…One billion barrels yearly additional oil not achievable
…Reserves stagnate at over 37bn barrels
By Udeme Akpan & Levinus Nwabughiogu
THE Federal Government’s moves to add one million barrels yearly to Nigeria’s oil reserves, targeted at increasing the nation’s total reserves from about 37 billion to 40 billion barrels by 2025, have been threatened mainly because of lack of Petroleum Industry Bill, PIB.
The plan was earlier set for realisation by 2020, but shifted forward because of the inability to complete work on the PIB, a comprehensive legislation targeted at overhauling the petroleum industry, entrenching efficiency and transparency and bringing operations in line with international standards.
However, investigation by Vanguard indicated that the new target is also under threat, as operators, including International Oil Companies, IOCs, and their indigenous counterparts have not started to do much toward bringing planned projects to fruition.
In an interview with Vanguard, managing director of a major company, who preferred not to be named, said: “The PIB should have been completed before now to attract investments. I know of companies that have gone to invest heavily in Angola, Ghana and even in East African nations. Nevertheless, we have decided to wait because the Minister of State for Petroleum Resources, Chief Timipre Sylva, had given us assurances.
“We do base our operations on such assurances; but will wait for the PIB before deciding on the next steps for our proposed oil and gas projects in Nigeria. It should be noted that oil and gas require long-term investments, ranging from medium to long term planning and collaboration with many people and organisations, including consultants, technical partners and financiers. We need to tap into new opportunities in Nigeria and the PIB, would be one of the main determinants.
“We intend to wait, even if it takes a much longer time to complete work on the PIB. But it should be stressed that this would also prolong the time required for oil companies to decide on new projects to push forward, mobilise funds, and take Final Investment Decisions, FID, before moving ahead to implement them in order to add to the nation’s reserves.”
Investigation by Vanguard showed that the National Assembly, whose members are currently on vacation, has not started work on the PIB.
Minister of State for Petroleum Resources, Chief Timipre Sylva, could not be reached for comments, over the weekend, but in his new year message, Sylva had said: “The Petroleum Industry Bill (PIB) is now at an advanced stage and the bill would be passed by the middle of this year.”
There are strong indications that the Executive and Legislature have not started to work toward the PIB. In an interview with Vanguard, Mr Ossai Nicholas Ossai, Chairman, House of Representatives Committee on Treaties and member representing Ndokwa/Ukwuani Federal Constituency of Delta State said it would be passed in the first quarter, January – March, 2020.
He said: “I don’t know whether the committee has been constituted already because you know it an adhoc committee that does that, including some members of the Petroleum Upstream Committee. The speaker has already said it is first agenda on the line as soon as the House resumes from vacation.
“I think the Speaker and the Senate President made it clear that it is one of the priority bills that will pass first or second quarter of this year. I think we are on the same page with the Executive arm on the bill. It has dragged because the president believes that his powers had been whittled down. The president is righting to retain his powers.”
On the powers of each party, he said: “Well, the most important thing is that there would be a synergy, give and take, which what the politics is all about. The legislature is making sure that there will be complete transparency where the Executive cannot inhibit the process of governance. I think that is what the legislature wants but the Executive wants to retain their power. It is a fight of the executive against the people.”
In another telephone interview with Vanguard, over the weekend, Sen. Godiya Akwashiki, Chairman, Senate Committee on Media and Public Affairs, said: “I do not know why Nigerians are speculating on when the PIB will be passed or not, especially when it has not yet been presented to the current Senate.
“They should wait for the PIB to be presented to the current Senate and we take it from there. The fact is that if any bill was presented and discussed by the 8th National Assembly, but not completed or accented to by the President, it has to be presented again.
“This means that PIB will have to go through the normal process of first reading, second reading, committee review, public hearing among others. This explains why we should not start to put time frame to it; the most important thing is that the current National Assembly is committed to it.”
From former Presidents Musa Yar’Adua to Olusegun Obasanjo and Goodluck Jonathan – led administrations, many government officials, including ministers and former group managing directors of NNPC, had made similar promises and failed to deliver the new legislation to Nigerians.
Experts said the implication is that Nigeria’s petroleum industry may remain unchanged in the next few years.
In the past few months, OPEC’s records showed that Nigeria’s rig count have hovered at between 15 and 17, indicating that exploration and production remain low in the country, in relation to other countries.
In the midstream and downstream, things are not better, as the poor state of the refineries have compelled NNPC, to embark on massive importation to meet domestic demand.
In his agenda-setting email to Vanguard, chairman, Petroleum Technology Association of Nigeria, PETAN, Mazi Bank-Anthony Okoroafor, stated: “The new Minister of State should work with the National Assembly, the chief of staff and critical stakeholders to complete work on the PIB.