FG, players polarize on calls for PIA amendment
- NCDMB demands ease of asset swap transactions
Sopuruchi Onwuka
The Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Engr. Simbi Kesiye Wabote, has called for full implementation of the Petroleum Industry Act (PIA) to unlock investments that restore vibrancy in the industry.
Engr Wabote who spoke at the just concluded Nigerian Economic Summit (NES) also advocated took a polar position from recent calls for speedy amendment of the PIA to address fiscal provisions affecting development of deepwater gas.
The Nigerian Gas Association (NGA) and the Oil Producers Trade Section (OPTS) of the Organized Private Sector (OPS) have separately blamed fiscal provisions in the PIA for the stalled investments in development of deepwater fields, pointing at disincentives for harnessing mainly associated gas from oil production investments.
Managing Director of Nigeria Liquefied Natural Gas (NLNG) Limited, Mr Phillip Mshelbila, had also declared at the Practical Nigerian Content Conference in Yenegoa that government must dismantle fiscal and regulatory roadblocks to deepwater gas development to enable upstream producers generate adequate feedstock volumes that would enable the Africa’s largest liquefaction plant scale up its output.
The industry demand for the PIA to be revisited for early amendments is also accompanied with strong resolve to withhold investments in field development and production until clear demarcation have been established on the fiscal terms between oil production investments and gas production as both commodities offer market reward for unified exploration and development investments.
In taking a fresh angle to the debate, Engr Wabote pointed at the tendency for unstable fiscal and legal regimes to wreak more harms in a business environment, arguing that the PIA should instead be fully deployed to boost investor confidence.
He reasoned that making unending changes to the structures set up by PIA could kill the confidence of investors and stall new projects; explaining that the law contains adequate provisions to ignite growth in the energy sector.
“Once a nation or economic sector is known for trial-and-error initiatives, it makes the investors adopt a wait-and-see attitude or move on to other entities,” he pointed out, adding that “it is injurious to the investment climate if we are in a perpetual state of policy modifications or amendment of laws that we are yet to even progress to full implementation.”
While acknowledging the need to seek areas of improvement, he pointed at the risks slow legislative processes pose to the country’s drive to import international capital into the stagnating Nigerian petroleum industry.
Engr Wabote reminded delegates that the industry suffered lack of investment in the two decades it took to legislate the controversial Petroleum Industry Bill (PIB) into the current PIA.
In advising government and key stakeholders to avoid the temptation of tweaking the law at every turn, Engr Wabote stated that what the industry currently needs is ease and speed of transaction approvals to enable investors take decisions to complete ongoing projects and deploy the provisions of the PIA to simulate the necessary growth.
Engr Wabote called for timely decisions on lingering issues on divestments, assignments and acquisitions, bid rounds, inter-agency collaborations, sanctity of contracts, and others required to ignite the growth in the industry.
He recommended reactivation and revamping of midstream industry facilities and infrastructure, including power projects, Port Harcourt and Warri Refineries, and the 615km AKK Pipeline as ignition points for growth, stressing need to get them across the finish line.
