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DMEA COMMENTARY DMEA

time – more than 10 years, in fact. At the same (NAPE), made that argument last week. Speak-
time, international oil companies (IOCs) have ing during a virtual workshop, he urged Abuja to
also been eager to see Nigeria establish a new take concrete action for the sake of the country’s
legal regime covering all facets of the oil and oil and gas industry.
gas industry. This is partly because they are “[The] Nigerian government’s failure to
keen to ensure the stability of their contracts, approve the PIB has stalled investment in the
but it is also because they are anxious about the exploration of oil and gas industry in the coun-
changes that the government made last year to try, as only the NNPC is operating. This is not
the Deep Offshore and Inland Basin Produc- good for the industry,” he declared. “The indus-
tion Sharing Contract Act, which governs off- try, especially the upstream [sector], needs a lot
shore oilfields. of palliatives, waivers and stimulus to operators
Their anxiety is not unfounded. Nigeria’s to enable them to sustain employment. We need
government appears to have amended that leg- [the] government to put policies in place to get
islation in a bid to bolster its claim to more than things done properly.”
$62bn in purportedly lost revenues. But this sum The NAPE president indicated that he did not
pales next to the amount that Nigeria may have share Sylva’s patience with the slow pace of delib-
lost as a result of dragging its feet on the PIB. erations on the PIB. The government has actively
Four years ago, the Nigeria Extractive Indus- alienated investors by not adopting a new oil law
tries Transparency Initiative (NEITI) argued in good time, he argued.
in a policy brief that the lack of an oil law had “Exploration is expensive, especially here.
already cost the country around $200bn worth So as an investor, if I don’t see any seriousness
of oil revenue – and had contributed to a decline in the government to show how safe my invest-
of more than 14% in crude production between ment will be, I will keep [my money] elsewhere,”
2012 and 2016. Presumably the losses have only he said. “Until [the] PIB is passed, investors will
grown larger since then. continue to look elsewhere to invest. So there is
no better time than now to [collaborate] on this
Remaining obstacles issue and get the bill passed.”
In other words, the failure to update the oil Tarka does have a point. If Nigeria is able to
law still appears to be the biggest obstacle to put the PIB into effect before the end of this year,
investment. it is likely to attract more interest to its next off-
Alex Tarka, the president of the Nigerian shore licensing round, which is due to take place
Association of Petroleum Explorationists next year. ™

Week 30 30•July•2020 www. NEWSBASE .com P5