Austin Olorunsola, lead consultant to the Senate on the Petroleum Industry Bill and former director of the Department of Petroleum Resources (DPR), has said the PIB will create a more efficient and market-driven industry.
Speaking with our correspondent recently, he said as soon as the Nigerian National Petroleum Corporation , (NNPC) begins to operate as a private company as designed in the new Bill, the desired change will be seen in the sector.
Recall that NNPC last week recommended the splitting of petroleum licences into two components for prospecting and production phases under the draft Petroleum Industry Administrative legislation currently before the National Assembly.
In a presentation at the Public Hearing organised by the House of Representatives Committee on the Petroleum Industry Administrative Bill (PIAB), Petroleum Industry Fiscal Bill (PIFB) and the Petroleum Industry Host Community Bill (PIHCB), Maikanti Baru, group managing director of the corporation, said the proposed split would prevent a situation where operators would sit perpetually on oil acreages.
Beyond the clause by clause recommendations, the corporation also advocated for the simplification of the fiscal system for ease of implementation and to ensure progressivity.
Olorunsola speaking further said: “Once you have an NNPC that is very strong on the ground on its own, that is not going cap in hand to ask the government to give them money to invest;
“The cash control over what they make, the oil industry is completely open because what has been causing problem before as Joint Venture partners, the investors bring money while NNPC can’t bring in their own
“But as soon as they start running as a private company as it has been designed, obviously you are going to see a lot more market-driven industry,” he said.
According to him, although the Department of Petroleum Resources, (DPR) is an offshoot of NNPC, the new regulator will be independent of NNPC.
“Don’t forget that they started from NNPC as Petroleum Inspectorate. And it is very difficult to remove that umbilical cord. The new regulator will be completely independent of NNPC,” he said.
“They are going to run just like their colleagues around the world are running, efficiently,” he added.
The expectation from stakeholders is that the bill would be given accelerated consideration and immediate implementation for maximum utilisation of the nation’s hydrocarbon resources.
This is because the Energy Information Administration, the statistical arm of the US Energy Department, in one of its report said: “The amount of money that Nigeria loses every year from not passing the PIB is estimated to be as high as $15 billion.”
GlobalData, a leading data, and analytics company, said in a new report that the delay in the passage of the PIB was threatening an average capital expenditure of $8.4bn per year expected to be spent on 249 oil and gas fields in Nigeria between 2018 and 2020.