By Gift Chapi Odekina
Major players in the Nigerian petroleum industry have asserted that the country lost over $250 billion investment due to absence of supportive legislation for the oil and gas sector reform.
They spoke at the House of Representatives public hearing on administration, fiscal and host community bills on Tuesday in Abuja.
Members of the OPTS, comprising of 28 indigenous and international operators of 90 per cent of oil and gas sector, however, praised the efforts of the National Assembly on the bill.
But they frowned at the stringent provisions for relinquishment of licensed area as well as retrospective legislation on relinquishment of fees after seven years.
While expressing concerns over the impact of a toxic legislation on existing and prospective investments, the operators stressed the need to ensure that the legislation becomes applicable when the bill is signed into law.
The operators also kicked against punitive legislation on revocation of licence due to delay in submission of data as well as $2/mmbtu on gas flare, rather the recommended $0.5 or its equivalent in naira at the prevailing exchange rate, per 1,000 standard cubic feet of gas flare in the case of routine flaring.
The operators also canvassed for 10 years for operation of acreage before relinquishment of licence and seven years, noting that such provisions did not take current funding challenges into consideration.
According to joint Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) and the National Union of Petroleum and Natural Gas Workers (NUPENG), Nigeria has so far lost some “$250 billion of investments due to its inability to legislate the proposed reforms in its oil and gas industry as follows: $15 billion yearly – in investments withheld or diverted by investors to other countries because of the uncertainty as investors do not know which rules will guide their investments and another $14.7 billion potential earnings in seven years, from 2010-2017 had the PIB been passed into law in 2009.”.
In order to ensure adequate funding of the host community development fund, the unions noted that the 2.5% operating budget was inadequate, while the oil and gas companies raised concerns that the bill imposes additional financial burden on those who are already paying taxes, fees and royalties, three per cent to Niger Delta Development Commission, two per cent education tax and one per cent NCD.