NCDMB Boss Warns Federal Government Against Altering Petroleum Industry Act
The Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Engr. Simbi Kesiye Wabote, has cautioned against making constant alterations to the structures established by the Petroleum Industry Act 2021, as it could erode investor confidence and hinder the progress of new projects in the oil and gas industry.
During a panel discussion at the recently concluded Nigerian Economic Summit in Abuja, Wabote emphasized that the PIA 2021 already includes sufficient provisions to stimulate growth in the energy sector. He advised the Federal Government and key stakeholders to resist the temptation of continuously amending the law.
While acknowledging the need to seek areas of improvement, he cautioned that “it is injurious to the investment climate if we are in a perpetual state of policy modifications or amendment of laws that we are yet to even progress to full implementation.”
According to Wabote, the Nigerian oil and gas sector struggled for nearly two decades to enact the PIA. Throughout that prolonged period, numerous industry stakeholders attributed the absence of the then Petroleum Industry Bill (PIB) as the primary cause of the insufficient investments in the oil and gas industry.
He urged industry participants to finish ongoing projects and leverage the provisions of the PIA to stimulate the required growth in the energy sector.
Regarding strategies to catalyze the industry’s growth, the Executive Secretary suggested making prompt decisions on unresolved matters related to divestments, assignments, and acquisitions, bid rounds, inter-agency cooperation, contract integrity, and various other critical issues.
Furthermore, he advocated for the expeditious conclusion of the Dangote Refinery project and the distribution of its products into the economy.
Expanding on this, he identified the Presidential Power Initiative in collaboration with Siemens and the revitalization of the Port Harcourt and Warri Refineries as crucial catalysts for growth. He emphasized the importance of ensuring the successful completion of these initiatives.
“The construction of the 615km AKK Pipeline is an ignition point for growth, we need to keep at it till completion, otherwise, it remains a pipe dream,” he added.
Speaking further, Wabote emphasized the importance of establishing Local Content practices as a national priority. He highlighted several pressing issues, including the absence of a commercial and fiscal framework to encourage investment in the sector, aging gas infrastructure, security challenges, multiple taxation obstacles, the imposition of VAT on autogas-related equipment and transactions, a lack of public awareness about the advantages of transitioning to gas, and the dollarization of levies and taxes.
The NGA requested the assistance of the Special Adviser on Energy in tackling these issues and put forth several recommendations, such as implementing heightened security measures for pipeline assets to guarantee a reliable gas supply, aligning taxes and levies with government initiatives, and reviewing the provisions of the Petroleum Industry Act (PIA) that affect the ease of conducting business in the sector.
The group also emphasized the importance of concentrating efforts on deepwater and offshore gas development to tap into Nigeria’s extensive gas reserves and ensure a consistent supply of gas for both export and domestic consumption. Additionally, they recommended involving the NGA as a valuable resource group for industry input in shaping policy and regulatory frameworks.
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During the event, Mr. Akachukwu Nwokedi, the President of the NGA, reiterated the substantial benefits that can be obtained through the ongoing dialogue and collaboration between the Association and the government.
“I firmly believe that our Association’s vision for the next two years will pave the way for transformative changes within the gas industry. In the next two years, the NGA will focus on industry advocacy, expanding capacity-building programmes, establishing itself as a premier gas industry resource center, promoting investment opportunities, focus on increasing Nigerian participation in the gas sector, enhancing technical research and development through NGA study groups, and supporting the implementation of the Decade of Gas policy”, said Akachukwu.
