Oil Producers Trade Section (OPTS) express views on the proposed Petroleum Industry Bill (PIB) in Nigeria
International and local oil companies under the aegis of Oil Producers Trade Section (OPTS) on Thursday stoutly opposed the passage of the Petroleum Industry Bill (PIB) at the opening session of a two-day public hearing in Abuja, Nigeria.
According to the OPTS, which is a conglomerate of 18 international and indigenous oil companies, though the PIB possesses a unique opportunity to resolve the numerous challenges confronting the oil sector, it only sets out to aggravate it and simultaneously reduce investment potential in the oil sector.
In the presentation made by the OPTS representative and Managing Director, Mobil Producing Nigeria, Mr. Mark Ward, the oil companies said the PIB fell short of addressing the challenges in the oil industry.
He stated: “The PIB presents a unique opportunity to resolve many of these challenges. However, in our view, the bill does not resolve these challenges but it will in fact reduce the much-needed investments to sustain and grow the oil and gas industry.”
He added that when OPTS compared fiscal terms spelt out in the PIB with fiscal terms in 20 other countries, that the trend in these countries was to provide a platform for the balancing of high royalties with lower taxes and vice versa. He argued that the PIB fails to guarantee this because “it significantly increases royalties and taxes and virtually eliminates all at the same time” and thus implies that Nigeria has the harshest fiscal regimes in the world.
“The result is that Nigeria will have one of the harshest fiscal regimes in the world, so harsh in fact, that not only is Nigeria uncompetitive, but the projects are actually uneconomic, meaning there is no acceptable return on investments,” he added.
“With the low regulated domestic gas price and the enormous expenditure required to develop gas infrastructure, we believe that an incentive-based approach to domestic obligations is the best way to achieve the gas development….which Nigeria so clearly needs to jump start the gas revolution,” he stated.
He also contended that the PIB would make oil exploration and production difficult by significantly limiting “your licence area to your field size with a small perimeter boundary”.
According to him, while OPTS supports the objectives of the bill and the reform it calls for given the manner the bill was drafted, it “will not deliver these objectives and will in fact reduce the oil and gas industry contributions to Nigeria”.
The two-day public hearing was organised by the Senate Joint Committee on the PIB.
In other oil news from Nigeria the federal government has approved the establishment of a Legal Task Force (LTF) to be headed by the Minister of Justice and Attorney General of the Federation (AGF), Mohammed Bello Adoke, to prosecute cases of oil theft across the country. The LTF initiative was one of the outcomes of the National Executive Council (NEC) meeting presided over by Vice-President Namadi Sambo.The LTF, according to Governor Emmanuel Uduaghan of Delta State, who is also the chairman of the Presidential Committee on Oil Theft Proliferation and Control, has as members the representatives of the Nigerian National Petroleum Corporation (NNPC), the Armed Forces, Civil Defence, Police, the State Security Service (SSS) and others.
Sourced from various news reports.