The Lagos Chamber of Commerce and Industry (LCCI) has expressed fears that some provisions of the new Petroleum Industry Bill (PIB) could adversely affect sustained growth of the oil and gas industry if the Bill is passed into law in its present form.
It, therefore, canvassed the need for the National Assembly to re-appraise the provisions and amend them before the Bill is passed into law in order to make the implementation impact positively on the industry and the economy.
The Organised Private Sector (OPS) group, in its Economic Outlook Report for 2021 noted that government’s efforts to reform the hydrocarbon resources industry through the PIB 2020 Bill remained desirable given its key objectives which include, reforming the institutional and fiscal framework, developing Nigeria’s gas sector further, creating a framework to support the development of host communities, fostering sustainable prosperity and bringing in new investments to grow the country’s production capacity, among others.
The chamber also pointed that the bill mandated that Ministries, Departments and Agencies (MDAs) consult with with industry stakeholders before making regulations and commercialisation of NNPC to improve business efficiency and effectiveness, especially in relation to Joint Venture activities
While noting that some of these improvements appear insufficient to deliver the true value which the Bill seeks to achieve through its provisions, Director General of the chamber, Dr Muda Yusuf, explained that Nigeria being largest oil and gas producer in Africa, had huge untapped potential to achieve its economic development goals including gas-to-power ambitions.
According to him, despite having the largest reserves in Africa, the country only recovered four percent (or $3 billion) from the $75 billion invested between 2015 and 2019.
Yusuf stressed that this underscored the need to create a competitive environment to attract investment to the nation’s oil and gas sector.
As a legislative step towards achieving this, the chamber’s boss urged the National Assembly to put in place a law that would promote a more effective and efficient governance, administration, host community development and fiscal framework for the petroleum industry.
He expatiated: “We firmly believe that based on constructive co-operation between the government and other stakeholders, host communities and the industry, the objectives of the reform can be successfully met.
“A competitive bill would help preserve the integrity of the existing projects and also encourage future growth of production and make Nigeria an investment destination of choice”, Yusuf added.
The OPS group recommended that the PIB should seek to protect existing investments from value erosion and that the assets and operations from the investments remained the foundation upon which new projects can be built.