The Guardian Newspapers, has reported that President Buhari, has declined assent, to the much awaited, Petroleum Industrial Governance Bill (PIGB) a 17-year-old oil and gas bill. #PIGB.
Some analysts have even, argued, the PIGB should have been an executive bill, judging by the importance of the Oil and Gas Industry.
The Guardian, reported that, President Buhari hinged his action on the argument that the bill reduces the president’s control of an industry that contributes the largest chunk to the national economy.
“The President said those he contacted among his ministers, especially the attorney general and minister of justice, claimed that presidential powers have *been passed to a technocrat who might undermine the interest of the president.*”
As it stands, there is a noticeable decline of foreign investment into Nigeria’s oil and gas industry.
It is unclear, if the National Assembly, with a 2/3 majority, will be willing and able to veto the President and pass the #PIGB into law like the NDDC Act; given that this is the eve of an election year, with many lawmakers, due to return to the trenches to seek re-election. Also unclear, if the National Assembly will be keen on amending the alleged grey areas identified by the President.
Regulatory uncertainty continues
According to the National Bureau of Statistics, NBS’ Nigerian Capital Importation report for the second quarter of 2018, foreign capital inflow into the oil and gas industry declined by $60.77 million, about N18.6 billion, to $24.85 million, about N7.6 billion in the second quarter of 2018, compared to $85.62 million, about N26.2 billion recorded in the first quarter.
Vanguard News has reported, that Senator Gershom Bassey, was quoted to have said that, NIGERIA is losing not less than $15 billion investments annually as a result of non-passage of the Petroleum Industry Bill, PIB.
The Guardian Newspaper, had earlier on reported, the Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu, as having said that, the Petroleum Industry Governance Bill (PIGB), would ensure accountability and transparency in the oil and gas sector.
Other African countries
Mauritania, Mozambique, South Africa, Angola, Ghana, Tanzania, Eygpt, Equatorial Guinea, even the Republic of Congo (which joined OPEC in June 2018) and the rest are attracting investments in their oil and gas
Regulatory uncertainty is one factor that may have discouraged significant, foreign direct investment in oil and gas in Nigeria. Clear government regulation is what causes businessmen and women to invest in a particular sector.
Boston Consulting Group did a report on Nigeria titled “Unlocking Nigeria’s Potential: The Path to Well-Being”. In this report the BCG identified eight actions that were critical to ensuring maximum impact of governmental reforms geared at attracting investment into key sectors including oil and gas.
They include setting clear priorities, moving quickly, and keeping it simple. Leaders can squander their political capital by taking on too many projects at once. Instead, it makes sense to focus on a few significant problems and show results quickly.
NLNG train 7 project, is making progress, the NLNG train 7 project is worth about $7 Billion Dollars.
While we continue to await the passage of the #PIGB and the PIB as a whole, for those investing in the Oil and Gas Industry, looking for clarity on how to proceed, please find below an earlier post.
Before the PIB…What to Look for in Oil & Gas Contracts
Possibly in anticipation of the PIB there has been a steady shift of the interest of Oil Majors from Nigeria’s shallow waters to deep offshore fields with higher risk and huge returns, Chevron being the latest oil major to indicate an interest in divesting its stakes in two shallow water oil blocks.
Old and new energy lawyers are probably going to have their hands full with the increase in transactional and regulatory compliance briefs that come with the sale and purchase of Oil and Gas assets. This article attempts to give a brief overview of some key issues in Oil and Gas Contracts
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Olufola Wusu is a Commercial/Oil and Gas and I.P. Lawyer with Megathos Law Practice based in Lagos.
Olufola Wusu Esq. © 2018
Olufola Wusu is noted for his “dynamic practice” and “commercial acumen”. He is praised for his “first-rate skills” in assisting client