Endless wait for the almighty PIB

The recent remark by Mutiu Sunmonu, the managing director of Shell Petroleum Development Company of Nigeria Limited (SPDC), is reminiscent of the play “Waiting for Godot”, by Samuel Beckett, in which two characters, Vladimir and Estragon, wait endlessly and in vain for the arrival of someone named Godot.

Two weeks ago, players that matter in the Nigerian oil and gas industry, converged on the nation’s capital city of Abuja, under the patronage of the Ministry of Petroleum Resources and the Nigerian National Petroleum Industry (NNPC), to meet, hear the latest industry updates and do business. Essentially, they examined the challenges facing the industry and the way forward.

One of the talking points that dominated discussions and discourses at the conference was the long-awaited Petroleum Industry Bill (PIB), a landmark piece of regulation intended to overhaul the nation’s energy sector.

The general consensus among international oil companies (IOCs) at the event was that the continued delay in passing the PIB into law was creating uncertainties, adding that the uncertainties over the bill are delaying the take-off of fresh projects worth several billion of dollars that would grow industry capacity and reserves.

Hear the country chair of Shell Companies in Nigeria, Sunmonu: “In Shell, we have two big projects we would like to do as soon as we are sure that the environment and the conditions are right. We are all waiting for the almighty PIB to be able to make those decisions.”

Sunmonu said uncertainty over the PIB was preventing the company from making significant offshore, deepwater investments, adding that SPDC had put on hold investment decisions on two key offshore oil and gas projects that would have cost about $30billion till when the new petroleum law is approved.

The delay in passing the PIB apparently is a big threat to the health of the industry. It recently emerged that hopes for a fresh oil licensing round has been dashed due to the long-delayed passage of the bill. Osten Olorunsola, director at the Department of Petroleum Resources, was said to have told Dow Jones Newswires, on the sidelines at the conference that no big time licensing rounds would occur until the bill passes.

The last time oil licensing round was held in Nigeria was in 2007. After then, none has taken place, apparently because of the non-passage of the controversial PIB.

Last year, the bill enjoyed a smooth sail at the House of Representatives during the second reading, raising hopes that the bill would soon be passed into law. But the refusal of the Senate to take the second reading of the bill before it went on recess last year dampened the hopes of many. 

FEMI ASU