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Monday, June 15, 2015

PIB Threatens $80billion Investment – PENGASSAN

The chairman Petroleum and Natural Gas Senior Staff Association of Nigeria(PENGASSAN) Producers’ Forum, Emmanuel Onourah has cautioned that the proposed fiscal terms under the Petroleum Industry Bill (PIB) would threaten $80billion investment in the oil sector between 2015 and 2020.

The proposed fiscal terms was based on $100 barrel model.

He also said that the development would bring about $44 billion reduction in accruable revenue to the federal government in the sector under the period.


Onourah, who disclosed this in Lagos, said the fiscal terms would affect the sector because no deepwater Production Sharing Contract production will be viable and production of gas under the Joint Venture with the government would reduce by 90 per cent.

He also said production of oil under the Joint Venture with government would reduce by 30 percent while there would be an overall decline of 25 per cent production due to the proposed fiscal regime.

According to him, it is therefore better imagined what the impact of the terms will be in a depressed market economy of $50-$60 per barrel as we are presently experiencing.

Although the government is disputing the results of this modeling as a major stakeholder in the industry, we will align with the recommendation of our parent body, PENGASSAN and demand that the new government should employ the service of an independent third party consultant to run the models and come up with a non-biased assessment’’.

He expressed disappointment over non-passage of the PIB by the 7th National Assembly and urged the new government to re-present the bill to the current Assembly for accelerated passage and assent by the President.

He further suggested that the bill should be broken into manageable segments to allow the needed reforms to commence while the more controversial issues like host community fund, frontier exploration and fiscal terms can be further debated to some points before being passed.

’We also advocated that the gas policy for Production Sharing Contracts and appropriate domestic gas should be addressed because it affects gas supply to independent Power Projects(IPP) which impacts negatively on electricity.’’

He also implored President Muhammadu Buhari to unveil his plans for the nation’s oil and gas industry within the first 100 days of his administration.

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