PIB should be passed immediately or taken out entirely, say stakeholders

Stakeholders have called on the National Assembly and the Federal Government to pass and implement the Petroleum Industry Bill (PIB) immediately or take it out entirely as the bill has become “a political and most ambitious document” retarding progress in Nigeria’s oil and gas sector.

Sola Adeputu, an energy law expert, while making contribution during the Policy Dialogue Roundtable organised by the Petroleum Club recently in Lagos, said that there is need to de-emphasise PIB and move the industry forward.

According to him, “Before the PIB there were existing laws driving the industry and Nigeria was making progress. With the uncertainty surrounding the PIB, the industry has been at a standstill”.

Sena Anthony, former group executive director of the state oil company, Nigerian National Petroleum Corporation (NNPC), said that “part of the confusion in the public space about the PIB is that most people who comment on the bill have not read the document and often end up ascribing to things that were not even mentioned in the document”.

In a keynote presentation titled ‘Nigeria’s Petroleum Sector: Thoughts, Priorities and Initiatives’, Bolaji Osusanya, managing director, Oando Gas and Power, outlined some issues which the incoming government should focus on in the oil and gas sector.

Osusanya said that “the uncertainty of the PIB needs to be addressed immediately especially as it relates to the fiscal terms”, adding that the ambiguity on the hydrocarbon tax has affected the industry negatively.

He called on the need for creative funding of JVs like “gas for funding” model as it is done in “oil for funding”; use of Sovereign Wealth Fund (SWF) and pensions funds to build critical infrastructure.

Osusanya said that the issues around gas development include underdeveloped commercial structure and infrastructure, poor capitalisation of players in the gas sub-sector, slow implementation of the gas master plan and gas infrastructure skewed more to the west/eastern

Nigeria. He said that part of the problems in the gas sector is that “about 70 percent of off-takers are power-based which means that the players are in the hands of a market that is not credit worthy”, adding that there is an urgent need to bail out the deficit in gas infrastructure with a public-private partnership model.

On the downstream sector, Osusanya said that the huge subsidy spend which sometimes is above capital budget of the country is not sustainable with its attendant transparency issues, adding that with the devalued naira currency, the situation has exacerbated.

He said that the issues that have to be dealt with in the downstream sector include poor state of the country’s refineries and import facilities and multiplicity of agencies overseeing the downstream sector.

He said that there is need for the country to deregulate the downstream by putting palliatives ahead and sensitising Nigerians.

Osusanya said that Nigeria needs to transit from petroleum products import-dependent to in-country refining of its crude, adding that the country will reap significant advantages from local refining of crude oil especially on the cost as about 30 percent of the cost of the petroleum products is derived from the logistic cost of importation.

He decried the poor penetration of LPG in the country, adding that the Nigerian Liquefied Natural Gas (NLNG) can meet local demand, noting that there is need to remove kerosene subsidy and push LPG as substitute.