News Analysis by EMMANUELLA ANOKAN, News Agency of Nigeria (NAN)

The Petroleum Industry Bill (PIB) was first presented to the National Assembly in 2008, during the leadership of President, Umar Yar’Adua, now late.

Energy experts were confident that the bill would turn around the misfortunes of the oil and gas industry in the country.

In spite of the several roadblocks encountered then, the experts knew that it was a matter of time for things to begin to take shape, as European and American companies dominated the nation’s oil exploration.

Shell Petroleum Development Corporation, Chevron, Total Energies and ExxonMobil had being the front liners.

Attempts were made to incorporate companies from China, Saudi Arabia and India into the country’s oil exploration.

However, but the existing Nigerian laws would not allow the leasing of oil wells to prospective companies from abroad since most of the Oil Mining Leases (OMLs) were in firm grip of the existing International Oil Companies (IOCs).

The firms had held the OMLs for many years before the bill was proposed, and to change the situation, an overhaul was needed in the country’s energy law. Interestingly, this development necessitated the introduction of the PIB.

Furthermore, the expectation of the proposed reform in the oil industry was that the sector would be free from government control in a deregulated environment and at the same time unbundle the Nigerian National Petroleum Company Limited (NNPCL).

It was like prayers answered when the former administration of Muhammadu Buhari signed the bill into law in August 2021.

Forty eight hours after signing the legislation into law, Buhari approved a steering committee to oversee its implementation, stressing that Nigeria lost an estimated $50 billion worth of investments in just 10 years.

Buhari was quoted by the media as saying that the loss was created by the uncertainty of non-passage of the PIB.

It was on this premise that Malam Mele Kyari, the Group Chief Executive Officer (GCEO), NNPCL, recently made moves to set new investment benchmark post Petroleum Industry Act (PIA) 2021.

The NNPCL had sealed multiple deals running into over $48.15 billion to rejuvenate the hitherto inept company.

Other key investment project slated for Final Investment Decisions (FID) by the NNPCL, include the $25 billion West African Gas Pipeline project (Nigeria-Morocco gas pipeline).

The company will stake $12.5 billion to secure a 50 per cent equity and the $2.8 billion Ajaokuta-Kaduna-Kano (AKK) gas pipeline project among others.

Also, in its quest to boast it financial base, the Nigerian government in June 2022 renewed talks with Algeria and Niger to kickstart the $13 billion (€12.8 billion) Trans-Saharan Gas Pipeline (TSGP).

No wonder oil and gas experts were full of expectations that with time, things would turn around for good in the sector.

Associate Professor of Energy and Natural Resources, Olanrewaju Aladeitan, told News Agency of Nigeria (NAN) that what NNPCL was doing with the Trans-Sahara Gas Pipeline (TSGP) project was what Nigeria should have done in 1970s, or thereabout.

He said that Nigeria would have been taking advantage of the vacuum created by the non-supply of oil to Europe by Russia and expand its gas projects penetration the European market.

“If we had done that, by now we would be smiling to the bank because we would have utilised the opportunity of market that was left by the withdrawal of Russia.

“So if we can achieve the same aim through the Trans-Sahara pipeline, it will be fine.

“We also have the West African Gas Pipeline, which passes through Benin Republic, Togo to Ghana, and that has also been in the works for some time.

“This is what has informed Nigeria looking at constructing these pipelines to Europe and the gas can flow from there,” he said.

The need for the NNPCL model of investments was also highlighted at the Nigeria International Energy Summit (NIES 2023).

Speaking during business leaders and regulatory dialogue session at the event, Mrs Nkechi Obi, Group Managing Director of Techno Oil Limited, called for significant investments and infrastructure to achieve global energy mix and sustainable energy.

The firm is an indigenous oil and gas company,

“There are about eight mitigants to achieving the global energy mix but the provision of infrastructure, reduction in biomass and fossil fuel were key to achieving success, especially in the downstream sector.

“Nigeria needs an enabling environment to drive investments to position itself strategically in view of global trend to transit to cleaner energy.

“She said the passage of the Petroleum Industry Act (PIA 2021) was a big relief in pursuit of a cleaner energy”, she said.

Obi’s call was not different from what the country is trying to achieve through the investments embarked upon by the NNPCL, as gas is expected play a bigger role in the global energy mix and that Nigeria had enough of it to drive the industry.

Mr Olabode Sowunmi, Senior Legislative Aid to the former Senate President on Gas and Power said the industry particularly the gas sector, offers Nigeria great opportunities for industrialisation.

Sowunmi advocated consistency in the Nigeria Gas Master Plan, especially on projects such as AKK, Trans-Saharan Gas Pipeline and West African Gas Pipeline.

He expressed satisfaction that some reforms have started in the industry in view of the implementation of the PIA 2021.

Besides the multiple investments stakes, the company under the leadership of Kyari, has also taken positive measures aimed at blocking the loopholes in crude oil leakages, theft and vandalism.

Energy experts say the step is expected to propel NNPCL into a global profit-making brand like other major oil giants across the globe.

In pursuit of this role, the company in the last 24 months engaged in exploring new business ventures, investment opportunities.

It has also taken measures that had seen the nation’s dismal crude production of less than a million barrels per day increase to over 1.6 million barrels per day in the last 12 months.

The company successfully signed and acquired a 20 per cent Federal Government stake in the Dangote 650,000-barrel-per-day oil refinery for $2.76 billion.

It also secured over $3 billion local and foreign investment interests in the Kolmani Integrated Development Project.

The Kolmani project houses a 120,000-barrels per day refinery, a 500-million standard cubic feet per day gas processing plant, a 300-megawatt capacity power plant, and a fertiliser plant of 2,500 tons per day.

Earlier in 2023, the NNPC Renewed Oil Production Pact With its Partners For 10 billion barrel aimed at putting an end to the protracted dispute between the state-owned company and the contractor parties in OMLs 128, 130, 132 and 133, as well as 138 PSCs.

The agreements are the Production Sharing Agreement, Dispute Settlement Agreements, Settlement Repayment Agreement, and Escrow Agreement.

The signing of the agreement took place at the NNPC headquarters office in Abuja.

According to the NNPC Limited, the signing of the new PSCs is a key milestone achievement, which will ultimately unlock opportunities within the Nigeria upstream sector.

Only last Thursday, the NNPCL signed a Heads of Terms (HoT) agreement with UTM Offshore Limited for the construction of the nation’s first indigenous floating liquified natural gas (LNG) project with a $5.6 billion funding package from Afreximbank.

Speaking on the UTM deal, Mr Garba Deen Muhammad, Chief Corporate Communications Officer, NNPCL, in a statement said the agreement was a step towards bolstering Nigeria’s energy security and promoting the utilisation of its abundant gas resources.

“In a major step towards bolstering Nigeria’s energy security and promoting the utilisation of its abundant gas resources, the NNPC Ltd and UTM Offshore Limited have today in Abuja signed a Heads of Terms (HoT) agreement.

“It is for the construction of the nation’s first indigenous Floating LNG project,” the company said.

The NNPCL as a company grew its profit after tax from N287 billion in 2020 to N674 billion in 2021.

It would be recalled that for the first time in the history, the company, last Thursday, July 20, 2023, it commenced the payment of interim dividend and Petroleum Sharing Contracts (PSC) profit oil into the Federation Account Allocation Committee (FAAC) with the of N123 billion.

A breakdown of the amount showed that the National Oil Company paid N81 billion as monthly interim dividend and N42 billion as 40 per cent PSC profit oil, this is in addition to compliance on payment of royalties and taxes.

Commenting on the NNPC Limited’s performance, Mr Horatius Egua, spokesman of the immediate past Minister of State for Petroleum Resources, Chief Timipre Sylva, said Sylva’s in ensuring the passage of the PIA was instrumental to the new feats.

According to Egua all that NNPC Limited has achieved today would not have been possible if the Petroleum Industry Bill (PIB) was not passed into law.

“Thumbs up must be given to Chief Sylva, the leadership of the National Assembly and former President Muhammadu Buhari”, he said.

He also praised Kyari for providing the leadership in the NNPCL that had enabled the company attain its present status.

“It is one thing to have a law but if you don’t have competent people to drive and implement that law, it becomes useless.

“So Malam Kyari has done well in his own capacity as the boss of the NNPC Limited.

“However, he needs to do more to take the company to a greater height like the Saudi Aramco, China Petroleum & Chemical Corp., Exxon Mobil Corp., and others,” he said. (NANFeature)

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