The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has raised concerns over alleged alterations to the Petroleum Industry Act, citing the removal of some fiscal provisions and moving them to the Nigeria Revenue Act, describing the development as appalling and capable of eroding investors’ confidence in the sector.
PENGASSAN President, Comrade Festus Osifo, raised these concerns on Wednesday, while welcoming participants to the 5th Labour and Energy Summit in Abuja, where he also faulted the use of executive order by the Federal Government to amend provisions of the law.
Recall that the Petroleum Industry Act (PIA) was passed in 2021 by the National Assembly and signed into law on August 16, 2021.
It was conceptualised to overhaul the legal, fiscal, and regulatory framework of Nigeria’s oil and gas sector, which later saw the metamorphosis of the Nigerian National Petroleum Corporation (NNPC) into a commercialized limited liability company (NNPC Ltd).
Osifo argued that the capital-intensive nature of the oil and gas industry makes it more germane to exercise caution in tinkering with the laws governing the sector.
“Host communities need confidence. Governments need sustainable revenues. Nigerians need an industry that translates our enormous hydrocarbon resources into economic prosperity.
“For this to happen, our regulatory environment must be predictable, transparent, efficient and fair to all. The Petroleum Industry Act of 2021 represented a significant milestone after decades of attempts to reform the industry.
“Five years into its implementation, however, we have seen considerable alterations to the framework, including the removal of some fiscal provisions and their movement to the Nigeria Revenue Act, as well as the use of an executive order to amend provisions of the law; “Osifo lamented.
He said rather than instil confidence or promote stability, frequent alterations amplify uncertainty and disruption in the sector.
The PENGASSAN President, however, advised that policies that support local refining of petroleum products, including expansion of Liquefied Natural Gas and Compressed Natural Gas, should be encouraged.
Osifo maintained that two principal petroleum regulators currently exist within the ambit of the PIA, the NUPRC for the upstream operations and the NMDPRA for the midstream and downstream, alongside several other federal and state institutions, whose statutory responsibilities intersect with oil and gas operations.
PENGASSAN said the main challenge was not in the number of institutions, but their efficiency in the delivery of their mandates.
“When responsibilities overlap, operators should not be subjected to repetitive approvals, multiple inspections or conflicting directives. Regulation must provide oversight without creating avoidable due decreases.
“Is our approval process sufficiently efficient to attract investment? Can operators make long-lasting decisions with certainty about our fiscal and regulatory environment? Are indigenous operators being supported to grow while maintaining acceptable operational and safety standards? And importantly to us at Staff Union, as the industry evolves, are the interests and livelihoods of Nigeria’s oil and gas workers adequately protected?
“Regulation should never become an obstacle to investment, but Nigeria should never become an excuse for weak standards. There must be a balance. As an association, we remain particularly concerned about the human consequences of regulatory and commercial decisions.
“Licensing and assets may change hands, but workers are not commodities to be discarded at will. When major acquisitions and divestments occur, jobs are not crude benefits. Pensions, collective bargaining agreements and other established life of workers must be protected,” he told participants at the summit held at the Transcorp Hilton Abuja.
Osifo, however, acknowledged the impact of international technology in the oil and gas industry, but cautioned that the incursion of expatriate workforce must never become a mechanism for replacing qualified Nigerians with foreign personnel in jobs for which local capacity exists.
According to him, the Nigerian Content Framework requires succession plans, understudies and deliberate naturalisation of expatriate positions.
Making further suggestions to the relevant stakeholders, he said, “These positions must be enforced. Every expatriate engaged should ultimately leave behind greater Nigerian capacity. We cannot breach local content in procurement while neglecting local content in employment and human capital development.
“Our regulators must therefore work with the operators and us to ensure that the expatriate workers’ approvals are justified, monitored and tied to measurable knowledge transfer.
“Another challenge is the length of some approval processes. Capital is mobile, and investors will naturally gravitate towards jurisdictions where there is clarity and efficiency, so our process must be clear, and our systems must be efficient.
“Nigeria cannot afford processes that unnecessarily delay new development plans, final investment decisions, and other decisions capable of increasing production. At the same time, speed must never come at the expense of proper oversight. As I said earlier, there must always be a balance.
“What we require is not weak regulations. What we need is smarter regulations. Regulations that understand commercial realities, embrace technology and eliminate unnecessary duplication.
“All operators are accountable and give investors confidence that the rules will not suddenly change midway through the game. However, good regulations on paper cannot transform an industry without enforcement. Health and safety, environmental protection, local content, good labour practices and operational integrity must be consistently enforced.
“The life of a Nigerian worker must never become the price we pay for increased production. Every worker who leaves home desires to return safely to his or her family. Nigeria possesses enormous crude and gas resources, yet our citizens and industry continue to struggle with energy availability and affordability.
“Our frameworks must support domestic refining, gas processing and the expansion of LPG, CNG and LNG infrastructures. Our gas resources present enormous opportunities for power generation, petrochemicals, fertilisers, transportation and industrialisation. But resources beneath the ground create little value until investments are made to make them usable”.
SOURCE: Independent