There are demands for huge changes, including from community leaders seeking an increased share of revenues few hours to the passage of the Petroleum Industry Bill (PIB).
There are increased fears that more agitations are in the waiting which could possible shift the date of the final passage of the bill away from this year and again continually denied the country huge investment in the oil and gas industry, Daily Independent reports
The eleventh-hour wrangling over the bill, which aims to modernise Nigeria’s petroleum industry and attract a shrinking pool of global fossil fuel investment dollars has disappointed those who hoped the political alignment of the presidency and the National Assembly would break the jinx that has stalked the overhaul efforts for 20 years.
Among the changes are proposals to publicly sell shares in the Nigerian National Petroleum Corporation (NNPC) and implement market-based prices for gas to power.
Community leaders revived demands to increase their share of petroleum produced in their regions to 10 percent, up from 2.5 percent.
Besides, communities with oil exploration in Northern Nigeria’s Lake Chad region and the middle of the country are also seeking a greater share of oil revenues.
Lagos-based consultancy firm, Financial Derivatives Company (FDC) Limited, had said last week that the failure to pass the oil overhaul bill cost some $15 billion annually in lost investment.
Shell Nigeria Exploration and Production Company (SNEPCo), opposed the passage of the proposed legislation in its present state.
The company stated that the bill, if passed as it is, could throw the gas sector into more crisis and further stunt the growth of the sector, which the country is banking on for much of its revenue as the world moves towards cleaner sources of fuels.
Mr. Bayo Ojulari, Managing Director of SNEPCo, while speaking during an online forum organised by the British Nigeria Chamber of Commerce (NBCC),called for a conference of all stakeholders, to be called by the Minister of State, Petroleum Resources, Chief Timipre Sylva, to resolve the differences.
Ojulari stated that the PIB as it is today is not enabling enough and not fully aligned with the direction that Nigeria has articulated around the “Decade of Gas” as propagated by the administration of President Muhammadu Buhari.
He emphasised the need for a further review of the PIB to ensure that it delivers and contributes to the ambition that Nigeria has set for itself to be in the class of Qatar and Australia whose economies are largely run on revenues from gas.
According to him, with the condition set for exportation of gas resources by companies operating in the sector, the proposed petroleum governance bill will stifle competition.
He said: “The terms and prices of gas development, especially for deep non-associated gas, need to be more competitive. Today, it is actually looking worse than it is in the current environment and that’s an area that has not enjoyed a level of emphasis.
“Today, the PIB does not do any justice or to help to unlock the huge potential that we have in the non-associated gas environments. With the potential of gas to power our economy, the focus should be more on competitive discuss that will stimulate gas.
“Currently, the version of the PIB that we have is not sufficient and will not enable us to incentivise investors to unlock the huge non-associated gas that we have.”
He said in the domestic gas space, Ojulari said the PIB required the fulfilment of domestic gas obligation as a condition to export gas, which potentially puts long-term export gas supply at risk.
He added that the country needs to move away from the “unproductive” debate about satisfying local need before shipping gas abroad.
He called for a delicate balancing between the political drive and the business needs of the PIB, saying that many of those who discuss the matter are approaching it from the point of emotions, rather than reality.
He added:“ A lot of people who talk about the gas business in the gas value chain come from the emotional side. But emotion does not create a business, emotions do not attract investors, emotions do not sign contracts.
“So, I will say that while we recognise those emotional elements, we need to create a platform where the companies and the entities that have these resources will come together in a conference facilitated by the minister of state and let us have that conversation.”
He stated that everybody is currently doing the economics of the gas sector from their own point of view, and there’s no consensus on the way forward for the gas sector in the PIB.
Besides, the Host Communities of Nigeria, oil and gas, (HOSCON) has reminded the lawmakers on the need to ensure that their demand for a 2.5% Production Quantum is adequately reflected in the final document.
The Host Communities during the public debate on the Petroleum Industry Bill, had, among other things, demanded for a 2.5% production quantum from oil companies rather than a 10% equity participation which was suggested by the lawmakers and some other stakeholders.
The HOSCON had argued that accepting a 10% (or any other percentage) of equity participation would in the long run pose the challenge of having to force the host communities to contribute to production cost before profit/loss sharing as the case may be.
The executive of HOSCON led by its national chairman, Dr. Mike Emuh, reiterated their demand for a 2.5% flow station production quantum, noting that it will enable the oil producing communities’ access to crude oil to run the eleven modular refineries recommended.
Reiterating the body’s position in an interview with journalists recently, Emuh had explained that the host communities will find it difficult to contribute its 10% equity participation, pointing out that it is the duties of the Nigerian National Petroleum Corporation, NNPC and the Federal Ministry of Petroleum Resources to undertake that in conjunction with the joint partners in the industry.
They also argued that the offer of 10% equity participation will present a situation where the rich will short-change the people especially where the communities cannot make their contributions.
Dr. Ahmad Lawan, the President of the Senate, has assured the nation that the PIB would be laid on Tuesday by its joint committees on the bill.
He said: “At the moment, we are dotting the i’s and crossing the t’s on the PIB; the Petrol Industry Bill, and by the grace of God, our committees, the joint committees, will finish their work on it by the end of the week, hopefully.
“The reports would be laid on Tuesday in both chambers. This is what we have planned and this is what we’re working towards.”
SOURCE: DailyIndependent