Page 6 - AfrElec Week 34

AfrElec COMMENTARY AfrElec

Nigeria floats new oil law at last

After more than two decades of struggle and failure, the presidential administration has
submitted its Petroleum Industry Bill (PIB) to the National Assembly

NIGERIA NIGERIA’S government has spent more than investors that Nigerian projects were not too
two decades trying to formulate and approve risky. “We need to get deliberate with the PIB in
legislation that provided appropriate and com- addressing fiscal issues,” she said. “The country
WHAT: prehensive guidance for the oil and gas sector. has suffered from unnecessary delays from the
The latest version of the It did manage to pass the (sadly inadequate) PIB. Investors are not making a lot of decisions
bill was presented to Petroleum Law in 2004, but it has been trying because of the delayed PIB. Available capital can
legislators on August 18 ever since to replace it with something better. only come into the country if people see that
For more years, all such attempts failed. The their investments are secured.”
WHY: presidential administration submitted a new
Local and foreign draft to the National Assembly in 2007, to no Support from local business leaders
companies, along with avail, and its second attempt also yielded no Nigerian business leaders are also pulling for
business leaders, hope results. It came closer during its third attempt in adoption of the bill.
the PIB will give the oil 2018, when it submitted four separate bills cov- Joseph Nwakwue, the head of the Nigeria
and gas sector a better ering governance, finance, administration and Council of the Society of Petroleum Engineers
foundation for success social welfare issues. However, the governance (SPE), said last week that the PIB could dispel
bill was the only legislation to make it out of the widespread uncertainty about the security of
WHAT NEXT: National Assembly, and President Muhammadu investments in the country. “We used to be a
This year’s upsets make Buhari did not sign it. choice destination for investment, but I am
quick passage of the bill This time around, the government has vowed afraid we have lost that place over time,” he told
more likely to secure a different outcome. Timipre Sylva, the reporters in Lagos. “Key considerations for
Minister of State for Petroleum Resources, and investors are resource endowment/density, fiscal
other high-ranking officials have said Abuja is terms, ease of doing business, et cetera. We have
determined to pass and enact a new oil and gas slipped by most measures, but there is scope for
law before the end of this year. a rebound if we get the PIB right.”
Buhari’s administration has a chance of He added: “The Minister of State for Petro-
achieving its aim this year. The president and the leum Resources, Chief Timipre Sylva, has said
Federal Executive Council recently approved hopefully [the bill] will be passed before the
the most recent draft of the Petroleum Industry year ends. We are hoping and praying that this
Bill (PIB), and representatives of the Ministry of happens.”
Justice delivered it to the National Assembly for Likewise, Michael Adebayo, the chairman of
debate on August 18. the oil and gas sector team at the Manufacturers
Association of Nigeria (MAN), stated last week
Domestic operators’ response that he hoped the PIB would be signed into law
There do not appear to be any immediate obsta- quickly. The adoption of the law would greatly
cles to passage of the PIB. benefit Nigerian manufacturers by increasing
The head of Dupri Oil, a domestic firm, com- the amount of gas available for electricity gen-
plained earlier this month that the government eration, he said.
did not seek enough input from independent “The government is working to make sure
operators such as his own company. He also that gas is available for domestic consumption
indicated, though, that Dupri Oil would com- and must be sold in naira,” he was quoted as say-
ment when the PIB had reached the point in the ing by SunNewsOnline.com. “Before the end
legislative process where it became the subject of of 2020, [if] the PIB is implemented, we would
public hearings. enjoy maximum benefit and the nation’s econ-
Other Nigerian independents have struck a omy would experience a boom because more
more upbeat note. For example, Chichi Emenike, consumers of gas would emerge, gas would
the head of gas ventures at Neconde Energy, become more relevant to the Nigerian economy
said at a webinar last week that she expected the than oil, and investment [would] improve.”
PIB to lay the groundwork for the development
of Nigeria’s vast natural gas and associated gas Foreign investors weigh in
resources, in line with the government’s plans to The bill also seems to have some support among
end flaring and promote domestic gas-to-power foreign investors.
projects. Mike Sangster, the managing director of
She also said that the bill would go a long Total Exploration and Production Nigeria, a
way towards reassuring current and potential subsidiary of the French major Total, said earlier

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