The Lagos Chamber of Commerce and Industry (LCCI) has challenged government to accelerate the process that will lead to quick resolution of grey areas that has delayed conclusion of the Petroleum Industry Bill (PIB).
The LCCI which represents a wide spectrum of the country’s private sector identified the importance of the PIB which it said is very critical for Nigeria, saying the country can no longer afford delay in dealing with that piece of Bill.
President of the Chamber, Mr. Babatunde Paul Ruwase, speaking at a stakeholders’ forum on PIB organsed by LCCI in Lagos, regretted that the Bill was introduced over 15 years ago and has undergone several reviews and elicited diverse sentiments among stakeholders making it one of the most contentious bills in recent time.
He said that as a way of dealing with these challenges, the PIB has been divided into four different segments, the Petroleum Industry Governance Bill (PIGB), Petroleum Industry Fiscal Bill (PIFB), Petroleum Industry Administration Bill (PIAB) and Petroleum Host and Impacted Communities Development Bill (PAICDB), and that out of the four bills, only the PIGB has been passed by the National Assembly, yet the President has declined to sign it into law.
He explained that introduction of the PIB was underscored by the fact that the oil and gas industry is very strategic to the economy of Nigeria, and the industry currently accounts for about 80 per cent of government revenue and about 95 per cent of foreign exchange earnings.
“Today, that revenue is facing a serious risk of shortfall from illegal bunkering, declining demand from buyers, stalled investments in the oil and gas sector and emerging technology in renewable energy”, he said.
He said, “We are concerned that in the face of rapidly evolving competition in the global oil and gas market, and the increasing challenges such as insecurity and uncertain investment climate, the uncertainty around the PIB continues to undermine the confidence of investors in the sector.
He Lamented that several oil producing and servicing companies have left the country on account of these challenges, adding, “We are aware of the divergent views among stakeholders on the potential impacts of the delay”, he said.
He further stated that many operators in the oil and gas industry have expressed concern that, “The Niger Delta region remains a dangerous place to operate for oil companies and this add to operating cost. Special security arrangements such as provision of convoys, security support and flight operations currently add around 12 per cent to Joint Venture (JV) costs.”
He said the government also finds it difficult to meet its own share of JV funding obligations, and this has seriously undermined growth in the onshore and shallow water exploration especially in the country’s gas sector.
Ruwase, said the current state of PIB form does not provide sufficient incentives for the growth of domestic gas supply, and the proposal to increase tax to 80 per cent from the current 30 per cent and to remove existing incentives makes matters even worse.
He therefore appealed that considering the challenges currently hindering domestic gas supply, such as inadequate gas processing, transportation infrastructure and the low domestic gas price, it will be difficult to see the country achieving its target of improving power supply.