By Yemie Adeoye
ACCRAâ€”THE controversial Petroleum Industry Bill, PIB, currently being considered by the National Assembly has once again generated criticisms by the International Oil Companies, IOCâ€™s operating in the country with some stating that uncertainties around the bill have frozen further investments in the Nigerian oil and gas sector.
Specifically, the oil companies seem to have come together to take a position on the bill as they confirmed that there would be no further investment in the Nigerian upstream sub-sector until the government allows investors to know the terms and conditions for investing.
This position was emphasized by the Managing Director of Shell Nigeria Exploration and Production Company, SNEPCo, Mr Chike Onyejekwe while delivering a paper titled â€˜Nigeriaâ€™s deep water journey and the challenges aheadâ€™ at the ongoing 2010 Offshore West Africa, OWA, Conference in Accra, Ghana.
According to him, “the bill must find a fair balance to allow the government extracts value during good times and ensure continued investment during tougher times. â€œThe PIB proposes multiple increased royalties and fiscal terms that will slow down new investments in deep water considerably. It will also exclude a number of legitimate costs from being recovered. Uncertainty around these issues are already stalling development of major discovered resources and discouraging companies from undertaking the aggressive exploration programmes they launched under the 1993 provisional Sharing Contracts, PSCâ€™sâ€.
Wants FG to resolve PIB
Corroborating this fact, the Chairman/Managing Director ExxonMobil companies in Nigeria, Mr. Mark Ward stated that the oil companies had aligned themselves to form a formidable position on the PIB, and according to him, the deepwater province in Nigeria is very rich in hydro-carbon and requires lots of works to be done, but that may be very difficult to realize until the issues surrounding the PIB are resolved.
â€œIndustry is aligned in terms of our perspective on the bill, we have some concerns about how the bill might ultimately be finalized, its still very much in process, we support the basic principles and objective as my fellow speaker from Shell pointed out, we are still looking to provide imput to make sure that our voice is heard andÂ considered in the ultimate development of the bill.
“Deepwater is still very immature exploration province and there are lots of works that could be done but I think until the issues associated with the PIB are resolved and its firmly in place and the industry understands exactly what the conditions are going to be for future investments it could be difficult to project.
But offshore Nigeria has a lot of hydro-carbon potentials and we hope that there would be a good balance between what the government wants to achieve and providing a reasonable return for our shareholders”.