Page 5 - AfrOil Week 27 2021

AfrOil COMMENTARY AfrOil

At the time, Buhari said he expected members of IGM Energy, also struck an upbeat note. “This
the House of Representatives and the Senate to time around, there are signs that the PIB might
pass the bill before the end of the year. And ini- stick, and with growing the pressure on listed
tially it appeared that legislators might meet this companies to comply with more stringent reg-
deadline. They passed the PIB in the first reading ulations, it could be make or break for Abuja,”
in late September and then passed it in the sec- he told AfrOil.
ond reading in late October – only to postpone
the third reading indefinitely so that they could Criticism – and a measured response
concentrate on drawing up a budget for 2021. Some observers have been far more critical. For
Subsequently, Ahmad Lawan, the president example, Chief Edwin Clark, the national leader
of Nigeria’s Senate, asserted that the delay would of the Pan-Niger Delta Forum (PANDEF), has
not be lengthy. He declared in January that he denounced the PIB’s provisions covering host
expected the National Assembly to pass the bill communities’ allotment of oil and gas revenues.
in the third reading in April and then send it to In an open letter delivered to Lawan and
the president for signature in May. other prominent legislators, he described the
Somehow, though, the target date for the decision to offer host communities a 3% or 5%
third reading kept slipping back – first to May share of operating expenditures as “satanic and
and then to June. Finally, late last month, mem- unjust” and called for the number to be raised
bers of both chambers pledged to wrap up dis- to 10%. His complaints have been echoed by a
cussion and pass the bill before their annual number of public figures, including represent-
recess began on July 16. atives of host communities in the states of Abia,
And this time they succeeded. On July 1, the Ondo, Edo and Delta and the governors of sev-
PIB passed in the third reading in both the Sen- eral southern states, according to the Nigerian
ate and the House of Representatives. Then on press.
July 6, the Senate set up a conference committee Meanwhile, other observers have offered a
to harmonise the two chambers’ versions of the more measured response. Obo Idornigie, the
bill. Once the committee finishes its work, the vice-president of sub-Saharan African research
PIB can be sent to Buhari, who is expected to for Welligence Energy Analytics, told AfrOil by
sign it in the near future. email earlier this week that it would take time to
assess the new law’s impact on Nigeria and on
Enthusiastic reception foreign investors as well. “We expect investors,
This success has drawn a great deal of positive particularly the incumbents in joint venture On July 1, the
attention from the African Energy Chamber partnerships with NNPC [Nigerian National
(AEC), an industry association formed to pro- Petroleum Corp.], to wait and see how the law PIB passed in the
mote the development of the continent’s oil and unfolds before committing to new joint ven- third reading in
gas resources. ture projects,” he wrote, adding: “NNPC’s joint
In a statement dated July 1, the chamber said venture partnerships with the IOCs cover the both the House of
that the passage of the bill would benefit Nigeria onshore and shallow-water sector.”
financially, economically, politically and dip- One point of interest will be the fate of deep- Representatives
lomatically. “By ensuring an enabling environ- water offshore projects, Idornigie commented.
ment for investors backed by a transparent and “In the deepwater sector, some of the majors and the Senate
strengthened regulatory framework, the PIB will have been negotiating licence extensions on
present significant investment opportunities for their deepwater PSCs [production-sharing
both regional and international stakeholders,” it contracts],” he noted. “The PIB permits ongoing
commented. “At a time when the global energy negotiations on contracts to continue provided
sector is particularly competitive for foreign such contracts are signed within one year of the
capital, the passing of the PIB serves to elevate effective date. The extension of these deepwater
Nigeria as an energy leader on the global stage.” licences under reasonable terms will pave the
NJ Ayuk, the AEC’s executive chairman, way for operators to sanction deepwater projects
spoke enthusiastically about the PIB, describing that have been in the pipeline.”
it as a long-awaited milestone. “For 13 years, our
oil and natural gas industry pushed and waited NNPC’s fate (and other issues)
for this moment. Passing the Petroleum Indus- Analysts should also pay attention to the unfold-
try Bill lays the foundation for a stronger, effi- ing of plans for the restructuring of NNPC into a
cient and attractive energy industry in Nigeria,” corporation that does not receive direct govern-
he remarked. ment funding, he added. “The details on how the
Ayuk also predicted that the West African new NNPC structure will work – particularly,
country would soon reap the benefits of the new [on] how all outstanding liabilities will be paid
law. “What we must do is make this legislation – will be of interest,” he said.
work for Nigerian companies and foreign com- When asked whether the restructuring
panies in the energy sector,” he said. “I believe would make NNPC a more effective partner
that this bill will make the Nigerian energy sec- for IOCs, Idornigie responded by noting that
tor competitive again and you will see rig counts “NNPC’s payment of its share of project fund-
go up. Nigeria will out-innovate, out-produce ing through the government has been a huge
and out-compete those who counted out or bet obstacle and has resulted in the IOCs carrying
against its oil and natural gas industry.” NNPC’s costs over the years for a number of big-
Ian Simm, principal advisor at consultancy ticket projects.”

Week 27 07•July•2021 www. NEWSBASE .com P5