Nigeria to realize N53.4trn in investments from PIB, earlier lost due to non-passage – NEITI
● We must measure what other competing oil producing countries offer – Nwaozuzu ● Bill came too late – environmentalist
Nigeria may be heading to receive a total of N53,4 trillion in investments in its oil and gas industry beginning from when President Muhammadu Buhari would sign the new Petroleum Industry Bill (PIB) into law, the Nigeria Extractive Industries Transparency Initiative (NEITI) said in Abuja. The same amount was lost by the country due to the long delay in passing the PIB.
The PIB is not a new law. It has been in the National Assembly since 2008. The last eight session of the Assembly passed a portion of it, which assent was rejected by President Buhari.
According Orji Ogbonnaya Orji, executive secretary, NEITI the expected gains include over $200 billion revenue dip, $10.4 billion and N378.7 billion lost through under-remittances, inefficiencies, theft or absence of a clear governance framework for the oil and gas industry.
He described the decision of the Senate and the House of Representatives to consider the Bill as a priority resulting in its eventual passage as bold, courageous and progressive given the challenges the bill has passed through in its legislative journey for over fifteen years.
Orji said NEITI was set up to ensure transparency and accountability in the management of extractive industries in Nigeria; and has demonstrated genuine and legitimate interest in the PIB from the onset.
“NEITI’s interest is in view of the urgency and strategic importance of a new law to replace the existing archaic legislations that have aided huge revenue losses, impeded transparency, and accountability and investment opportunities in the nation’s oil and gas industry,” he said.
He said NEITI had alerted the nation through a special policy brief titled “The urgency of a new petroleum sector law” to the effect that the current stagnation of investment opportunities in the Petroleum Industry was because of the absence of a new law for the sector.
“The hedging by investors stems from the expectation that the old rules would no longer apply, but not knowing when the new ones would materialise,” the NEITI executive secretary said.
Orji hoped that the new governance law for the oil industry, the hitherto huge revenue losses to the nation will be strictly checked if not eliminated.
“Implementation of the global Extractive Industries Transparency Initiative (EITI) which Nigeria is a key signatory, had over the years been frustrated by the absence of a dynamic law that suits modern business modules and trends in the ever-evolving oil and gas industry,” the NEITI boss said.
Justifying the passage of the oil industry bill, the director of Emerald Energy Institute, University of Port Harcourt, Chijioke Nwaozuzu, a professor of downstream petroleum economics, said, it would usher in fresh investments which had in nearly two decades eluded the nation’s oil and gas sector.
Nwaozuzu’s view was corroborated by Muda Yusuf, for director-general of the Lagos Chamber of Commerce and Industry (LCCI), who said that the PIB’s passage marks positive steps toward achieving its stated goals. He said oil and gas industry is a major contributor to Nigeria’s economy and government revenue; and as such should be freed from political influence.
“Nigeria as the largest oil and gas reserves in Africa has huge untapped potential to achieve its economic development goals including gasto-power ambitions, but the investments are not coming in the absence of fiscal policies that will stimulate investment. Despite having the largest reserves in Africa, Nigeria only received 4 per cent ($3 billion) of $75 billion invested in the continent between 2015-19,” Yusuf said.
The fundamental shift in global energy markets driven by advances in unlocking unconventional petroleum resources and increasing traction for cleaner energy sources has resulted in a global oversupply of crude oil, putting pressure on prices. This underscores the need to create a competitive environment to attract investment to the oil and gas sector.
Nigeria’s petroleum industry faces many countryspecific challenges including joint venture funding and arrears, regulatory overlaps, insecurity and inadequate infrastructure for domestic gas development. All these the Bill is aimed to resolve.
However, Nwaozuzu, the Emerald Energy director advised that Nigeria should tread cautiously the high expectations from the Bill, because the country has to, first, measure what other competing oil producing countries are offering in their own laws.
He also advised that the country must out an eye on the global energy transition and the decarbonized economy programme underscored by the expected cut in carbon emissions by 2035 by the developed countries and the net-zero framework by 2050.
Nnimmo Bassey, a foremost environmentalist, welcomed the passage of the bill as it would have salutary effects on the oil and gas industry, but he regretted that it came rather too late when there is ongoing global energy transition. Petroleum Industry Bill consists of five distinct chapters which include: Governance and Institutions; Administration; Host Communities Development; Petroleum Industry Fiscal Framework; and Miscellaneous Provisions comprising 319 clauses and 8 schedules.