Chris Uba and Peter Uzoho
The Chairman of the Petroleum Technology Association of Nigeria (PETAN), Mr. Bank-Anthony Okoroafor, has advised the newly-appointed Minister of State for Petroleum Resources, Mr. Timipre Sylva, to collaborate with the National Assembly, the chief of staff to the president and other relevant stakeholders for the successful passage and assent to the Petroleum Industry Bill (PIB).
This is just as the Director-General, Lagos Chamber of Commerce and Industry (LCCI), Mr. Muda Yusuf, has faulted the merging of the Ministry of Finance and Ministry of Budget and National Planning, saying that the job would be enormous for the minister.
Okoroafor, who specifically directed his advice to Sylva, in a statement made available to THISDAY, urged the former Governor to work towards timely conclusion of the ongoing industry reforms.
He pointed out that the delay in passing and assenting to the bill was holding down lots of Final Investment Decisions (FIDs) and critical investment.
Okoroafor said: “The passage of and the assent by Mr. President to the PIG bills is important to send a signal to the market that this government is serious about the oil reform agenda.
“The uncertainty created by the lack of passage of the reforms have significantly affected investments in the Nigerian oil and gas sector.
“Work with the legislators to expedite the passage of the relevant bills associated with the section 16 of the petroleum act and incorporate feedbacks from the public hearing
“We need to be sending our investor friendly messaging to remove this negative cloud on investments in Nigeria.
“Everything that is anti-investment, anti-entrepreneurs must be removed. Sanctity of contracts and rule of law. Rule of Law must be supreme. Sanctity of contracts must be respected”.
In addition, the PETAN boss urged the minister to support competitive Production Sharing Contracts (PSC) Fiscal terms which enable monetisation of deep offshore gas.
He, however, urged him to also support existing investor commitments, ensure fiscal terms remain competitive, enable conducive business environment and
ensure safety of lives and security of assets.
He further said: “A good approach is to establish a coast guard to be responsible in protecting all assets and personnel in water instead of all companies having their own security and security vessels/gun boats.
“Improving the efficiency and effectiveness of institutions responsible for contract approval processes. Resolve ongoing PSC disputes. Sign dispute settlement agreement and new PSC agreement for OML 118 which is the template for other PSC’s. This will definitely unlock the entire deep offshore market and bring most projects to FID.
“The proposed deep offshore/inland basin PSC amendment bill 2018 seeking to introduce 50 per cent royalty in revenue above $20/barrel will drive investments to other countries. There are lots of discoveries everywhere and we should desist from acts that are not investment friendly.
“This would worsen our competitiveness thereby limiting our ability to attract investment and will consequently hamper long term oil production growth. With 50 per cent royalty, NPV will be very low and unattractive for investment. 15 per cent IRR not enough in Nigeria because risks are high. This can be enough in USA or middle east because of low risk”.
Meanwhile, Yusuf, described the split of Ministries of Power and Works/Housing as, “good in the sense that it will make effectiveness as the ministers will be enabled to have concentration unlike when one minister was overseeing them.
“As for Trade, Industry and Investment, Otunba Adebayo is a fine gentleman. He is a former Governor of Ekiti State. We don’t know his capability yet. But we are going to engage him,” the LCCI boss added.
On his part, the National President of the Nigerian Association of Chambers of Commerce Industry, Mines, Agriculture (NACCIMA), Hajiya Saratu Iya Aliyu, said the association would be happy to work with the ministers, especially those overseeing Industry, Trade and Investment ministry.
“NACCIMA along with the OPS has been meeting with President Muhammadu Buhari. We are going to be with them. I plead that they work in the best interest of the country,” she said.
