The Nigerian National Petroleum Corporation (NNPC) has called for a legislative framework with clear fiscal terms in order to tap the full potential of the gas resources in the nation’s deepwater acreages.
The Group Managing Director of NNPC, Mr. Mele Kyari, made the call at a one-day public hearing on “Inclusion of Gas Terms in Production Sharing Contracts (PSCs)” organized by the House of Representatives Joint Committee on Gas Resources, Petroleum Resources (Upstream and Downstream).
The GMD who noted that investors needed clarity on fiscal terms to be encouraged to commit their capital for gas development projects, said a functional legislative framework that provides a clear sight on how investors can recoup the capital on investment and make gains is what the Petroleum Industry Bill (PIB) was all about, adding that the passage of the Bill would help resolve issues of fiscal terms in the Production Sharing Contracts (PSC).
He explained that the PSC agreements were focused mainly on crude oil production leaving the gas development component to the discretion of the parties thus making the provision in PSC for development of gas very weak.
“The PSC simply says the parties can sit down and agree on a framework for monetizing the gas on terms that are mutually acceptable,” he noted, stressing that a gas pricing mechanism was urgently needed to drive gas development.
Earlier, the Speaker of the House of Representative, Rt. Hon. Femi Gbajabiamila, said the Joint Committee on Gas and Petroleum Resources was set up in November 2019 to help resolve issues hindering the efficient development and utilization of the abundant natural resources in the country.
He said the public hearing was convened to enable the Committee collate the views of stakeholders for a thorough review of the statutes.