Page 7 - DMEA Week 01

DMEA COMMENTARY DMEA
Nigeria may be heading for trouble
The West African state’s oil minister is optimistic about the prospects for positive change in the hydrocarbon sector. He may be speaking too soon
NIGERIA
WHAT:
Sylva has lauded the Nigerian oil and gas sector’s achievements in 2019.
WHY:
One of the victories he highlighted may drive investors away in the long term.
WHAT NEXT:
Nigeria’s government may not be able to secure passage of a new oil and gas law by mid-2020.
NIGERIA’S oil minister indicated recently that he was optimistic about the prospects for posi- tive change in the country’s hydrocarbon sector. There are signs, though, that his upbeat remarks are premature.
On January 1, the News Agency of Nigeria (NAN) quoted Timipre Sylva, the Minister of State for Petroleum Resources, as saying that 2019 had been a prosperous and busy year for the country’s oil and gas industry. According to Sylva, the ministry claimed a number of major victories last year, including but not limited to the signing of a final investment decision (FID) agreement on the expansion of Nigeria LNG (NLNG), the passage of amendments to existing legislation covering deepwater offshore projects and the discovery of new crude oil reserves in the Upper Benue Trough.
The minister went on to say that he hoped the federal government would be able to secure the passage of a new oil and gas law in the near term. Specifically, he stated that he wanted to see the Petroleum Industry Governance Bill (PIGB) take effect in mid-2020. This goal is within reach, since reviews of the draft leg- islation have reached an advanced stage, he claimed.
“We look forward to delivering on all our
aspirations as we remain committed and focused in the new year,” NAN quoted him as saying.
Accentuate the positive
Sylva and his ministry have not been the only parties in Abuja to accentuate the positive.
On January 2, Nigerian National Petroleum Corp. (NNPC) issued a financial and opera- tional update showing that the number of van- dalism incidents affecting its pipeline network had plummeted in October of last year. In that month, it said, NNPC registered only 35 exam- ples of such damage, down by 81% on the Sep- tember figure of 186. It also noted that only one of these incidents had involved the full rupture of a pipeline.
The report also noted that NNPC had posted a trade surplus of NGN13.23bn ($36.3mn) in October, up by 54% on the previous month’s fig- ure of NGN8.59bn. This development marked the continuation of a positive trend that began earlier in the year, it said.
It also attributed most of the improvement in the trade surplus to NNPC’s main upstream subsidiary, Nigerian Petroleum Development Co. (NPDC). More than half of the uptick stemmed from NPDC’s own rising trade surplus, it explained.
Sylva’s optimism may be overstated, especially with respect to securing the rapid passage of a new oil law.
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