By Hector Igbikiowubo
LAGOS — The outrage generated by the debate over provisions contained in the Petroleum Industry Bill appears to have created a deep and widening divide in the nation’s oil and gas industry between the Ministry of Petroleum Resources and the multinational oil exploration and production companies.

Vanguard gathered that in response to the perceived insensitive posture of personnel superintending the PIB, major oil multinational companies have suspended further investments.

The Ministry of Petroleum Resources insists that the PIB seeks to reform the oil industry radically by reviewing existing laws; create distinct agencies with clear demarcation of responsibilities; create a commercially viable national oil company and incorporate the existing joint ventures to structurally address long term funding challenges.

However, the multinational oil companies which have made their position known at various fora insist that the PIB, as proposed, will not achieve the laudable objectives set out in the reform agenda.

Specifically, the multinational operators are of the view that the PIB, if passed in its present form, will bring domestic gas production to a halt because most new gas projects will not be economically-viable.

“Absence of further investments in gas projects will impede growth of power and will critically impact GDP multiplier aspirations,” the multinationals noted.

The multinationals have proposed a well-balanced gas fiscal framework focused on making gas projects economically-viable.

The oil companies also pointed out that if passed into law, the PIB will cause the stoppage of new deep water frontier investments, adding that frontier success in a high risk environment has been driven by existing PSC structure.

“The cumulative tax load of the PIB makes all new development unviable, particularly the major projects capable of driving infrastructure development.”
The group called for a fair PIB fiscal regime capable of encouraging investments to match the type of growth and development taking place in Angola.

Investments suspended

Vanguard reliable gathered that as a direct response to ongoing debate, the multinational oil companies have suspended further investments in the country, noting that the current dispensation does not inspire confidence.

“How can we invest under the current dispensation? The Group Managing Director of the NNPC is hardly ever available for any meeting.

It is either he has been summoned to the villa by the president or his is at the national assembly answering questions,” an Executive Director with one of the companies who did not want his name in print said.