By Bassey Udo
The Petroleum Industry Act (PIA) enacted by President Muhammadu Buhari last August after almost two decades of waiting holds the key to new investments to realise the global energy transition agenda, Minister of State for Petroleum Resources, Timipre Sylva, has said.
Sylva was speaking on Wednesday at the Nigeria International Economic Partnership Forum in New York.
The forum was organised as part of the 77th Session of the United Nations General Assembly (UNGA) focused on the theme: “Nigeria’s Oil and Gas Sector: Reforms, Results and the Road Ahead.”
Sylva who said the desire of the Buhari government was to inject life into the oil and gas sector previously characterized by fiscal and operational challenges, informed the decision to prioritise on proactive reforms in the oil and gas sector.
Describing the enactment of the PIA as a watershed for the country, the Minister said the industry and all stakeholders are agreed it signaled the beginning of a more conducive environment for investment, output, industrial and national growth..
He said the PIA would address legitimate grievances of resource host-communities most impacted by resource extraction operations of the oil and gas companies.
The PIA 2021, Sylva said, at full implementation, would create massive investment opportunities, improve transparency, attract investors, and reposition the Nigerian Oil and Gas industry for sustainable growth.”
Urging investors to capitalize on the sustainable incentives provided by the PIA 2021 to invest in the oil and gas industry in Nigeria, the minister told participants at the forum that the PIA has established a legal, governance, regulatory, and fiscal framework for the petroleum industry, host community development, and associated matters.
“The PIA provides fiscal certainty, improves regulations and incentives for investment, including up to ten-year tax vacations, while guaranteeing better take for both government and private investors, thereby balancing rewards with risk,” Sylva explained.
The PIA, 2021 he said, has set the foundation for a sustainable growth in the sector with the establishment of the Nigerian National Petroleum Company Limited (NNPCL), Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to reassure the international investors of government’s commitment to the development of the sector.
“The Buhari administration remains committed to the full implementation of these carefully conceived reforms to foster efficiency and attract investments and development of supporting infrastructure along the oil and gas value chain as embedded in our policy aspirations for the sector.
“The government has taken the necessary steps to sustainably implement and operationalize the PIA 2021 within the timelines stipulated in the Act. To this end, the government has inaugurated the steering committee, I chair, which is responsible for PIA implementation immediately after it was signed into law,” he stated.
The commitment of the Nigerian government to tackle the challenges in the oil and gas sector, and he said, was a clear move to reform the industry in order to build a robust, thriving and resilient economic backbone for domestic growth, expansion and consolidation in the era of the global energy transition, and also in a post covid world.
On the theme of the conference Sylva said it resonated with the aspirations and commitment of President Buhari’s government to reform the sector in order to drive industrial diversification, economic growth and sustainable development in Nigeria
He said the country is already reaping positive results from
the enactment of PIA 2021, as existing and potential investors now have certainty on the regulatory regime to carry on their businesses.
The existence of the PIA, he said, has helped clear one the major hurdles that affected the
approval of new projects in the sector.
Apart from the commercialization of Nigerian National Petroleum8
Corporation, he said two clear-cut regulatory bodies for the upstream and downstream sectors were established to regulate their operations.
They are the Nigerian Upstream
Petroleum Regulatory Commission (NUPRC) and the Nigerian Midstream and Downstream Petroleum Regulatory
Authority (NMDPRA), to regulate their technical and commercial operations, is a clear departure from past.
Also, the creation of the Host Community Development Trust
Fund (HCDTF), the Minister said, now provides direct social and economic benefits to host communities, enhancing peaceful and harmonious coexistence between licensees or lessees and host communities.
He said the government has identified, natural gas as the country’s transition fuel, and a viable and sustainable pathway to a clean energy transition.
Gas, Sylva said, provides the energy needed for the country’s growing population in
terms of power generation, transport, feedstock for
industries and clean cooking solutions.
With over 200 Trillion cubic feet (TCF) of proven gas reserve, and a potential upside of up to 600 TCF, the Minister said natural gas will be a major component of the country’s energy mix for the
The declaration of year 2020 as “The Year of Gas”, he said, was a bold statement to demonstrate
President Muhammadu Buhari administration’s resolve to
make gas development and utilization a national priority.
Following the successes recorded in the ‘year of gas’, the Minister said 2021–2030 has also been declared as the “Decade of Gas”
development for Nigeria, to provide the fulcrum for domestic gas industrialization and focusing effort and resources required at making gas the centrepiece of our economy.