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Current State Of PIB Not Healthy For Business If Passed Into Law- Investors

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Current State Of PIB Not Healthy For Business If Passed Into Law- Investors
Investors in the oil and gas sector believe that the proposed amendment of the Petroleum Industry Bill (PIB) is not healthy for competition in the oil and gas industry.

 

To this end, they said if the proposed Bill is passed into law by the National Assembly upon resumption, it will negatively impact on the oil and gas industry’s competitiveness, future investment decision, government revenue and long term growth.

 

Mike Sangster Chairman of Oil Producing Trade Section (OPTS) who was in company with other major players: Richard Laing (Exxon Mobil); Rick Kennedy (Chevron); Roberto Daniele (ENI); Sam Ezugworie (Shell); and Bunmi Toyobo (Shell) in the industry noted this during a courtesy call to the Senate President, Ahmed Lawan, on Thursday at the senate wing of the National Assembly.

 

He noted that, “although some industry issues have been resolved in the PIB, important drivers of investor’s confidence and FGN revenue were not addressed”.

 

He identified six major areas of concern, which he said if improved, could significantly improve confidence, attract new investments and ensure future government revenue.

 

He said among them are: “Deepwater, domestic gas, preservation of base businesses and rights, segregation of upstream and midstream deemed assets, administrative complexity and absence of a robust dispute resolution framework and capital allowance deductions, all of which are currently major impediments in the sector.”

 

In a document, PIB Concerns and Recommendations presented to the Senate President, the stakeholders decried the high cost of operation in Nigeria, which far above the global average weight.

 

“Nigeria overall project cost are 69% higher than the global average. On a weighted average basis, Nigeria projects cost 69% more than the global average, and operation cost 42% more. 

 

“This premium is most notable for onshore projects (+99% cost and Deepwater projects (63% cost).

 

In his reaction, Senate President Ahmed Lawan said timely passage of the PIB remains a major priority for the National Assembly because of its huge impacts on the country’s economy.

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