Adewale Sanyaolu
The Federal Government has given indications that the National Assembly might suspend its recess in order to deliberate over the passage of the prolonged Petroleum Industry Bill (PIB). Minister of State for Petroleum Resources, Mr.Timipre Sylva, stated this yesterday during a webinar series with the title: ‘‘Fiscal Regime Design, Government Revenues and Investors’ Interest in Nigeria Oil and Gas,’’ organized by the Nigerian Association of Petroleum Explorationists(NAPE). This was coming on the heels of the warning by the Executive Secretary of the Nigeria Extractive Industry Transparency Initiative (NEITI), Mr. Waziri Adio, that the delay in the passage of the PIB might have cost the country over $200 billion loss. ‘‘In the coming few days, we will be requesting the National Assembly to specially reconvene to look at the PIB, which may as well take some weeks before its passage.’’
The Minister expressed optimism that the bill would be expeditiously looked into by the lawmakers, given that it had taken the country years to get to this stage.
Stakeholders have expressed concern and outrage that while other countries are fast moving with the times by changing obsolete oil and gas laws that hinder fresh investments to pave way for new ones, Nigeria ,that needs revenue and investment more, has failed to pass the law in close to two decades.
According to the minister, the bill is key to repositioning of Nigeria’s oil and gas industry under its post-COVID-19 agenda. “I cannot give a specific timeline on the passage of the PIB because it involves the National Assembly. I can only give you our own timeline and what we have been doing.
“For us, I will tell you that we have finished our job. The drafting process has been concluded and we have also discussed with the relevant stakeholders in the industry.
The Ministry of Justice has also looked at the draft to ensure that there are no issues, and that has been concluded. “Government needs maximum fiscal environment to deal with the COVID-19 crisis. For this reason, we are proposing grand fathering in the new PIB. This, I believe will preserve current government’s take, while also guaranteeing investors’ returns. “It also guarantees that investors can continue with the existing operations while earning favourable returns.’’
The minister explained that, the proposed PIB framework shall be based on core principles of clarity, dynamism, neutrality, open access and fiscal rules of general application.
Sylva added that investments in new acreages will be encouraged with attractive competitive terms in order to achieve economic growth.
He assured that nvestors in existing assets will be able to sign conversion contracts to obtain better terms for existing production, and to be able to explore and produce part of the existing blocks under the new block terms.
According to him, investors that also want to continue operating under the current fiscal terms can choose to do so.
Sylva said that the host communities would be adequately covered to foster sustainable prosperity within the communities, provide direct social and economic benefits from petroleum operations to the host communities. He also maintained that a diversification plan to non-oil economy had become a national imperative due to the impact of the COVID-19 pandemic on the oil and gas industry and other sectors of the economy.
“The PIB will provide a framework for increased petroleum industry activities in terms of developing gas for the domestic market and increasing oil production under competitive terms and support the goal of a stronger non-oil economy for the benefit of all Nigerians,” the Minister maintained.