Some experts in the Nigerian oil and gas industry on Monday called on the leadership of the new National Assembly to review the Petroleum Industry Bill (PIB) passed by the 7th House of Representatives.
They made the appeal in separate interviews with NAN in Lagos.
Seyi Gambo, former Public Relations Officer, Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), said that the bill had generated mixed reactions.
Gambo said that the perception by some stakeholders in the industry was that the passage of the bill would have no effect as it did not receive the mandatory concurrence from the Senate.
He said that the proposed higher taxes in the PIB would make exploration of oil and gas uneconomical for International Oil Companies (IOCs), adding that this might lead to low investment by the IOCs.
Gambo said that Nigeria currently could not do without the IOCs.
According to him, if the 8th Senate did not review the bill, the uncertainties surrounding it might change the IOCs views on investing in Nigeria depending on how the PIB is implemented.
The expert noted that with the current draft of the PIB, it would be highly unlikely that IOCs would invest in offshore and domestic gas projects in the country.
He expressed worry over the increase in gas tax from 30 per cent to 80 per cent, royalty payment from seven per cent to 12.5 per cent for big producers and the minimal tax allowances for investment incentives on gas.
Mr Chinedu Okoronkwo, National President, Independent Petroleum Marketers Association of Nigeria (IPMAN), charged the 8th Senate to do a thorough review of the bill passed by the 7th House of Representatives.
He said that one of the major problems the bill should solve was lack of infrastructure in the gas sector.
Okoronkwo said that the lack of infrastructure was the reason behind the huge amount of gas that was being flared in the country.
According to him, one of the objectives of the PIB is to enhance government’s revenues through better tax codes and restructuring of joint ventures between the Nigerian National Petroleum Corporation (NNPC) and oil majors.
“But oil majors, who are said to have benefited immensely from the profit sharing contracts of 1993, have raised concerns that the fiscal terms in the new bill could deter investment in the oil and gas industry,” he said.
Okoronkwo said that IOCs operating in Nigeria had also expressed their opposition to certain sections of the fiscal term of the PIB over the years.
He said that they had continued to raise concerns about the proposed fiscal regime in the PIB.
The national president said that some companies sold some of their oil blocks and suspended new investments, especially in deep offshore areas where they had been complaints that the PIB imposed stiffer conditions on operators.