To survive in the modern low oil price world, the passage and assent to the Petroleum Industry Governance Bill (PIGB) is critical, Dr Ibe Kachikwu, Minister of State Petroleum Resources, said Tuesday in Abuja.
The minister said Nigeria presently operates one of the highest costs of extraction among oil provinces in the world, and as such must reduce the cost of production “If the country is to be competitive in the modern low oil price world.
Dr. Kachikwu who was speaking at a symposium on the next steps for the PIGB, convened by the Nigeria Extractive Industries Transparency Initiative (NEITI), said, “Our window of opportunity to benefit maximally from the petroleum industry is narrowing, it is clear that the shale play revolution is gradually changing the geopolitics of oil, with ripple effects likely to linger on for years which could have a serious global implication if we don’t put our house in order.”
Read: The House of Representatives version of the PIGB
He noted that with North America becoming more energy self-reliant, Europe and China having the alternative energy technology, and numerous discoveries of petroleum in East and Sub-Saharan Africa region, it should be a national priority for Nigeria to have certainty and clarity over operations on the petroleum industry as it will foster more licensing rounds, enhance revenues and increased economic activities.
Read: Senate version of the PIGB
“Our policy response in this regard should be to grow gas based industries and start looking inwards by capturing the Nigerian market rather than searching for foreign market. Domestic utilization of our gas resources will help Nigeria grow its local manufacturing sector,” Kachikwu said.
While commending the National Assembly for passage of the PIGB and expresseing optimism about its assent, Kachikwu however added that it is not yet uhuru as the fiscals aspect of the bill which will address the revenue inflow to both the State and investors is still on the offing.
“Since the fiscal tool remains an important tool for managing our oil and gas resources, it is imperative to critically and urgently fix the fiscals dilemmas to ensure viability of the industry as well as providing a fair return to the state while offering a risk balanced return to the investors,” he added.
In his remarks, executive Secretary of NEITI, Mr Waziri Adio, while also commending the National Assembly for passage of the PIGB, however emphasized that the job is far from being done.
Adio said the real job now will be about ensuring effective implementation of the resultant laws in ways that will reposition and transform the Nigerian oil and gas sector.
He said it is hoped that the symposium will answer question bothering on what transitional arrangements are being contemplated, the plan for fiscal, host community and administrative bills, and well as how to ensure that the new institutions created by the bills do not end up as replicas of the existing ones, or even worse, among others.
“The ultimate goal, the desirable end, is the transformation of the sector for the benefit of Nigeria and Nigerians… Time is running out… we have wasted so much time at enormous costs, time is luxury we don’t have again,” Adio said.
In his presentation titled highlights of the PIGB, Lead Resource Person, Mr. Israel Aye, explained that the main objective of the PIBG is to create governing institutions with clear and separate roles, establish a framework for the creation of a commercially oriented and profit driven entities, promote transparency and accountability, among others.
He explained that the proposed NPC is designed to have an 11 man management board, be self-funded and to operate as a commercial entity across the energy value chain. Aye emphasized that while improving oil reserves is good, oil reserves is however, not a ticket to good life. “It is the management of the resources that leads to good life,” he said, adding that a complete transformation of the industry requires passing the other three segments of the Petroleum Industry Bill (PIB) which are the fiscals, administrative and host community bills.
Also in his remarks, representative of the Oil Producers Trade Section (OPTS) Mr. Kester Mogbile, emphasized that a good legislation should be able to create value for both the country and investors.
While stating that OPTS align and support the reforms proposed by the PIGB, he said investors seek an operating environment that guarantee some level of predictability and stability in the market.