While other African oil-producing countries are gearing up to attract investments, regulatory uncertainty in Nigeria’s oil and gas industry has continued to darken the outlook for big projects in the country.
Several planned deepwater projects in the country, with the potential to bring online almost 1.1 million barrels of new production daily over the next five or more years, have been repeatedly pushed back by the International Oil Companies. Since February 2012, when the 125,000-bpd Usan deepwater field started production, no major oil field has come on stream in the country. Total’s $16bn Egina deepwater oilfield project, is however expected to add 200,000 bpd to Nigeria’s oil production.
Analysts at PwC, noted in a new report titled ‘Africa’s oil and gas review’, that the industry was still awaiting the passage of the Petroleum Industry Bill. “The associated uncertainty has likely caused the deferment of Final Investments Decisions for a host of upstream and midstream projects,” they said. The bill, which seeks to change the organisational structure and fiscal terms governing the industry, suffered setbacks in the 6th and 7th National Assembly.
To fast-track its passage into law, the current National Assembly decided to split the bill into four parts – the Petroleum Industry Governance Bill, Petroleum Industry Administration Bill, Petroleum Industry Fiscal Bill and Petroleum Host Community Bill. After its passage by both the Senate and the House of Representatives, the PIGB was transmitted to the President for assent in July to enable it to become law but President Muhammadu Buhari declined to assent to the bill.
Source: The Punch