The Minister of State for Petroleum Resources, Mr Timipre Sylva, has expressed hope that the Petroleum Industry Bill (PIB) would be passed before the first anniversary of this government, which is by May 29 this year.
Mr Sylva gave the assurances during his maiden press briefing on Thursday in Abuja, where he disclosed that the team working on the PIB is at the final stage of the harmonisation of all the existing versions from 2000 to date -2009, 2012, and 2018 – with consideration to the concerns raised by the industry players to create an enabling environment for investors as well as appropriate government take across the oil and gas value chain.
He said, “Counting on the current harmony between the executive and legislative arms of the government, we are optimistic that both the Petroleum Industry Governance, Administration & Host Communities Bill on one hand and Petroleum Industry Fiscal Bill on the other will be passed within the first anniversary of this administration.”
The minister who explained that special focus will be placed on the midstream and downstream sectors, said two regulators are being considered in the new law. He said there is proposed to be one regulator for the Upstream which would be known as the Commission and another for the midstream and downstream, to be known as the Authority.
The midstream and downstream sectors he said, will particularly open enormous opportunities to local investors and consequently create massive job opportunities in the country.
“For example, investments will be available in pipeline engineering design, procurement and construction, terminal operations, pipe mills, fabrication of pressure vessels, storage facilities, pipe transportation and laying equipment, refineries, central processing facilities and also investment in Gas-based industries,” Sylva said.
“On the upstream side, we are coming up with more robust fiscal provision, acreage management, drilling-or-drop programme, etc. We are not only going to retain investors, multitudes will join the leagues of high-value operators,” he added.
He admitted that the non-passage of the PIB has held Nigeria’s oil industry back for too long and prevented new investments from coming into the sector.
Mr Sylva said the ministry will conduct bid rounds for marginal fields within this year, and ensure settlement of dispute partners in order to pave way for Final Investments Decisions (FIDs) on major capital projects once the PIB is passed.
“New gridding, acreage management and bidding process are thoroughly elucidated in the upcoming PIBs. It is therefore highly desirable that the Bills are passed before any bid round. This is one of the reasons we implore Nigerians to support us in our quest to pass the bills in earnest,” the minister said.
He explained that major bid rounds hinges on the PIB passage when the fiscal environment would be clearer to be able to attract more investors.
Speaking further, Mr Sylva said, deepening domestic gas utilization and overall monetization of gas resource is another key area the ministry will focus on.
He said Nigeria’s gas estimate is about 202TCF with potential for up to 600TCF in undiscovered resources. With the undiscovered potential, he said, Nigeria could be in the same league as Qatar which has the world’s highest GDP per Capita – its growth anchored on natural gas, and Saudi Arabia which has positioned itself as the world’s hub for petrochemicals, creating significant job opportunities and enabling industrialization of the country.
The minister said the Ministry of Petroleum Resources is driving the Nigeria Gas Flare Commercialization Program (NGFCP) with an objective to eliminate gas flaring through technically and commercially sustainable gas utilisation projects developed by competent third-party investors who will be invited to participate in a competitive and transparent bid process.
Nigeria ratified the Paris Climate Change Agreement, and is a signatory to the Global Gas Flaring Partnership principles for global flare-out by 2030 whilst committing to a national flare-out target by the end of this year.
In November, 2018, over 850 parties submitted Expression of Interest (EoI) in the Nigerian Gas Flare Commercialization Programme (NGFCP). 205 Applicants emerged successful and would be invited to submit their proposal for flare gas utilization through the Request for Proposals (RfP) phase of the NGFCP, e360 learnt.
The commercialization approach has been considered from legal, technical, economic, commercial and developmental standpoints, the minister said, adding that about $3.5 billion worth of inward investments is required to achieve the gas flare commercialisation targets by 2020.
The benefits of the programme would include; curbing pollution in local communities, providing households with clean energy, particularly LPG (cooking gas), job creation, increasing electric power generation potential through gas-to-power and alleviating social unrest.
Once operational, projects launched under the NCFCP would reduce Nigeria’s emissions by 13 million tons of CO2 per year, consistent with the President’s commitments to the reduction of Greenhouse Gases under the Paris Climate Change Agreement – which could also be monetized under an emission credits / carbon sale programme at a value range of $400 – 500million, e360 learnt.