Lack of PIB scares investors — PETAN chairman

By Michael Eboh

Foreign investment inflow into the Nigeria petroleum industry between January and September 2018, declined sharply by 61.6 per cent to $118.2 million, compared to $307.54 million recorded in the same period in 2017.

Data obtained from the National Bureau of Statistics Third Quarter 2018 Nigerian Capital Importation report, revealed that foreign capital inflow into the oil and gas industry in the nine-month period of 2018 accounted for 0.8 per cent of total foreign investments into the Nigerian economy in the period under review.

This, the report noted was in comparison to the fact that the investment inflow into the petroleum industry accounted for 4.5 per cent of total capital importation in the country in the first nine months of 2017.

oil rig

Giving a breakdown of capital imported into the petroleum industry in first three quarters of 2018, the NBS report disclosed that in the first quarter of 2018, $85.62 million was imported into the oil and gas industry, dropping by 15.3 per cent from $101.08 million.

https://newlive.vanguardngr.com/2018/12/environmental-standards-regulation-in-nigerias-oil-industry-still-weak-report/

In addition, the value of capital imported into the petroleum industry in the second quarter of 2018 declined by 86.9 per cent from N$190.39 million in the second quarter of 2017 to $24.85 million in 2018; while capital imported into the industry in the third quarter of 2018, which stood at $7.73 million was 51.9 per cent lower than $16.07 million recorded in third quarter 2017.

Commenting on the development, Chairman of the Petroleum Technology Association of Nigeria, PETAN, Mr. Bank-Anthony Okoroafor, blamed the declining foreign investment inflow on a number of factors, especially on the uncertainty in the oil and gas fiscals because of the fact that the Petroleum Industry Bill, PIB, was not yet in place.

In an interview with Vanguard, Okoroafor noted that potential investors in the petroleum industry want to be sure of the fiscals that would be in place, something they cannot determine with the absence of the PIB.

He further disclosed that the international oil companies, IOC, want their leases that are due to expire to be renewed before making new investments, another factor, according to him, that is responsible for the decline in foreign investments.

To increase Foreign Direct Investments, FDI, in the oil and gas industry, Okoroafor said it was crucial for the passage of the complete PIB and subsequent assent of the bill by the president, noting that this would help remove the uncertainty in the fiscals.

Other means to attract FDI, according to him, include that the oil and gas fiscal regime must be investor-friendly; government and stakeholders must have respect for law and order; while the government must maintain sanctity of contracts, avoid policy summersaults and renew leases.

He further advised the government to unlock all deepwater projects by having attractive fiscals and terms for win-win for the country and IOCs.

However, Vice President Yemi Osinbajo, in a recent visit to Germany, stated that Nigeria was a leading investment destination for potential and serious investors, adding that the business opportunities are abundant and increasing.

According to him, given the economic and trading developments in other parts of the world, Nigeria has become an investment destination of choice.