Page 18 - AfrOil Annual Review 2021

AfrOil AUGUST AfrOil

(Image: DPR)
PIB seen providing support

to Nigeria’s “Decade of Gas”

The new oil and gas law aims to address foreign investors concerns about contracts, transparency
and other matters, but it also establishes incentives for delivering gas to the domestic market

WHEN Nigerian President Muhammadu president is expected to sign it into law in the
Buhari launched a major push for the passage near future.
WHAT: and adoption of a new petroleum law last year, This has the potential to be good news for
Abuja drew up the PIB he had multiple reasons to do so. IOCs working in Nigeria (or hoping to do so),
partly because it needed One of the most important of these was the though it will take time to determine whether
to address foreign need to address the concerns that international the PIB lives up to its promise. But it may also
investors’ concerns about oil companies (IOCs) had expressed about give a boost to Nigeria’s domestic fuel and
contracts, transparency, Nigeria. energy sector, in the form of support for domes-
risk and other issues. These IOCs, including long-time investors tic gasification initiatives.
such as Eni (Italy) and Royal Dutch Shell (UK/
WHY: Netherlands) were worried about the country’s Another ambitious initiative
The bill also includes commitment to improving transparency and Buhari has voiced strong support for plans
provisions that will
offer support to domestic ensuring the stability of contracts. They fret- to promote the development of the country’s
gasification plans. ted about the progress of efforts to deter cor- domestic natural and associated gas resources.
ruption, about the risks of working in onshore In late 2019, he declared that the time had
WHAT NEXT: areas populated by communities at odds with come to focus on gas, asserting that Nigeria
These provisions do not the federal government, about investments in was not an oil-producing state but rather a gas-
guarantee success for infrastructure and about other issues. They did rich state that also happened to produce oil. He
“The Decade of Gas.” so frequently enough and loudly enough that declared 2020 “The Year of Gas” and touted his
industry observers started warning that Nigeria administration’s support for a number of ambi-
might lose investment to other countries unless tious initiatives, including the construction of
it took action. the Ajaokuta-Kaduna-Kano (AKK) pipeline, a
The Buhari administration certainly heeded domestic gas supply link, and the building of a
that warning. It submitted the Petroleum Indus- seventh production train for the Nigeria LNG
try Bill (PIB) to both houses of the National (NLNG) consortium.
Assembly in August 2020 and finally succeeded This initiative did not live up to its full poten-
in securing the passage of the legislation in the tial, largely because of economic and logistical
third reading in mid-July of this year. The bill disruption stemming from the coronavirus
is now due to be submitted to Buhari, and the (COVID-19) pandemic.

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