The Petroleum Industry Bill moved one step closer to becoming law after Senators on Thursday began to consider its provisions after a committee report.

Senator Sabo Mohammed (Jigawa South-West) who chairs the Joint Committee on Petroleum (Downstream); Petroleum (Upstream) and Gas Resources presented the report of the committee.

Speaking on the PIB, the Deputy Senate President, Senator Ovie Omo-Agege said the bill will create an enabling environment for investors to come in and invest in Nigeria’s oil sector.

He, however, appealed that the contribution of companies to a Host Communities Trust Fund be increased.

The committee had recommended that five percent of the actual annual operating expenditure of the proceeding financial year in the upstream petroleum operations should go to the Fund.

Key Points in the Report:

1. Report prescribes amendments to a total of 752 provisions out of which about 56 are substantial amendments as recommended by stakeholders during public hearing

2. The Committee recommends funding mechanism of 30% of NNPC Limited’s profit oil and profit gas as in the production sharing, profit sharing, and risk contracts to fund exploration of frontier basins. The Frontier Basins are to take advantage of the foreseeable threats to the funding of fossil fuel projects across the world due to speedy shift from fossil fuel to alternative energy sources.

3. The Committee recommends 5% of the actual annual operating expenditure of the proceeding financial year in the upstream petroleum operations affecting the host communities for funding of the Host Communities Trust Fund. (This is however a drop of 5% compared to the 10% recommended in the previous PIB submitted to President Muhammadu Buhari by the 8th Assembly which was not assented to)

4. The Committee recommends 96 amendments to Chapter Four of the Bill for better and attractive tax incentives to achieve the goal of attracting the over 100Bn Dollars capital investment inflow into Africa’s oil and gas industry.