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5 Misconception About The Petroleum Industry Act, 2021 - Politics - Nairaland

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Sanusi To Tinubu: The President Shouldn’t Be The Petroleum Minister / President Buhari Signs Petroleum Industry Bill Into Law / 10 Things To Know About Nigeria’s Petroleum Industry Bill, PIB (2) (3) (4)

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5 Misconception About The Petroleum Industry Act, 2021 by Gratitudes081(m): 12:05pm On Aug 22, 2021
DEBUNKING THE TOP 5 MISINFORMATION ON THE PETROLEUM INDUSTRY ACT (PIA) 2021:

1. NNPC is being privatized?

No, NNPC is not privatized. NNPC is only becoming a limited liability company subject to CAMA, to be named NNPC Ltd (C will also now mean Company, not corporation). The share is still 100% government owned.

A major difference is, prior to PIA, NNPC had its own law: NNPC Act 1977, which guided it. Now, NNPC Ltd will be subject to law guiding other companies in Nigeria. PIA repeals (abolishes in layman's term) the NNPC Act.

NNPC Ltd will run like a company with full profit/commercial motive (did it ever have loss motive?). 20% of its profits to be retained for its own growth and 80% remitted to government as its shareholder.

2. 30% frontier exploration fund (FEF) is bigger than 3% host community levy (HCL)

There are two things wrong with this info. Firstly, the bases of computation are different. The basis for FEF is profit oil/gas, the basis for HCL is prior year operating expenses.

Secondly, the 30% FEF applies only on NNPC's profit oil/gas, while 3% HCL applies on opex of all upstream companies in Nigeria and there are over 50 of them. So mere comparison of the headline % without regard to bases and number of companies in each bucket, is misinformation.

Noteworthy that I also personally think that that commitment to FEF is too big in light of country's financial situation, dire need of revenue for other things, but the facts stated above need to be corrected.

3. NNPC to contribute 30% of its profits to FEF

This is wrong. There is a difference btw NNPC profits vs NNPC profit oil & profit gas. The former is the corporate accounting profit, as in when all its expenses as a company are deducted from its revenues, what is left.

This is not the profit the PIA is talking about as the basis of the 30% of FEF. What PIA is talking about is profit oil and profit gas from NNPC's upstream oil & gas contracts (production sharing, profit sharing & risk sharing contracts).
Profit oil/gas is what is left after
royalty, tax and operating cost are deducted from crude oil or crude gas production in any of the contract types above. It's an upstream thing, so it means profits from NNPC subsidiaries like NGC are not part of it. In short, it's not the corporate profit of NNPC as group.

4. Frontier Exploration = North

Wished I could avoid mentioning this, but section 9 that establishes FEF actually says the fund will be used for the development of "frontier acreages". The definition section says "frontier acreages" would be as defined through regulation by Commission.

Effectively, the Commission (i.e successor to DPR) will later issue a Regulation to define and say where the "frontier acreages" are. However, it is expected that frontier basins would be part of these frontier acreages and PIA listed Anambra, Dahomey, Bida, Chad & Benue trough as the basins which would effectively (but not exhaustively) be part of frontier acreages. From that list, 2 of the 5 determined frontier fields are not in the North. So frontier exploration fund use is not only for the North. Now sounding like I'm defending FG? No, just the law.

5. PIA has become effective:

No PIA is not yet in force. While the signing by the president means it has become a law, it doesn't mean it became effective on the day it was signed. A gazetted version will be issued that says the date of commencement.

A couple of provisions there will also not start immediately. For example; the Minister of Finance will incorporate NNPC Ltd under CAMA within 6 months after effective date.

In short, the date of signing is not necessarily the effective date. And the effective date is not yet public yet.

Copied.
By: Suraj Oyeleye.

https://threadreaderapp.com/thread/1428148802347847680.html

33 Likes 6 Shares

Re: 5 Misconception About The Petroleum Industry Act, 2021 by Gratitudes081(m): 12:08pm On Aug 22, 2021
I hope this addresses some of the basic misinformations about the recently passed Petroleum Industry Bill, and accented by Mr. President.

God bless the Federal Republic of Nigeria.

28 Likes 1 Share

Re: 5 Misconception About The Petroleum Industry Act, 2021 by Seniorwriter(m): 12:10pm On Aug 22, 2021
SMH.....
It is very sad to be a witness to gross injustice....a country where the south south are shortchanged to please a nothern sect!

Gratitudes081:
I hope this addresses some of the basic misinformations about the recently passed Petroleum Industry Bill, and accented by Mr. President.

God bless the Federal Republic of Nigeria.
This PIA is more lopsided than the PIB...#Fact
seunmsg:


The new PIA just like any other law is not 100% perfect. However, it’s a significant improvement over what we had before. Let’s implement this for a while and observe the shortcomings. We can then amend the law based on the observed shortcomings.
What is wrong with you ? Why can't you use critical thinking on national issues and policies that make or mare lives and economic development!
Why support the implementation of something that already has shortcomings...that's DOA to people like me that will rather create a custom unique approach and development policy.
It is absurd that whilst other oil producing countries are doing better with the same oil resources the past and present leadership administrations in Nigeria makes it look like a curse because of their nepotism, incompetence and greedy nature.
CoolAmbience:



Which young visionary leaders are you talking about? People like you who reason in a one way traffic-like manner?

Was it the PIA signed by Buhari that compelled the likes of Ibori, Odili, Alamaeseigha etc, to loot the resources of the region? Couldn't such huge resources have been deployed into enhancing development and wellbeing of people in the region?

Which policies do not have shortcomings anywhere in the world? Name one!

As far as I know, the PIA is a welcome development, and Nigeria can always move from there to improving efficiency in the Oil & Gas industry.

For me, it is not about giving more money to communities and states, it is about expanding advocacies around fiscal responsibility and getting leaders to account for their stewardship, especially by their own people.

All that young people in the South south do is, hail their thieving leaders; calling them Chiefs instead of Thiefs, that they truly are; while condemning the FG at the slightest opportunity. That's absolute nonsense!
SMH@your stupid ignorance....just one question for you: Is Nigeria as an oil producing state in the same profile with other oil producing countries in terms of facilities & policy benefits to the citizens and geographical locations of the oil rich regions?

Buckeyemedia1:
Nice work Mr SeniorWriter.
Learn how to quote rightly that's not my comment you quoted there with my moniker
Timmi:


It is sad that even with the explanation that is provided, you still find it difficult to understand what the PIB is all about, 2 of the 5 states that will benefit from the frontier fund are not in the north.
Stop showing your ignorance on a public space....I've gone through the PIA and in it there is an allocation from oil proceeds gotten for oil exploration activities in the north ! The OP omitted to elaborate the nonsense it(the bill) holds as to that but created a lop-sided advocacy for a lopsided bill as well.
You are the one that needs to go read the PIA to understandcomprehend.


WE NEED YOUNG VISIONARY LEADERS IN NIGERIA COME 2023.


@SENIORWRITER

17 Likes 3 Shares

Re: 5 Misconception About The Petroleum Industry Act, 2021 by Okoroawusa: 12:13pm On Aug 22, 2021
I Love PMB

11 Likes 5 Shares

Re: 5 Misconception About The Petroleum Industry Act, 2021 by ThatFairGuy1: 12:13pm On Aug 22, 2021
Thanks for bringing this clarification here

16 Likes 3 Shares

Re: 5 Misconception About The Petroleum Industry Act, 2021 by seunmsg(m): 12:17pm On Aug 22, 2021
Seniorwriter:
SMH.....
It is very sad to be a witness to gross injustice....a country where the south south are shortchanged to please a nothern sect!


This PIA is more lopsided than the PIB...#Fact


WE NEED YOUNG VISIONARY LEADERS IN NIGERIA COME 2023.


@SENIORWRITER

The new PIA just like any other law is not 100% perfect. However, it’s a significant improvement over what we had before. Let’s implement this for a while and observe the shortcomings. We can then amend the law based on the observed shortcomings.

Criticizing the entire law simply because you don’t like Buhari’s face is silly. Jonathan is from the Niger Delta and he was president for about 6 years without passing the law despite having comfortable majority in both houses of the National Assembly.

So, quit the hate and let’s talk about the positives of the law. Host communities getting 3% OPEX of oil companies in the upstream sector is a big deal. This is in addition to the existing 13% derivation, Ministry of Niger Delta and NDDC.

What people from host communities should be worried about now is how the 3% OPEX will be paid. Who are the people that will manage the funds on their behalf? I sincerely hope the funds will not be administered same way NDDC is being administered.

36 Likes 5 Shares

Re: 5 Misconception About The Petroleum Industry Act, 2021 by Gratitudes081(m): 12:19pm On Aug 22, 2021
ThatFairGuy1:
Thanks for bringing this clarification here

You are welcome sir.
God bless Nigeria.

8 Likes 2 Shares

Re: 5 Misconception About The Petroleum Industry Act, 2021 by Gratitudes081(m): 12:21pm On Aug 22, 2021
seunmsg:


The new PIA just like any other law is not 100% perfect. However, it’s a significant improvement over what we had before. Let’s implement this for a while and observe the shortcomings. We can then amend the law based on the observed shortcomings.

God bless you sir.

A law can easily be amended when its found to be lacking. But it should be effective first before we begin to analyze its shortcoming.

12 Likes 3 Shares

Re: 5 Misconception About The Petroleum Industry Act, 2021 by obyrich(m): 12:32pm On Aug 22, 2021
seunmsg:


The new PIA just like any other law is not 100% perfect. However, it’s a significant improvement over what we had before. Let’s implement this for a while and observe the shortcomings. We can then amend the law based on the observed shortcomings.

Criticizing the entire law simply because you don’t like Buhari’s face is silly. Jonathan is from the Niger Delta and he was president for about 6 years without passing the law despite having comfortable majority in both houses of the National Assembly.

So, quit the hate and let’s talk about the positives of the law. Host communities getting 3% OPEX of oil companies in the upstream sector is a big deal. This is in addition to the existing 13% derivation, Ministry of Niger Delta and NDDC.

What people from host communities should be worried about now is how the 3% OPEX will be paid. Who are the people that will manage the funds on their behalf? I sincerely hope the funds will not be administered same way NDDC is being administered.
I don't know why the noise all over the place. Why did Obasanjo and GEJ ( who is from SS) not push for the passage of the PIB during their tenure? If they think the bill is not fair, they should move for amendment.

18 Likes 1 Share

Re: 5 Misconception About The Petroleum Industry Act, 2021 by Lovelive: 12:34pm On Aug 22, 2021
Gratitudes081:
DEBUNKING THE TOP 5 MISINFORMATION ON THE PETROLEUM INDUSTRY ACT (PIA) 2021:

1. NNPC is being privatized?

No, NNPC is not privatized. NNPC is only becoming a limited liability company subject to CAMA, to be named NNPC Ltd (C will also now mean Company, not corporation). The share is still 100% government owned.

A major difference is, prior to PIA, NNPC had its own law: NNPC Act 1977, which guided it. Now, NNPC Ltd will be subject to law guiding other companies in Nigeria. PIA repeals (abolishes in layman's term) the NNPC Act.

NNPC Ltd will run like a company with full profit/commercial motive (did it ever have loss motive?). 20% of its profits to be retained for its own growth and 80% remitted to government as its shareholder.

2. 30% frontier exploration fund (FEF) is bigger than 3% host community levy (HCL)

There are two things wrong with this info. Firstly, the bases of computation are different. The basis for FEF is profit oil/gas, the basis for HCL is prior year operating expenses.

Secondly, the 30% FEF applies only on NNPC's profit oil/gas, while 3% HCL applies on opex of all upstream companies in Nigeria and there are over 50 of them. So mere comparison of the headline % without regard to bases and number of companies in each bucket, is misinformation.

Noteworthy that I also personally think that that commitment to FEF is too big in light of country's financial situation, dire need of revenue for other things, but the facts stated above need to be corrected.

3. NNPC to contribute 30% of its profits to FEF

This is wrong. There is a difference btw NNPC profits vs NNPC profit oil & profit gas. The former is the corporate accounting profit, as in when all its expenses as a company are deducted from its revenues, what is left.

This is not the profit the PIA is talking about as the basis of the 30% of FEF. What PIA is talking about is profit oil and profit gas from NNPC's upstream oil & gas contracts (production sharing, profit sharing & risk sharing contracts).
Profit oil/gas is what is left after
royalty, tax and operating cost are deducted from crude oil or crude gas production in any of the contract types above. It's an upstream thing, so it means profits from NNPC subsidiaries like NGC are not part of it. In short, it's not the corporate profit of NNPC as group.

4. Frontier Exploration = North

Wished I could avoid mentioning this, but section 9 that establishes FEF actually says the fund will be used for the development of "frontier acreages". The definition section says "frontier acreages" would be as defined through regulation by Commission.

Effectively, the Commission (i.e successor to DPR) will later issue a Regulation to define and say where the "frontier acreages" are. However, it is expected that frontier basins would be part of these frontier acreages and PIA listed Anambra, Dahomey, Bida, Chad & Benue trough as the basins which would effectively (but not exhaustively) be part of frontier acreages. From that list, 2 of the 5 determined frontier fields are not in the North. So frontier exploration fund use is not only for the North. Now sounding like I'm defending FG? No, just the law.

5. PIA has become effective:

No PIA is not yet in force. While the signing by the president means it has become a law, it doesn't mean it became effective on the day it was signed. A gazetted version will be issued that says the date of commencement.

A couple of provisions there will also not start immediately. For example; the Minister of Finance will incorporate NNPC Ltd under CAMA within 6 months after effective date.

In short, the date of signing is not necessarily the effective date. And the effective date is not yet public yet.

Copied.
By: Suraj Oyeleye.

2 Likes 2 Shares

Re: 5 Misconception About The Petroleum Industry Act, 2021 by ItsTutsi(m): 1:10pm On Aug 22, 2021
There is Sokoto and gongola basin inclusive, so basically 5 out of 7 are in the north.. the south has still Ben short changed

If u break it down base on states, the south only has
-Anambra and Oyo

North:
Sokoto
Borno
Gombe
Adamawa
Niger
Benue

8 Likes 1 Share

Re: 5 Misconception About The Petroleum Industry Act, 2021 by Danjikanbauchi: 1:27pm On Aug 22, 2021
The evil APC and northern Muslims are sponsoring evil propaganda. We know the truth.

8 Likes 2 Shares

Re: 5 Misconception About The Petroleum Industry Act, 2021 by Nobody: 1:29pm On Aug 22, 2021
H
Re: 5 Misconception About The Petroleum Industry Act, 2021 by MANNABBQGRILLS: 1:30pm On Aug 22, 2021
We now have an Act providing for legal, governance, regulatory and fiscal framework for the Nigerian Petroleum Industry, the Host Communities; and for related matters.

It is indeed a new dawn for the Industry and Dentons ACAS-Law will walk through this new dawn with our clients and potential investors seeking to take advantage of the new look Industry.
God bless Nigeria.
We Moveeeee.

Nigeria will be great in our lifetime,
All her enemies will lose las las,
They ALWAYS lose wink

Enemies of Nigeria, AKA Children of hate, frustrations and perdition sssssshhhhhhhhh..........

Our Darling Daddy is @ work.

11 Likes 6 Shares

Re: 5 Misconception About The Petroleum Industry Act, 2021 by MANNABBQGRILLS: 1:30pm On Aug 22, 2021
Gratitudes081:
I hope this addresses some of the basic misinformations about the recently passed Petroleum Industry Bill, and accented by Mr. President.

God bless the Federal Republic of Nigeria.
Amen.
More......


After more than a decade of various attempts, the Nigerian Oil and Gas Industry (“Industry”) will finally have a new look as the Presidency announced that the Petroleum Industry Bill 2020 (now Petroleum Industry Act 2021 “PIA”) has been assented to by the President.

For many years, the Federal Government of Nigeria (the “FGN”) sought to overhaul the Industry by introducing a new legal, regulatory and fiscal regime for the Industry.
The first major attempt was in 2008 when the first Petroleum Industry Bill (the “PIB”) was introduced. Since 2008, there have been other unsuccessful attempts at reforming the Industry through reworked drafts of the PIB in 2012 and 2018.
In 2020, the FGN reintroduced the PIB 2020 to the current National Assembly and after months of deliberations, both arms of the National Assembly passed the PIB 2020 in July 2021.
The President has now provided his assent to the PIB 2020 and signed the same into law.

It is indeed a new dawn for the Industry and Dentons ACAS-Law will walk through this new dawn with our clients and potential investors seeking to take advantage of the new look Industry.

4 Likes 3 Shares

Re: 5 Misconception About The Petroleum Industry Act, 2021 by MVLOX(m): 1:31pm On Aug 22, 2021
Must read
Re: 5 Misconception About The Petroleum Industry Act, 2021 by livebyday(m): 1:31pm On Aug 22, 2021
Propaganda Vs damage control

4 Likes 1 Share

Re: 5 Misconception About The Petroleum Industry Act, 2021 by MANNABBQGRILLS: 1:31pm On Aug 22, 2021
Danjikanbauchi:
The evil APC and northern Muslims are sponsoring evil propaganda. We know the truth.
Why not keep silent if you have nothing to contribute to this enlightening topic
Must you bring your usual negative vibes here?
People dey o shocked

Danjikanbauchi:
you support every evil done by this government.
So this good Bill that the corrupt thieves, criminals and looters you supported for 16 wasted years couldn't sign is evil to you?

After several years of missteps, intrigues, legislative summersaults, and restarts, the President, our Darling Daddy finally signed the Petroleum Industry Bill into the Petroleum Industry Act ('PIA') on 16th August 2021.
We now have an Act providing for legal, governance, regulatory and fiscal framework for the Nigerian Petroleum Industry, the Host Communities; and for related matters.
To state that this very important Act has been long in coming is to oversimplify the obvious.
From the time the legislation was conceived some 20 odd years ago!

Well, replying you further will only be a waste of time and space as usual.
So again, keep silent if you have nothing reasonable to contribute and don't wail on a Sunday.
Keep it for tomorrow.
Peace ✌

7 Likes 3 Shares

Re: 5 Misconception About The Petroleum Industry Act, 2021 by tempest01(m): 1:31pm On Aug 22, 2021
x
Re: 5 Misconception About The Petroleum Industry Act, 2021 by jordiea: 1:31pm On Aug 22, 2021
North is benefiting more
Re: 5 Misconception About The Petroleum Industry Act, 2021 by Antoeni(m): 1:31pm On Aug 22, 2021
PMB emergence as President is a prayer answered by sincere and honest Nigerians

10 Likes 2 Shares

Re: 5 Misconception About The Petroleum Industry Act, 2021 by MANNABBQGRILLS: 1:32pm On Aug 22, 2021
Antoeni:
PMB emergence as President is a prayer answered by sincere and honest Nigerians
Gbamsolutely!

7 Likes 4 Shares

Re: 5 Misconception About The Petroleum Industry Act, 2021 by livebyday(m): 1:37pm On Aug 22, 2021
Seniorwriter:
SMH.....
It is very sad to be a witness to gross injustice....a country where the south south are shortchanged to please a nothern sect!


This PIA is more lopsided than the PIB...#Fact

What is wrong with you ? Why can't you use critical thinking on national issues and policies that make or mare lives and economic development!
Why support the implementation of something that already has shortcomings...that's DOA to people like me that will rather create a custom unique approach and development policy.
It is absurd that whilst other oil producing countries are doing better with the same oil resources the past and present leadership administrations in Nigeria makes it look like a curse because of their nepotism, incompetence and greedy nature.

WE NEED YOUNG VISIONARY LEADERS IN NIGERIA COME 2023.


@SENIORWRITER

Well said
Re: 5 Misconception About The Petroleum Industry Act, 2021 by Nobody: 1:37pm On Aug 22, 2021
Antoeni:
PMB emergence as President is a prayer answered by sincere and honest Nigerians

Yes, with all the banditry, and bad economy, eh?

9 Likes 2 Shares

Re: 5 Misconception About The Petroleum Industry Act, 2021 by Danjikanbauchi: 1:39pm On Aug 22, 2021
post=105060434:

Why not keep silent if you have nothing to contribute to this enlightening topic
Must you bring your usual negative vibes here?
People dey o shocked
you never have good intentions for this country, you are a living propaganda machine, you hate equity and Justice that's why you support every evil done by this government.

But keep it up karma will surely find you.

9 Likes 3 Shares

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