” the bill posits.

The minister also has the rights of pre-emption – that is, the right to purchase of goods by one person or party before the opportunity is offered to others – to all petroleum products in times of national emergency or war.

“In the event of a state of national emergency or war, the Minister shall have the right of pre-emption of all petroleum and petroleum products obtained, marketed or otherwise dealt with under any license or lease granted under this act or any other enactment,” it says.

The Commission

The NPRC is saddled with the responsibility of conducting bid rounds for petroleum exploration licenses, but its recommendation can be subject to the minister, who has the power to grant licenses.

The commission shall “conduct bid rounds or other processes for the award of petroleum exploration and production licences and leases, approve all field development programmes” and “allocate petroleum quotas”.

One or more bills

Industry sources confirmed to TheCable, that one or more bills may be proposed after the framework bill is passed.

“This bill does not address refineries, gas flaring and some other matters, extensively. So we expect that another bill, perhaps two, may be proposed, as a break out of the original PIB,” a source said.

“Let’s keep our fingers crossed and take it one step at a time.”

Previous administrations in the country have been accused of allocating oil blocks to their cronies, without any operational capacity to handle such exploration.

Ita Enang, who is now the senior special assistant to Buhari on national assembly matters, had said in 2013 that 83 percent of Nigeria’s oil blocks were controlled by northerners.

He called on the senate at the time seize the PIB opportunity to revoke all licences and re-allocate all oil blocks.