President Muhammadu Buhari may not assent to the Petroleum Industry Governance Bill (PIGB) until next year’s general elections amid political infighting between the Presidency and National Assembly.
This has also been alluded to by a United States of America Energy Report, which warns that Nigeria needs investment to keep production from falling.
The US-based Rystad Energy says in a new report the Federal Government should enhance investment in exploration and development of existing oil fields in the upstream sector so as to prevent a decline in crude oil production output.
A highly placed oil and gas industry source told BusinessDay that the reasons for not signing the bill into law by the Presidency were actually not true, but that the President failed to assent to the bill because he wanted to get at the lawmakers whom the Presidency had tagged unfriendly to its course.
The lawmakers have been at the vanguard of the need to kick-start the much-needed reforms in the oil and gas industry, and because of this had been very active trying to put in place laws that would enhance this.
Senior special assistant to the President on National Assembly Matters (Senate), Ita Enang, had identified the provision of the Petroleum Industry Governance Bill permitting the Petroleum Regulatory Commission to retain as much as 10 percent of the revenue generated as one of the reasons President Buhari declined assent to the bill.
He said the President’s position was that the provision unduly increased the funds accruing to the commission to the detriment of the revenue available to the federal, states, Federal Capital Territory and local governments in the country.
It would be recalled that Nigeria had set a production target of 4 million barrels per day (mbpd) and 4mbpd by 2010 before the target deadline was adjusted upward to 2020 as a result of the non-passage of the Petroleum Industry Bill (PIB) launched in 2007.
The version of the PIB passed by the seventh session of the National Assembly was not signed into law by the immediate past President Goodluck Jonathan.
The report, however, stated that President Muhammadu Buhari refused to sign the Petroleum Industry Governance Bill (PIGB) passed by the eighth session of the National Assembly following the removal of the discretionary power of the President in allocating crude oil blocs.
According to Rystad Energy, crude oil production in Nigeria will embark on downward side once there is no investment to ensure that oil being produced is replaced immediately, with new projects offsetting the decline from mature fields. The report assures that Nigeria’s oil production is expected to remain stable in the short to medium term.
“The timely development of these resources is seen as key for maintaining the country’s oil supply,” Rystad Energy says in a new report.
The report discloses that Nigeria used to produce over 2mbpd but instability has dropped that figure to about 1.7mbpd. It assures that production could return to about 2mbpd in the medium-term but the timely development of new discoveries will be needed to keep production.
The source said while it was true that the President had declined assent to the bill, the reasons being adduced in the media for the decision were not true.
The source said there were no compelling reasons for the President not to have signed that bill into law given the importance of the bill to the intended oil and gas reforms.
“The industry requires serious reforms that would boost production in the oil and gas, but as it is now it does appear the President may not sign the bill into law before March next year,” the report states.
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