Last week, the annual global oil and gas gathering, Offshore Technology Conference (OTC) was held in Houston, Texas, United States, where stakeholders from across the world converged to discuss technology, offshore oil exploration and production, among other relevant issues, in the oil and gas industry.
One of the issues that featured prominently on the agenda of the Nigerian contingent at the OTC 2013, according to reports, was the Petroleum Industry Bill (PIB), whose passage is being expected to revamp the Nigerian oil industry from years of stagnation.
It is widely believed that the delay in the passage of the bill is doing a great disservice to the nation’s oil industry; hence the need for government to act and save the industry from shrinking further.
According to Philip Asiodu, former chief economic adviser, Nigeria can curb the debilitating effect on the oil and gas industry resulting from the delay in the passage of the long-anticipated PIB by taking and carrying out developmental decisions and activities that can be accomplished while negotiating and acting within existing laws.
The industry is currently regulated by 16 existing Acts such as the Petroleum Act, the Petroleum Profits Tax Law, and the Deep Offshore and Inland Basin Production Sharing Contracts Act.
The PIB, which is an executive bill, primarily seeks to establish the legal and regulatory framework, institutions and regulatory authorities for the industry by harmonising all the laws in the industry into one document, all-encompassing piece of legislation aimed at improving on the general efficiency of the sector.
“It is a sad fact that many important decisions have been held up for more than a decade and some major investments consequently diverted to other countries,” said Asiodu at a recent conference organised by the Nigerian Association for Energy Economics.
He indicated that delays in re-negotiating fiscal provisions in deep offshore production-sharing contracts (PSC) signed in 1993; auctioning new oil concessions; renewing expired Oil Mining Licences (OMLs) and formulating and implementing an internationally competitive fiscal regime for gas production to fuel domestic power production, and promote the establishment of many value-added petrochemical industries, were unnecessary.
The former Federal minister of petroleum faulted a suggestion in some government circles that decisions on auctioning of concession blocks, renewal of Oil Mining Licences (OML), etc, must await the passage of the PIB, adding that “No one knows when the PIB will become law.”
FEMI ASU
