By Udeme Akpan
Despite its huge oil reserves, Nigeria attracted only four percent of Africa’s $ 75 billion oil and gas investment in four years (2015-2019) due to the delay in passing the Bill of the nation’s Petroleum Industry, GDP.
In a document obtained by , Over the weekend, the Director General of the Lagos Chamber of Commerce and Industry, LCCI, Dr. Muda Yusuf, stated: “The oil and gas industry is a major contributor to the economy and revenue of the Nigerian government. Nigeria, with the largest oil and gas reserves in Africa, has enormous untapped potential to achieve its economic development goals, including gas-to-energy ambitions. However, despite having the largest reserves in Africa, Nigeria only received 4% ($ 3 billion) of the $ 75 billion invested on the continent between 2015-19. This underlines the need to create a competitive environment to attract investment to the oil and gas sector.
“Fundamental change in global energy markets driven by advances in the release of unconventional oil resources and increased pull for cleaner energy sources has resulted in a global glut of crude oil, putting pressure on prices. This has been further compounded by the COVID-19 pandemic, potentially putting the viability of ongoing and future projects at risk and creating fierce competition for underinvestments around the world. In addition to the above, the Nigerian oil industry faces many country-specific challenges, including joint venture financing and backlogs, regulatory overlaps, insecurity, and inadequate infrastructure for domestic gas development.
“The Lagos Chamber of Commerce and Industry fully supports the government’s efforts to push for industry reform through a new oil industry bill. The key objectives of GDP 2020, among many others, include reforming the institutional and fiscal framework, further developing Nigeria’s gas sector, creating a framework to support the development of host communities and fostering sustainable prosperity, and attracting new investment. to grow the country’s production capacity. “
He said: “The current bill marks positive steps towards achieving its stated goals. The bill requires ministries, departments and agencies to consult with the Commission before introducing overlapping legislation that will affect the oil and gas industry. It also allows consultation with industry stakeholders before making regulations. The commercialization of NNPC is aimed at improving business efficiency and effectiveness, especially in relation to Joint Venture activities.
“However, some of these improvements seem insufficient to deliver the true value to Nigeria that the bill aims to achieve. Some provisions of the bill could negatively affect the growth of the industry and the economy in general. We strongly believe that on the basis of constructive cooperation between the Nigerian government and other stakeholders, host communities and industry, the objectives of the reform can be successfully achieved. “
However, he said: “GDP must seek to protect existing investments from value erosion. The assets and operations of these investments are the foundation on which new projects can be built. Therefore, it is essential that projects that are already underway can maintain the conditions in which they were designed and approved. Doing so will incentivize the launch of new projects; increase production and revenues for the government and stakeholders, thus ensuring the long-term sustainability of our oil and gas industry. “
However, the Director General pointed out some specific areas that need to be amended in GDP, including Preservation of rights and basic businesses (Sections 92.3, 92.4, 93, 302.3, 311.9.c, 317.4, Third Annex), Deep waters ( Section 267). , Seventh Annex), Segregation of Upstream attributed assets (Sections 302.2 and 317.4), Provisions and capital deductions (263, Fifth Program), Domestic gas (Sections 110, 167, 168) and Administrative compliance burden.
He added: “The Lagos Chamber urges the National Assembly to implement a law that will promote more effective and efficient governance, administration, host community development and fiscal framework for the oil industry. A competitive bill would help preserve the integrity of existing projects, while fostering future production growth and making Nigeria a preferred investment destination. “