ExxonMobil chief warns Nigeria could lose new investments because of new oil law

A bill seeking to overhaul Nigeria’s oil sector would lead to a halt in new investments if passed in its current form due to onerous fiscal terms, the head of ExxonMobil’s Nigeria operations warned Thursday.

Mark Ward, who also leads a grouping of oil majors operating in Africa’s top producer, said industry players shared the view that the current bill jeopardises Nigeria’s bid to boost new investment and output.

New investment in Nigeria’s oil industry has already been limited in recent years due to lingering uncertainty over the bill.

“Quite frankly, the extremely large investments that are needed are seriously at risk under the proposed PIB (Petroleum Industry Bill) terms,” he told a forum on the bill in the economic capital Lagos.

If the bill passes without significant changes, “the government’s aspirations to grow the business and the industry will not be met,” he said.

Oil Minister Diezani Alison-Madueke has described the bill as fair to the government, oil firms and Nigerians, who have long pushed for a fairer shake from an industry that has left the country’s Niger Delta region badly polluted.

Legislation to reform Nigeria’s much criticised oil sector was first introduced in 2008.

President Goodluck Jonathan sent a fresh version of the bill to parliament in July that lays out immense changes to the industry and restructures the state oil firm, widely seen as corruption-riddled.
Ward argued that the new bill could push the government take from oil revenue to above 90 percent of all revenue.

“Nigeria is already one of the most onerous fiscal regimes and now the government wants to make it tougher?…That is something we don’t understand,” Ward said.

Any hopes of expanding lucrative offshore production would be quashed if the bill passes unchanged, Ward said.

“For deepwater: we’re done. There are no investments that can be supported under the current terms of the PIB,” Ward said.

Nigeria’s house recently ended a recess and lawmakers have said the bill is among the first items to be debated in the new session.

Other concerns raised over the bill include powers granted to the president and the oil minister and what activists describe as insufficient measures to improve transparency.

Meanwhile, from the Nigerian perspective, Governor Rotimi Amaechi of the oil-rich Rivers state has applauded the PIB, urging law makers to speedily pass it.

In his view, PIB will promote investment and employment opportunities in the country.

Addressing members of the House of Representatives Committee on Air Force who paid him a courtesy visit on at Government House, Port Harcourt, Amaechi said the PIB would contribute to curbing the security challenges in the country.

He explained that apart from the state and federal government having a duty to fund security, passage of the PIB would pave way for investors to invest and create employment opportunities that would address the security challenges, poverty and unemployment facing the nation.

“The Petroleum Industry Bill (PIB) is a law for the overall benefit of all Nigerians to allow investors to come into the country and invest. This is so because, if we don’t enact a law that would attract investors, then we can’t make progress; right now investors are heading towards Angola, we must seek ways of attracting investors,” Amaechi said.

He urged the federal government to make the Nigerian National Petroleum Corporation (NNPC) a regulatory agency and give wider opportunities to the private sector to participate in investment to create more employment opportunities and tackle poverty in the country.

“As Governor, I don’t know the quantity of oil NNPC produces per day, this is why government should be a regulatory agency and allow investors to come in, and I think it will go a long way to address the needed peace in the country.”

 

 
Source: PM News