By Bassey Udo
The new Petroleum Industry Act (PIA} will create pathways to new investments to enhance Nigeria’s energy industry growth and sustainability, Minister of State for Petroleum Resources, Timipre Sylva has said.
Speaking on Wednesday at a ministerial roundtable at the World Petroleum Congress (WPC) in Houston, Texas, Sylva said the passage of the law after almost two decades since the review process began has created renewed interests in the Nigerian oil and gas business environment.
For several years, the inability to review and update many of the outdated operarional and fiscal laws in the industry was a major disincentive to prospective investors who opted to look elsewhere with more attractive environment for business.
But speaking on the changing environment since the PIA was passed, Sylva said, “The Petroleum Industry Bill (PIB) has been passed into law (now PIA 2021). This strengthens the legal, regulatory, fiscal and governance framework of the petroleum sector.
“PIA has enhanced the Nigerian petroleum industry’s reputation; provides the pathway to new investments, and consolidates our ability to play a significant role in meeting the world’s growing demand for energy”.
He said ths PIA would also assist in increasing oil and gas production in Nigeria, to provide clean and efficient energy; supply world markets with a broad portfolio of energy options, and support global endeavour to alleviate energy poverty in line with United Nations’ Sustainable Development Goal 7.
The minister explained that the new PIA proposes a fiscal regime that encourages investments in gas infrastructure to monetize existing reserves in the short to medium term as well as provide generous incentives to enable the development, distribution, penetration and utilization of gas.
He cited several examples of the initiatives by the government to demonstrate its commitment to create the environment for the growth of the Nigerian economy through utilization of the country’s gas resources.
Some of the initiatives include the declaration of the “Decade of Gas”, to highlight completed and ongoing projects to harness and support the country’s gas potentials, the construction of the Ajaokuta-Kaduna-Kano (AKK) pipeline, Nigeria/Morocco pipeline, Trans-Saharan pipeline and the Nigerian Gas Transportation Network Code as other enablers and initiatives.
Sylva said that although Nigeria was committed to global net-zero energy transition agenda, the country would “still require fossil fuels, especially natural gas, as its baseload energy source to address energy poverty and power supply.
“We have declared gas as our transition fuel and our pathway to net-zero carbon emission. This presents investments opportunities given the oil and gas reserves which can be commercialised,” he said.
On financing of hydrocarbon projects in Africa, the minister said following huge divestments in oil and gas projects in the continent, it was urgent for African leaders to unite to create an energy bank that would provide the platform to support future investments in the sector.
Consequently, he told the global audience that the Nigerian government would champion the creation of an African Energy bank, adding that already “Discussion have commenced with Afreximbank to create an Energy Bank, to finance fossil fuel projects. This is necessitated by the international financial ecosystem’s stance on funding fossil projects”.