$72bn investments lost as FG dithers on PIB

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The non-passage of the Petroleum Industry Bill (PIB) has cost Nigeria a whopping $72 billion in terms of investment in the last seven years, BusinessDay has learnt. This figure is based on an average investment profile of $12 billion per annum which goes to the oil and gas industry.

Analysts believe that the non-passage of the bill would continue to haunt the country with regard to its production level which it intends to increase in the near term.

Already, the country is experiencing about 40 percent decrease in production, resulting in a sharp drop in government revenue and considerable negative impact on job creation and on the wider economy.

The bill is meant to energise the oil and gas sector, grow production capacity, reform the institutional framework, and enhance linkage of the industry to the broader economy.

But unfortunately, vested interests have continued to plague the passage of the bill and have dampened the interest of many stakeholders that had held the view that there would be a new dawn in the petroleum industry.

Besides, there is a North-South dichotomy among the legislators. While some of them see the bill as benefitting a particular section of the country, some others see it as an attempt to further impoverish some parts of the country.

A good number of deepwater projects have remained on the drawing board for some time now because the PIB has not been passed into law. The development of these fields – such as Bonga North and South, Erha North – which would have added to the level of the country’s oil production cannot continue because of the non-passage of the bill. These projects would need an investment in the region of $5 billion each, and they can create over 10,000 direct and over 50,000 indirect jobs.

Analysts also said the planned investments in the sector between now and 2020, estimated at about of $100 billion, may not be realisable without the passage of the bill. Already, over $50 billion of investment has been stalled in the oil and gas industry in the last four to five years, an average of about $12 billion every year.

However, there seems to be hope in the horizon as Aminu Waziri Tambuwal, Speaker of the House of Representatives, has said the bill currently before the National Assembly would become law very soon.

Tambuwal, who gave this assurance in Lagos at the Oil Trading and Logistics Expo, said his members were working hard to reflect the input of every state on the bill, adding that the lawmakers at the lower house realised the import of the bill in repositioning the petroleum industry and the economy at large.

He explained that the bill had the potential of creating the needed environment to attract investment and build indigenous capacity that would add value to the industry.

Members of the House, according to the Speaker, have demonstrated maturity in dealing with the issue, stating that there were no opposing views during the first and second readings, and a technical committee driven by him was considering some other key areas that might require further consideration.

“Nigeria has no business importing petroleum products,” he said, adding that his members would continually support policies that would ensure the growth and development of the nation’s oil and gas sector.

David Mark, president of the Senate, in a similar vein reassured that the bill would be passed into law soon, saying the Senate would have tidied up the bill, but during the last public hearing, some stakeholders raised eyebrow that their views were not reflected.

“We slated to have another hearing but the date fell on the Muslim festival and we had to shift it, so now we will pick a new date so that everyone will have the opportunity to contribute,” he said, adding, however, that people should not expect a quick turnaround of things as passing the bill was one aspect of the expected reform, while implementation was another area of concern.

Mark explained that the bill had proposed transformation or emergence of some regulatory agencies, saying that would begin to happen with the passage.

 

Information from Business Day was used in this report.

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