PRESIDENT Muhammadu Buhari has approved a committee to immediately commence the implementation of the Petroleum Industry Act (PIA).

The steering committee, which has 12 months for the assignment, is headed by the Minister of State for Petroleum Resources Timipre Sylva.

President Buhari gave the approval on Wednesday while giving a remark on the Act, which he assented to two days ago.

He spoke during a meeting with the leadership of the National Assembly led by the President of the Senate Ahmed Lawan at the Presidential Villa in Abuja.

The president hinted that relevant ministries, departments and agencies had been tasked to work with Sylva to ensure  successful completion of the implementation process.

He said that  lack of political will had hampered the growth of the industry, noting that the country had lost about $50 billion in the last 10 years for ignoring the Act.

President Buhari said he was hopeful that the new Act would coordinate the activities of the Nigerian National Petroleum Corporation (NNPC) and reposition it for further progress.

“The primary responsibility of the steering committee shall be to guide the effective and timely implementation of the PIA in the course of transition to the petroleum industry envisaged in the reform programme, and ensure that the new institutions created have the full capability to deliver on their mandate under the new legislation,” said Presidential Spokesman Femi Adesina, in a statement.

The committee has as members, Permanent Secretary of the Ministry of Petroleum Resources; Group Managing Director of NNPC; Executive Chairman of Federal Inland Revenue Service (FIRS), as well as representatives of the Ministry of Justice, and the Ministry of Finance, Budget and National Planning.

However, Nigerian governors have picked holes in the Petroleum Industry Act signed by President Muhammad Buhari on Monday.

They described the law as a recipe for disaster.

The governors identified six unfavourable areas in an August 10 letter to the President. They pleaded with him to withhold his assent to enable the National Assembly to take another look at the bill along the lines of their observations.

The letter was signed on their behalf by the Chairman of the Nigeria Governors’ Forum (NGF) and Ekiti State Governor Kayode Fayemi.

The identified pitfalls, according to the governors, were in sections 9(4) and (5); 33; 53(2), (3); (4); 54 (1) and (2); 55 (1); and 64(c).

Despite the request to a stay action, President Buhari got the advice to sign the bill on his return from the United Kingdom at the weekend.

He signed the bill while observing self-isolation on Monday. 

 One of the issues the governors raised included:

*The law will deny states their fair share from the Federation Account because it favours the Federal Government and the Nigerian National Petroleum Corporation (NNPC), which will transform to a limited liability company.”

The governors, who nevertheless hailed the law as good for the oil and gas sector, are unhappy about the provisions for the incorporation of NNPC Limited under the Companies and Allied Matters Act.

Despite these, some oil sector governance experts have expressed optimism that the Act, though not perfect, is a step in the right direction.

“Definitely, signing of the law is a step in the right direction. Like all laws, it’s not perfect but it’s what we have for now. We will work with the authorities to make implementation smooth and hopefully address areas of concern,” Chairman of the Major Oil Marketers Association of Nigeria, Adetunji Oyebanji told The ICIR.

Meanwhile, Fitch Ratings, a global leading research agency, has  noted that the passage of the PIA could have positive long-term effects on both Nigeria’s public finances and oil & gas production, observing that the impact would depend on details of implementation.

It said the bill was unlikely to have a significant near- to medium-term impact on Nigeria’s creditworthiness.

Fitch further pointed out that the law called for 30 per cent of the Nigerian National Petroleum Corporation’s (NNPC) profit from petroleum sharing contracts to be spent on frontier exploration.

“The near-term effects of this on revenues remitted by the company to the government are uncertain, but it could help raise production in the longer term. The full impact will also depend on the details and implementation of the fiscal regime for international oil companies, as joint ventures between the NNPC and international oil companies account for the bulk of new exploration and production activity.”

Nigeria’s Senate President Ahmed Lawan largely attributed the signing of the PIA to harmonious collaboration between the executive and the legislature, while assuring that both arms of the government would work for effective implementation of the Act.

“This is our legacy bill, and we are happy that it has passed and assented to by Mr President,” he said.