Stakeholders in the Nigerian oil and gas sector at the weekend have expressed doubt over the ability of the current Petroleum Industry Bill (PIB) to solve numerous problems facing the industry, and called for a review of the bill before it is passed into law.
The oil and gas experts, who spoke at a breakfast seminar organised by KPMG, a global Professional Services and financial advisory company, which held in Lagos, noted that there were opportunities in the oil and gas sector, expressing regrets that Nigerians were not taking advantage of them.
KPMG Global Head, Energy and Natural Resources, Michiel Soeting, whose speech was titled: “Petroleum Industry Regulation: Critical Success Factors,” noted that Nigeria had excellent geology but low capacity, adding that the capacity still needed a lot of improvement.
“Therefore the PIB should be able to create structure in the human capacity development. It needs to build the future of the sector and at the same time, create prosperity for all Nigerians in the future.
The International Oil Companies (IOCs) should focus on transfer of knowledge and local content in the sector when doing business in the Nigeria,” he added.
While highlighting the fiscal provision of the PIB, the stakeholders said one of the objectives of the bill was to establish a progressive fiscal framework that would encourage investment in the petroleum industry while optimising revenues accruing to Federal Government.
“The bill seeks to achieve the objective by revising the fiscal regime in the industry. However, it remains to be seen if the revised fiscal regime will encourage further investment in the industry.
“Another objective of the PIB is to optimise domestic gas supplies. It is however unclear how the PIB, in its current form, will achieve this objective, especially considering that the fiscal incentives for upstream gas development/utilisation under the PIB are less attractive than what currently obtains under Petroleum Profit tax (PPT) regime,” he added.
Suggesting the way forward for the industry, KPMG in its concluding comment, said the version of the PIB that would be eventually passed into law may be different from the current version submitted to the National Assembly.
“Still companies engaged in the upstream petroleum operations and other stakeholders in the Nigerian oil and gas industry, will be well-advised to critically review (and stimulate)the impact the bill will have on their operations if enacted in its current form.
“This is necessary to ensure that crucial issues are raised and addressed before the bill is passed by the by the National Assembly and signed into law by the President,” the firm stated.