PIB: STAKEHOLDERS IN THE OIL INDUSTRY SHOULD FIND A WAY OF PRODUCING OIL CHEAPER AT THE LARGEST VOLUME – PROF. OSINBAJO

Vice President Yemi Osinbajo (SAN)

Nigeria’s oil and gas sector, the mainstay of Nigeria’s economy, is still largely governed by the Petroleum Act and the Petroleum Profit Tax (PPT) Act, enacted since 1969 and 1959 respectively. Since the enactment of these laws, the global oil and gas industry has changed significantly from an investment, governance and fiscal perspective. Although certain obsolete aspects of the aforementioned Acts have been amended, their inadequacies are evident, contributing to the development of the Petroleum Industry Bill (PIB or “the Bill”), which was first presented to the National Assembly in 2008. Over 10 years later, the Bill is yet to be enacted, leading to increased uncertainty and hindering the flow of the desired investments to the Nigerian oil and gas sector. On 28th September 2020, President Muhammadu Buhari presented the PIB to the National Assembly for consideration. The Bill seeks to introduce pertinent changes to the governance, administrative, regulatory and fiscal framework of the Nigerian oil and gas industry, in order to ensure transparency, strengthen the governing institutions and attract investment capital, among other objectives. Vice President Yemi Osinbajo (SAN), at a virtual meeting on the Petroleum Industry Bill (PIB) with stakeholders in the industry under the auspices of the Oil Producers Trade Section (OPTS) in Nigeria, and Independent Petroleum Producers Group (IPPG) on Tuesday urged stakeholders in the oil industry to find and agree on cheaper means of producing oil while also ensuring a more competitive environment that meets the needs and purposes of the Nigerian nation including the largest production volumes possible. The meeting held Tuesday afternoon just as consultations ahead of the passage of the Petroleum Industry Bill (PIB) continue.

According to Prof. Osinbajo: “We need to agree on terms that will give us a more competitive environment. We should find a way of producing oil cheaper at the largest volume possible given the circumstances and future of oil itself, and of course, given our requirements and needs”. Continuing the Vice President said: “The other point is that of gas. To sound the question of reconciling and maintaining our domestic gas obligation, and at the same time improving the gas environment in such a way that we are able to benefit maximally from it as a business and government. I like the concept that gas should be an enabler for quick development and I think that we must reach some kind of balance with this, especially with this question around domestic gas obligation. I would like OPTS and IPPG to look more carefully and see in what ways we can come to some agreements as to how it should be done. Businesses would like to invest and invest more in this environment. So, that is the point of convergence. We want more investments and obviously state governments like more investments, and you (private companies) would like to invest so that you can make more money. No question about that; what we should seek to do is to see to what extent we can come to that convergence”.

Mr. Timipre Silva, said the interaction with the stakeholders in the petroleum industry is indicative of their commitment to the transformation of the industry through the PIB, he assured that working with other stakeholders, including the National Assembly, the PIB as conceived by the Buhari administration would be passed into law. The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mr. Mele Kyari said that most of the concerns raised by stakeholders have been addressed in the proposal before the National Assembly, noting that the Federal Government has moved from its previous position to one that is more competitive and attractive to investors. Commending the efforts of the Buhari administration in guiding the process of having a new law for the industry, the Chairman of OPTS, Mr. Mike Sangster, who is also the Managing Director/Chief Executive of Total E&P Nigeria Ltd, said stakeholders remain committed to making Nigeria the “preeminent hydrocarbon province” in the region and the world.

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