By Merit Ibe
The Lagos Chamber of Commerce and Industry (LCCI) has expressed fear that some provisions of the new Petroleum Industry Bill (PIB) could adversely affect growth of the industry and economy.
Emphasising its support for government’s efforts at driving industry reform through a new PIB, the chamber noted that the key objectives of the PIB 2020, among others, which include reforming the institutional and fiscal framework, developing Nigeria’s gas sector further, creating a framework to support the development of host communities, foster sustainable prosperity and bringing in new investments to grow the country’s production capacity were positive steps toward achieving its stated goals.
It also acknowledged that the bill mandates that Ministries, Departments and Agencies (MDAs) consult with the commission prior to introducing overlapping legislation which will impact the oil and gas industry, allows for consultation with industry stakeholders before making regulations and commercialisation of NNPC to improve business efficiency and effectiveness, especially in relation to Joint Venture activities
The chamber, however, noted that some of these improvements appear insufficient to deliver the true value which the bill aims to achieve. Director General of the chamber, Dr Muda Yusuf, who stated this on Sunday, explained that Nigeria, with the largest oil and gas reserves in Africa, has huge untapped potential to achieve its economic development goals including gas-to-power ambitions.
He said despite having the largest reserves in Africa, the country only received four per cent ($3 billion) of $75 billion invested on the continent between 2015 and 2019, which underscores the need to create a competitive environment to attract investment to the oil and gas sector.
The Lagos chamber urged the National Assembly to put in place a law that wouldpromote a more effective and efficient governance, administration, host community development and fiscal framework for the petroleum industry.
“We firmly believe that based on constructive co-operation between the government and other stakeholders, host communities and the industry, the objectives of reform can be successfully met.
“A competitive bill would help preserve the integrity of the existing projects and also encourage future growth of production and make Nigeria an investment destination of choice.”
In the light of the above, the chamber recommended that the PIB should seek to protect existing investments from value erosion, adding that the assets and operations from these investments were the foundation upon which new projects can be built.