Page 5 - AfrOil Week 20 2021

AfrOil COMMENTARY AfrOil

PEAC makes case for changes Obateru, the group general manager for the
Members of PEAC argued at a meeting with state-owned company’s public affairs division,
Buhari on May 7 that their recommendations said as much in a message to Vanguard. “NNPC
would allow the PIB to offer more benefits to the is owned by the government and the people of
country. In a document presented at that meet- Nigeria,” he wrote. “The ownership structure
ing, the council defended its decision to push for that shall be prescribed for the corporation in
the establishment of a single regulatory agency. the PIB shall, once passed into law and accented
“One regulator with relevant departments to, automatically become the new ownership
will be more efficient and allow for greater structure of the corporation.”
synergy in regulating the entire industry value
chain. Examples are Nigerian Communications More questions to answer
Commission (NCC) and the Nigerian Electric- Nevertheless, in a practical sense, it is not clear
ity Regulatory Commission (NERC),” it wrote. what effect these revisions will have on the pro-
PEAC also asserted that an IPO would help gress of the draft law. Legislators have already
NNPC secure funding once its operational missed the last deadline mooted by the gov-
functions were transferred to a corporate struc- ernment, and they have not yet said when they NNPC has
ture separate from the government that will be might wrap up the third reading of the PIB.
known as NNPC Corp., in line with other sec- Even if that happens relatively quickly, signaled that it
tions of the PIB. “Prepare company for initial though, it will take time to determine how the will not raise
public offer so the enterprise can raise its own new law will affect the oil and gas sector. On the
funding,” it said. one hand, Nigerian officials will have to discuss any objections
Additionally, the council called for phasing how to implement the PIB once it passes and
out price controls on gas, saying that liberal- then take steps to carry out the plans they make. to the revision
isation was needed but could not be rushed. On the other hand, the PIB will not necessar-
“Deregulation is key to stimulating investment,” ily resolve all questions about the industry’s fate. of the PIB
it stated. “To avoid price shocks, a transitional PEAC, for its part, has indicated that it believes
arrangement can be included. Such arrange- the PIB does not go far enough.
ment must specify [a] timeline to end price In its presentation for the May 7 meeting
regulation.” with Buhari, the council said: “Enactment of
the Petroleum Industry Bill (PIB) through the
No technical reasons for delay National Assembly will not of itself immedi-
In a technical sense, the introduction of these ately stimulate investment needed in the oil and
changes should not alter the timeline for debate gas sector. Nigeria should identify key strategic
and passage of the PIB. Under Nigerian law, the projects that will enable the achievement of the
Buhari administration has the right to revise the various objectives – ranging from increased oil
bill in this manner. production through expansion of gas pipelines.
Indeed, Mohammed Mongunu, the chair- These projects should then be the subject of dis-
man of the House of Representatives’ PIB com- cussion with oil sector operators – international
mittee, stressed this point in an interview with oil companies (IOCs) and indigenous compa-
Vanguard on May 16. “The PIB is an executive nies. A process of accelerated approval can be
bill, meaning that the government is free to established, similar to the NLNG [Nigeria LNG]
make changes in it,” he explained. model in 1982. The intention is to ensure that
Meanwhile, NNPC has signalled that it will before the end of this administration, invest-
not raise any objections to the revisions. Kenny ment decisions can be taken.” ™

Lamu Port begins operations

Kenya is kicking off early operations at its new port as it eyes a new role in East African trade

KENYA will begin operations this week at the between the Kenyan interior and the Indian
largest deep-sea port in East Africa, which will Ocean. While a planned oil pipeline remains a
play an important role in facilitating an uptick long way from completion, the opening of Lamu
in regional trade and oil exports from the South also marks a significant milestone towards the
Lokichar basin. export of Kenyan crude.
The first ship docked at Lamu Port’s Berth
One on May 17, a few days ahead of start-up at Launching Lamu
the end point of the $25bn Lamu Port-South Lamu is being developed by China Commu-
Sudan Ethiopia Transport Corridor (LAPS- nications Construction Co. (CCCC) in three
SET) system, which will improve connectivity phases.

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