Oil and gas account for about 10% of Nigeria's entire Gross Domestic Product (GDP), with Nigeria possessing an estimated crude oil reserve of 37 billion reserves and another 200 trillion cubic feet of natural gas. Still, the path to reforms has never been smooth for the all-important industry.

The modern reforms of Nigeria’s Oil and Gas Industry can be traced back to the Oil and Gas Sector Reform Implementation Committee of the Olusegun Obasanjo Administration (OGIC), which was inaugurated on April 24, 2000.

At the end of its deliberations, the Oil and Gas Sector Reform Implementation Committee (OGIC) recommended the creation of a national oil and gas policy and the need to separate commercial institutions in the oil and gas sector from the regulatory and policy-making institutions in Nigeria, among many other salient provisions.

The Olusegun Obasanjo administration was not able to follow through on the recommendations of the OGIC after its tenure elapsed on May 29, 2007. This was caused by time constraints.

Upon arrival to the office on May 29, 2007, the Umaru Musa Yar'adua presidency announced a broad institutional reform of existing Nigeria's oil and gas policy. This proposed framework was based on the recommendations of Olusegun Obasanjo's OGIC committee.

On September 7, 2007, the Umaru Musa Yar’Adua administration appointed Dr Rilwanu Lukman to chair a reconstituted OGIC with a mandate to transform the broad provisions in the NOGP into functional institutional structures that can facilitate the propelling of the national economy to a GDP level comparable to the top 20 largest worldwide economies by 2020.

However, due to the collapse of that administration because of President Umaru Musa Yar'adua's demise, the administration was not able to follow through on its proposals for Nigeria's oil and gas industry.

But it wasn't over. In July 2012, the Goodluck Ebele Jonathan administration presented a new version of the Petroleum Industry Bill as prepared by the OGIC committee to the National Assembly for consideration and eventual enactment. 

While there was a passage of the bill in 2015 at the level of the House of Representatives of the 7th National Assembly, the bill failed to pass through the Senate of that same assembly, up until the tenure of the administration ended in May 2015.

It was often said that naked ambition, machinations of power and overt self-interest all prevented the Petroleum Industry Bill (PIB) from being successful at the 7th Assembly.

In 2015, the Muhammadu Buhari administration proposed passing the Petroleum Industry Bill (PIB) in four separate bills: Petroleum Industry Governance Bill; Fiscal Regime Bill; Upstream and Midstream Administration Bill; Petroleum Host Communities Bill.

Internally, the administration prioritised the safe passage of the Petroleum Industry Governance Bill because it addressed core challenges facing the oil and gas sector, like the establishment of the Nigerian Petroleum Regulatory Commission, an independent regulatory commission that subsumed the current functions of the Department of Petroleum Resources (DPR) and the Petroleum Products Pricing Regulatory Agency (PPPRA).

The PIGB also proposed the unbundling of the Nigerian National Petroleum Corporation (NNPC) into two splinter limited liability companies with interests in the joint venture assets of the upstream sector and the production sharing contract assets.

The overall objective of the PIGB was to promote transparent and effective accountability in the oil sector, concerning the new institutions created.

The PIGB was passed by the Nigerian Senate in May 2017 and the House of Representatives passed the same bill into law on January 25 2018.

President Muhammadu Buhari failed to assent to the bill when it was presented before him in August 2018, citing constitutional and legal reasons, but one of which was the 10% of profits that was proposed to be retained by the Petroleum Regulatory Commission, which the presidency cited as being too much and to the detriment of the revenue of federal, states and local governments in Nigeria.

On July 1, 2021, the House of Representatives passed the Petroleum Industry Bill into law after President Muhammadu Buhari presented a more comprehensive Petroleum Industry Bill to the National Assembly in September 2021.

The Nigerian Senate passed the Petroleum Industry Bill on July 2, 2021, and President Muhammadu Buhari signed the Petroleum Industry Bill into law on August 16, 2021.