By Bassey Udo
With the recent passage into law of the Petroleum Industry Act (PIA), Nigeria and its joint venture partners in the oil and gas industry have no more excuses not to attract new investments to grow their oil production capacities and exports to earn more economic value, President Muhammadu Buhari has said.
The President who spoke in Abuja on Monday at the opening of the 5th Nigeria International Energy Summit (NIES) said the new industry law has now taken care of all the issues that inhibited efforts to attract new investments into the country’s oil and gas sector in the past.
The President who was represented by the Minister of State for Petroleum Resources, Timipre Sylva, said with the PIA there was now a level of certainty for the regulatory, administrative and fiscal framework to address the legitimate concerns of the indusrry and the grievances of the host communities most impacted by activities of the industry.
He said the PIA was one of three record-breaking achievements of his administration that made 2021 such a significant year.
The other achievements, he said, were the successful conclusion of the marginal oil field bidding round, and the declaration of the “Decade of Gas” initiative which holds a promise of a prosperous Nigeria for Nigerians.
At a time the world was moving away from fossil fuels as a source of energy supply, the President said the award of operaring licenses under the marginal oil bid round would give Nigeria the opportunity to speed up the fossil fuel exploitation, while using the resources for the betterment of the lifes of Nigerians.
Also, with crude oil prices rising again after crashing to negative in April 2020 in the wake of the COVID-19 pandemic, the President said this was another opportunity for the country to take full advantage of and raise its output and export capabilities.
“With the Petroleum Industry Act (PIA) in place, there should be no excuses. The enabling investment environment which has been the bane of the industry has been taken care of by provisions in the PIA. There is now a level of certainty for the regulatory, administrative and fiscal framework and the legitimate grievances of host communities most impacted by activities of the industry has been addressed by the Act,” he said.
To demonstrate his administration’s commitment to help the industry achieve its set objectives, Buhari said no time was wasted in the implementation of the PIA, by
quickly scrapping the existing regulatory agencies and replacing them with new ones.
Besides, he said the Nigerian National Petroleum Company Limited (NNPCL) was incorporated into a limited liability company under the Companies and Allied Matters Act (CAMA) with a prime target for it to become the biggest, most capitalized and most profitable company in Africa.
On the “Decade of Gas” initiative, the President said the objective of the government was to transform the country into a gas-based industrialised nation through enhanced and accelerated gas
revolution,by harnessing the country’s rich gas resources for the benefit of the people.
“We will ensure further optimal exploitation and utilization of the country’s vast natural gas resources. Given the country’s potential of about 600 trillion cubic feet, natural gas has the enormous potential to diversify and grow Nigeria’s economy,” he said.
On why the administration adopted natural gas as the transition fuel, he said the country was prepared to face the challenge of the
rising global demand for cleaner energy sources, urging the summit to develop smart home-grown goals
for the country’s energy transition.
In his remarks at the occasion, the Minister of State for Petroleum Resources, Sylva said the PIA has indeed given the industry more clarity and certainty required to attract huge investment needed to reposition the sector.
Sylva said the declaration of the Decade of Gas initiative provided the country the vital linkage with the energy transition agenda the global industry is currently pursuing.
He said the theme of this year’s Summit is (NIES), “Revitalizing the Industry: Future Fuels and Energy transition” was apt, as climate change has also brought the discuss on energy transition to the front burner.
The African continent, he noted, was bedeviled with energy poverty, which is a critical enabler to achieving the 17 United Nations Sustainable Development Goals (SDGs) towards a more prosperous, equitable and sustainable future enabled by a just and inclusive transition to clean and modern energy.
In adopting global future fuels, Sylva said the link between energy-poverty and climate change must be established, towards clean and sustainable sources.
For countries rich in natural resources, but still energy poor, such as Nigeria, he said the energy transition must not come at the expense of affordable and reliable energy sources for people, cities, and industry.
“The transition must be inclusive, equitable, and just—which means preserving the right to sustainable development and poverty eradication as enshrined in global treaties such as the Paris Accord. It is evident that what makes the most sense from the point of view of “balancing energy security with environmental sustainability is the use of gas as a transition fuel,” he said.
To demonstrate the commitment to its Decade of Gas vision, he said the government has now made it an integral part of its Oil and Gas Road map.
To ensure domestic economic growth and development beyond 2030, he said over 200 trillion standard cubic feet (TSCF) proven reserves of natural gas has been dedicated towards as the country’s dominant primary energy source for use in the medium to long term.
With the Nigeria LNG Limited as a parrner, the minister said the Ministry of Petroleum Resources has launched the National Gas Expansion Programme (NGEP) to expand Nigeria’s Domestic utilization as part of the National Gas Policy; the National Gas Flare Commercialization Programme as well as specific provisions in the new PIA, which has elevated LPG as the fuel of choice compared to other competing fuels.
Under the programme, said the government has established a 20 million Cylinder Injection Scheme, out of which 5-10 million are to be introduced in pilot states this year.
Also, he announced the establishment of $50 million LPG Energy Fund, in partnership with AFREXIMBANK, to facilitate investments in the development of gas infrastructure in the domestic market.
In a goodwill message to the Summit via Zoom, the Secretary General, Organization of Petroleum Exporting Countries, (OPEC), Mohammad Barkindo, said expressed the hope that the implementation od the PIA would bring about the necessary reforms designed to strengthen institutions, solidify regulatory and fiscal frameworks and attract much needed investments in a sustainable manner.
Barkindo thanked President Buhari for his steadfast support for Nigeria’s Energy Industry, and praised Sylva for his leadership roles and active participation in OPEC which has helped forge a sustainable stability in the global oil market.
The Group Managing Director of the NNPC Limited, Mele Kyari said in as much as Nigeria was in full support of the global energy transition agenda, it would not be equitable ans just to expect the country, and indeed Africa, to pursue the agenda at the expense of the effort to harness and give value to its abundant oil and gas resources for the benefit of its people.
Kyari said the implementation of the PIA was a firm demonstration of the commitment by the government to grow its industry capacity to enhance its sustained growth.