President Muhammadu Buhari on Wednesday said that Nigeria lost a whopping sum of $50bn worth of oil and gas industry investments in ten years as a result of stagnation in the industry occasioned by uncertainties created by the failure to pass the Petroleum Industry Bill (PIB).
He said this during his remarks at a ceremony on the passage of the Petroleum Industry Act (PIA) 2021, which preceded the Federal Executive Council (FEC) meeting at the State House, Abuja.
Based on the current official N410.11 per dollar exchange rate of the Central Bank of Nigeria, the $50bn translates into about N20.5trn.
Buhari had signed the Petroleum Industry Bill into law on Monday which seeks to reform, promote transparency and attract capital flows into the oil and gas sector
The bill comprises five major parts, including Governance and Institutions; Administration; Host Communities Development; Petroleum Industry Framework; and Miscellaneous Provisions comprising 319 clauses and eight schedules.
One of the key recommendations of the bill is the unbundling of the NNPC and a revision of the funding mechanism.
Two days after signing the bill into law, the President also set up a steering committee headed by the Honourable Minister of State, Petroleum Resources, Timipre Sylva, to begin the implementation of the Petroleum Industry Act.
Other members are Permanent Secretary, Ministry of Petroleum Resources; Group Managing Director, NNPC; Executive Chairman, FIRS; Representative of the Ministry of Justice; Representative of the Ministry of Finance, Budget and National Planning; Senior Special Assistant to the President on Natural Resources, Barrister Olufemi Lijadu as External Legal Adviser.
The Executive Secretary, Petroleum Technology Development Fund, will serve as Head of the Coordinating Secretariat and the Implementation Working Group.
The primary responsibility of the steering committee is to guide the effective and timely implementation of the PIA in the course of transition to the petroleum industry envisaged in the reform program.
It will also ensure that the new institutions created have the full capability to deliver on their mandate under the new legislation.
The committee has 12 months duration for the assignment, and periodic updates will be given to the President.
According to a statement by his Special Adviser on Media and Publicity, Femi Adesina, the President said the stagnation affected growth of the economy, citing lack of political will on the part of past administrations to actualize the needed transformation.
Buhari said assent of the Petroleum Industry Bill on August 16, 2021, marks the end of decades of uncertainty and under-investment in the petroleum industry.
He said, “We are all aware that past Administrations have identified the need to further align the industry for global competitiveness, but there was lack of political will to actualize this needed transformation.
“This lack of progress has stagnated the growth of the industry and the prosperity of our economy. In the past ten years, Nigeria has lost an estimated $50bn worth of investments due to uncertainty created by the non-passage of the PIB.
“This administration believes that the timely passage of the Petroleum Industry Bill will help our country attract investments across the oil and gas value chain.
“In view of the value our Nation and investors will derive from a stable fiscal framework for the oil and gas industry, our Administration has found it necessary to work with the two Chambers of the National Assembly to ensure the passage of the PIB.”
Buhari noted that signing of the bill was part of the administration’s commitment to building a competitive and resilient petroleum industry that will attract investment, improve our revenue base, create jobs and support our economic diversification agenda.
The President said as a nation that depends on oil resources for the development of other sectors, Nigeria runs a Petroleum Industry that is governed largely by laws enacted over 50 years ago such as the principal legislation; the Petroleum Act of 1969 and other obsolete legislations.’