PIA will boost investment in the oil and gas industry – Engr. Wabote
The Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Engr. Simbi Wabote has said that the Petroleum Industry Act (PIA) recently passed by President Muhammadu Buhari will boost investment in Nigeria’s oil and gas industry.
Engr. Wabote who said this during the Association of Energy Correspondents of Nigeria (NAEC) 2021 Strategic International Annual Conference held recently in Lagos further opined that the Act will also stimulate the development of crude oil host communities, reduce funding pressure on the government and boost capacity development in identified skills gaps in the country.
The NCDMB boss, who was represented at the conference by the NCDMB’s Director of Monitoring and Evaluation, Mr. Tunde Adelana, also maintained that the PIA will foster the development of critical infrastructure and enhance the utilization of gas resources for national development.
He pointed out that the PIA provides legal governance, regulatory and fiscal framework for the oil and gas industry and development of host communities. According to him, the Act contains 5 Chapters, 319 Sections, and 8 Schedules dealing with Rights of Pre-emption; Incorporated Joint Ventures; Domestic Best Price and Pricing Framework.
He further said that the Act will bring about the formation of NNPC limited, its functions; gas flare and gas infrastructure; midstream operations; fiscals, taxes and royalties and host community development with a target of involving the business of renewable energy. He pointed out that the PIA Petroleum Profits Tax (PPT) replaces the National Hydrocarbon Tax, alongside royalties reduced for onshore areas, shallow water, deep offshore and frontier basins, and natural gas.
Also in the area of oil and gas value chain, Engr. Wabote insisted that the midstream activities lie on the palms of the operators within the sector to ensure national strategic stock, enhance the decommissioning and abandonment fund and eliminate government’s regulation on pricing of petroleum products. Adding that the Act will ensure gas flaring penalties, establishment of midstream gas infrastructure and special regulation for midstream and downstream gas operations, as well as natural gas prices for strategic sectors.
He therefore maintained that the Act will boost local content implementation in the oil and gas industry.
In his presentation, the Managing Director and Chief Executive Officer of Nigeria Liquefied Natural Gas (NLNG) Limited, Dr. Philip Mshelbila, who spoke on ‘Boosting the Nation’s Economy through Gas Utilization,’ emphasized on the energy transition in the light of cleaner, cheaper and sustainable energy.
Dr. Mshelbila, represented at the conference by the NLNG Manager of Corporate Communication and Public Affairs, Mrs. Sophia Horsfall, affirmed that giant technological advancements have been made in the area of renewable energy and battery storage. But argued that renewables alone cannot meet the energy demand in a sustainable manner and therefore, natural gas is the next cheapest option.
“It is the smart option for renewables,” Dr. Mshelbila said.
Earlier in his speech with the theme, “PIA: Energy Transition and the Future of Nigeria’s Oil and Gas,” the Chairman of the Conference and Chief Executive Officer of Degeconeck Nigeria Limited, Mr. Biodun Adesanya, called on the participants to utilize the opportunity and draft the way forward to effectively communicate rather than inform the public on government’s policy on gas revolution and energy transition.
In his welcome address, the Chairman of Nigeria Atomic Energy Commission (NAEC), Mr. Olu Phillips, commended the federal government for its swift response to economic shocks which the dwindling price of oil brought at the critical stage of coronavirus pandemic between the last quarter of 2019 and mid-2020.
Mr. Phillips said that the government’s swift decisions brought about the outcomes which formed the fulcrum of 2021’s international conference.
He noted that from the declaration of the ‘Year of Gas’ in 2020, which was aggressively elevated to a ‘Decade of Gas’ in the first quarter of this year (2021), Nigeria seemed to have found its path to restoration and a possible growth trajectory. A consensus, according to him, emanated from practical decisions amongst stakeholders to offer clean energy solutions in a sustainable manner.