International Oil Companies (IOCs) operating in Nigeria on Wednesday rallied behind the Petroleum Industry Bill (PIB) passed by the National Assembly last week, describing it as a watershed in the annals of the oil and gas industry in the country.
The oil majors, including Total, Shell, ExxonMobil and Chevron said at the 20th Nigerian Oil and Gas (NOG) Conference and Exhibition in Abuja, that while there had been attempts in the past to push the bill, the latest round of consultations were the most intense.
Managing Director, Shell Petroleum Development Company (SPDC) and Country Chair of Shell Companies in Nigeria, Mr. Osagie Okunbor, who participated in a panel discussion during the programme, stated that the industry was waiting for the bill to be harmonised and speedily assented by President Muhammadu Buhari.
He said the uncertainty that had enveloped the industry would be minimised, urging that the implementation of the law should be taken seriously to grow the industry and ensure more returns to stakeholders.
He said: “For those of us on this side of the table, you could almost not have a decent discussion with your corporate organisation on any investment decision without that uncertainty element coming in. That is to say, under which law are we making these investment decisions?
“Just having this law finally bodes well for the industry and we all need to congratulate those who have played their own part. I have been with this PIB for the greater part of my career. Several times, when you mention it outside, they just laugh and say, ‘we have been through this before.’
“The point to be made is that more than any time in the past, the industry has been consulted. All of us on this side of the table have had cause to go to the National Assembly to make our voices heard.”
He stated that although the document is not perfect, all stakeholders have been carried along during putting the well-articulated bill together, while the industry is now waiting for the end product.
Managing Director of Total Energies, Nigeria, Mr. Mike Sangster, said Nigeria deserved credit for finally passing the legislation, adding that though it took about a decade to pass the bill, the legislation would free the industry from some of the impediments that had inhibited its growth.
He said: “We look forward to the presentation of the final law. It has taken 20 years to get to this stage. Nigeria deserves some credit. The collaborative process has been good. The public hearings and engagements have been useful.”
He stated that with 37 billion barrels of proven oil reserves and an optimistic production of two million barrels per day, it would take roughly 50 years to exhaust the resource, and a lot of investment would be needed before then.
According to him, the bill will be critical to stimulate investment and encouraging increased production but added that other issues like security should be tackled head-on.
“There’s a huge challenge of security in terms of cost. Infrastructure, especially gas, needs to be encouraged. We need to work together to drive down the cost of doing business. Put side by side other countries, I think it’s on the high side. We look forward to seeing the final harmonised bill next week,” he said.
Also, Chairman and Managing Director of Chevron Nigeria, Mr. Richard Kennedy, joined his colleagues in congratulating the National Assembly “for reaching this milestone.”
“And I want to reiterate the high degree of stakeholder involvement and listening to everyone that will be impacted.
“We have spent a lot of time providing insights and input and we look forward to seeing that final version so that we can really dive into it in our transition from putting the bill together to operationalising it. We have a lot of work to do but it is going to be exciting,” he said.
Managing Director of ExxonMobil, Mr. Richard Laing, also said the uncertainty and multiple taxes surrounding the industry would now be addressed with the passage of the PIB.
“This will bring certainty and after that will come the competitiveness in the industry and in my role, I have to go to the company to articulate to get funds in-country. And also, the bill will take care of the plethora of taxes we are faced with,” he said.
Senate Committee Chairman, Upstream, Senator Bassey Akpan, said the bill would be sent to the president for his assent next week, adding that there’s no controversy over the funds allocated to the host communities.
“Between now and Tuesday, the joint committee of the National Assembly of which I am one, will be laying the report at the plenary and should be heading towards the presidential villa before the end of next week.
“We have for once constructively taken a note of the peculiarities of the different operators in the country, whether the IOCs, or other stakeholders in the course of our consultations and I think that we have captured the scenarios and we have proven that we will move the industry and the country forward,” he said.
According to him, the bill, when assented, will ensure transparency in the running of the industry and have a positive impact on the host communities.
He added that the state governments have been carefully excluded from the governance of the host community structure, which is now strictly between the settlor and the hosts.
On the controversy over the three per cent allocation to the communities, he said: “There are speculations as to whether it’s three per cent or five per cent. What was laid before the National Assembly is five per cent of actual operators’ expenses in the preceding year.
“What the Senate proposed was 2.5 per cent of the OPEX in the previous year and after all the consultations, we at the National Assembly believe that for there to be peaceful coexistence and based on reality, a chunk of their cost of production is attributable to insecurity.
“We in the Senate believe that by the increase of the 2.5 per cent to five per cent and placing some elements of responsibility on the protection of the assets on the host communities, we will stop the issues of blockades.”
He added that once the huge sums spent on security by oil companies are put into the fund, in the long run, they will have a peaceful environment to operate.
Chairman of Major Oil Marketers Association of Nigeria (MOMAN), Mr. Tunji Oyebanji, in his remarks, stated that the real fundamental and basic thing to driving energy security and sufficiency in the country was to create the enabling environment for investment.