Protocol;

1. The petroleum industry remains the mainstay of the Nigerian economy. Oil and gas have been, and will likely remain for the foreseeable future, Nigeria's most important non-renewable energy source. The industry contributes over 90% of the country's foreign exchange earnings.

2. The industry is therefore critical to the economic and social development of Nigeria. This all-important sector of the economy has for too long performed below efficiency indexes, with government and investors alike losing significant edge in the oil and gas investment trends. The case for change cannot be more compelling considering that existing petroleum legal, regulatory and institutional structures are out-dated.

3. It is unacceptable that till date, we still import over 90% of needed petroleum products (petrol and chemicals), we flare substantial gas produced, we have damaged our eco-systems and polluted our communities and cannot supply adequate electricity to our homes and industries. This situation has undermined our citizens' standard of living, life expectancy, our national energy security and has resulted to other unforeseen fall-outs like: labour unrest; fuel queues; high cost of delivery of products; high cost of delivery of overall services in the overall economy; and unquantifiable wastage of national productivity as a result.

4. The state of the industry globally today, has heightened and made it imperative that either we comprehensively reform our local industry to have a chance to keep it alive or become extinct. The oil and gas industry is yearning for good governance,competitiveness, transparency, indigenous participation and accountability.

5. The 8th Senate recognizes that the reason for the dearthof reform in the industry is not due to lack of trying. Since 2008 when the PIB was first introduced through to the 7th National Assembly, several versions of the bill have unsuccessfully made their way through the National Assembly.

While, the PIB was stalling and its passage delayed at the National Assembly, investment decisions in the industry continued to suffer, keeping the country's future in limbo and denying Nigeria the unique opportunity as an oil and gas leader in Sub Sahara Africa.

6. This history of the petroleum industry reform effortnecessitated a rethink by the Senate on their approach and methodology. This gave rise to the choice of the current reform project by the 8th Senate. In our view, the petroleum sector is a politically sensitive industry with diverse and divergent interests. It was therefore important to recognize that for the reform to succeed,there was the need to unbundle it into manageable compartments that could be passed and implemented in tranches.

7. We were able to achieve this through extensive discussions, collaboration and the participation of all stakeholders; a process that we at the 8th Senate commenced as early as mid-August 2015 with a series of informal contributions that have culminated here today.

8. At this point, let me thank all those who contributed informally in moulding the bill, helping to unbundle its contents so that it is for this reason and others that we are today looking at the first of a series of bills arising from the intended reforms of the industry starting with the Petroleum Industry Governance and Institutional Bill.

9. It is widely acknowledged that major reforms in the governance and institutional structure for the sector are necessary and urgent. A major drawback of the existing framework is the lack of clarity of roles, self- regulation, conflicts and unnecessary overlaps.

10. The key objectives of the Petroleum Industry (Governance & Institutional Reforms) Bill therefore is to reform this segment of the industry by introducing international best practices that have led other countries to success in the development of their various oil and gas sectors. In doing this the bill will enable us;

a) Create efficient and effective governing institutions with clear and separate roles for the petroleum industry;

b) establish a framework for the creation of commercially oriented and profit driven petroleum entities that ensures value addition and internationalization of the petroleum industry;

c) promote transparency in the administration of the petroleum resources of Nigeria;

d) create a conducive business environment for petroleum industry operations.

11. This public hearing therefore is another avenue for us to further hear from you the operators, regulators, experts and other stakeholders in the industry as how best to achieve these objectives and move the industry forward in a manner that is efficient, effective and corrective.

12. It is our hope that by the end of your deliberations today, we would have been able to fine-tune this bill ready for the Senate to consider and pass this first tranche of the bills without any further delay.

13. At the passage of the second reading of this bill, we made a commitment to the Senate, that along with this Governance bill, we will begin to tackle the Fiscal Framework and Host Community issues.

14. I want to use this opportunity to inform you all that we will be starting informal discussions and just as we did on the governance issues, we will be engaging with a lot of you for your contributions, advice and opinions. We believe the two areas, Fiscal Framework and Host Community Issues, truly depend on your engagement with us.

15. The bills on Fiscal Framework and Host Communities will be a shift from the previous approach where the government will force its opinion on all parties.

Here at the 8th Senate, we intend to move away from the way things were done in the past during the consideration of such bills, especially Fiscal Framework and Host communities, we will push for a greater partnership relationship resulting in a bill that is a product of all the views and comments of the stakeholders so that the bill is a win-win for everyone; one that works for government, is attractive to oil companies to come and invest and takes into consideration the concerns of the host communities.

16. Finally let me reassure all stakeholders that this is just the beginning. We will also tackle the issues of downstream, gas and the environment. We are poised and resolved that we will deal with all issues related to the industry, albeit in tranches. This will ensure thoroughness and effectiveness. As a nation we cannot afford any further delay in our effort to reform our oil and gas industry.

17. The journey begins now and I assure you that we will guarantee that all of these bills are passed in record time. I wish you all very fruitful deliberations.

18. I now declare open the Public Hearing on the Petroleum Industry Governance Bill (PIGB) 2016.

19. Thank you and May God bless Nigeria.