Financial Energy Review
The Minister of State for Petroleum Resources, Chief Timipre Sylva, said that the passage of the Petroleum Industry Bill ( PIA) has assured the multinational oil companies and global oil industry investment of adequate protection for their business interest in Nigeria.
In his Keynote address, during a session on Petroleum Industry Act (PIA) at ongoing 5th Edition of Nigeria International Energy Summit (N.I.E.S) Sylva pointed out that a new dawn has been ushered into Nigeria’s oil and gas industry, the day President Muhammadu Buhari signed the Petroleum Industry Bill (PIB) into law.
According to him, it was a landmark achievement and victory for all Nigerians.
“Before this landmark Act, Nigeria’s petroleum industry was governed by the Petroleum Act of 1969 and other obsolete legislations.
“The President never concealed his desire towards creating a more conducive environment for growth of the sector and addressing legitimate grievances of communities most impacted by extractive industries.”
The Minister added: “Let us not forget that the PIB was introduced over two decades ago. Despite the controversies and the difficulties, the Buhari administration believed that the concept, objectives and long-term goals of the bill remained impeccable as to warrant its efforts to rally the legislature from different political and ethnic divide for its passage.”
While the country was waiting for the PIA, Nigeria’s oil and gas industry lost about $50 billion worth of investments. In fact, between 2015 and 2019, KPMG states that “only 4 percent of the $70 billion investment inflows into Africa’s oil and gas industry came to Nigeria even though the country is the continent’s biggest producer and the largest reserves.”
He maintained that it is no brainer, therefore, to see that the absence of the legal, governance, regulatory and fiscal framework for the industry contributed to the huge loss Nigeria has witnessed.
However, with the assent of the PIA, President Buhari has assured multinational oil companies and global oil industry investment community of adequate protection for their business interest in Nigeria. The nation’s energy industry is no longer rudderless.
The PIA makes Nigeria competitive relative to other oil and gas producing countries, especially among its African peers.
Dissecting the PIA, the session looked at the journey in the implementation of Act. Some aspects of the implementation may need more attention so that the Act could deliver the expected benefits to all the stakeholders.
The Minister submitted that the role of the two new dual regulators will come under scrutiny while the issue of the host communities will continue to elicit frayed nerves and emotions.
“It is commendable that the PIA addressed the relationship with host communities by creating the Host Community Development Trust Fund (HCDTF) to foster sustainable prosperity, provide direct social and economic benefits from petroleum to host communities, and enhance peaceful and harmonious coexistence between licensees or lessees and host communities. It may not be perfect yet, but it is much better than where we are coming from.”
Therefore, it is crucial for all stakeholders as well as all arms of government to embrace the common desire to make the PIA and its intended brief of sanitising the oil industry a reality. It will hopefully engender the enthronement of transparency and openness to the sector, revolutionise the nation’s oil sector and attract more investments to the sector.
