To make Nigeria an investment destination of choice in the oil and gas industry, the Lagos Chamber of Commerce and Industry (LCCI) has urged the National Assembly to ensure the pending Petroleum Industry Bill (PIB) when passed would be competitive.
The Director-General of LCCI, Muda Yusuf, said in a statement on Sunday in Lagos that the Chamber was fully in support of the Federal Government’s efforts to drive industry reforms through a new PIB currently before the National Assembly.
Mr Yusuf said the desire of the Lagos Chamber was for a PIB that will promote more effective and efficient governance, administration, host community development and fiscal framework for the petroleum industry.
He said a competitive PIB will help preserve the integrity of the existing projects in the oil and gas industry, while encouraging future growth of oil and gas production, and making Nigeria an investment destination of choice.
Apart from having the largest oil and gas reserves in Africa, he said Nigeria also has huge untapped potentials in oil and gas resources capable of helping the country achieve its economic development goals, including gas-to-power projects.
He listed them to include preservation of base business and rights and granting of new Deepwater oil projects a full royalty relief during the first five years of production.
The LCCI chief also identified the removal of Hydro Carbon Tax, as companies would still be subjected to the Companies Income Tax Act (CITA).
Others, he said, were segregation of Upstream and Midstream deemed assets and harmonization of tax practices, and ensuring capital allowance and allowable deductions which are consistent with existing tax legislation and CITA.
Yusuf said the PIB should also include an exemption for existing export gas supply contracts and obligations, and simplifying the administrative burden of compliance, minimizing ambiguity and the extent of overlapping regulation.
However, despite having the largest oil and gas reserves in Africa, Mr Yusuf said Nigeria received only $3 billion, or 4% of the $75 billion invested in the continent between 2015 and 2019.
The poor returns on investment, he noted, underscores the need to create a competitive environment to attract new investments to the oil and gas sector in the country.
The LCCI DG said the key objectives of the PIB 2020, amongst many others, including reforming the institutional and fiscal frameworks and developing the potentials of the Nigerian gas sector.
He said the PIB was also aimed at creating a framework to support the development of the host communities to foster sustainable prosperity, as well as bring in new investments to grow the country’s production capacity.
Although he noted some improvements in the sector, Mr Yusuf, however, said they appear insufficient to deliver the true value to Nigeria, which the PIB aims to achieve.
“Some of the provisions in the PIB could adversely affect the growth of the industry and the overall economy. We (LCCI) firmly believe that based on constructive co-operation between the Nigerian Government and other stakeholders, host communities and Industry, the objectives of reform can be successfully met,” he said.
The Minister of State for Petroleum Resources, Timipreye Sylva, said recently that the government was encouraged with the pace of deliberations on the PIB by the National Assembly.
Mr Sylva said if the pace is maintained, everything being equal, the country may be given a new petroleum industry law before the end of the first quarter of 2021.MEDIATRACNET