Five years after the enactment of the Petroleum Industry Act (PIA), stakeholders in Nigeria’s oil and gas industry have called on the Federal Government to close outstanding implementation gaps, warning that unfinished reforms and regulatory uncertainty could undermine investment, production growth and the country’s energy security.
The concerns were raised at the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) Energy and Labour Summit in Abuja, where industry experts reviewed the impact of the PIA since its enactment in 2021 and examined what must be done to translate the reform into increased investment, higher production and stronger domestic energy security.
Speaking on the theme, “The PIA: Assessing Implementation, Industry Impact, Investment Response and the Road Ahead for Nigeria’s Oil and Gas Sector,” oil and gas expert, Solomon Orieji, said one of the Act’s major achievements was its intervention at a critical period when uncertainty surrounding some of Nigeria’s major deepwater assets threatened future investment.
Orieji explained that five major deepwater assets, which account for about 80 per cent of Nigeria’s deepwater production, were developed under commercial agreements signed in 1993 for a 30-year period.
With the agreements approaching expiry by 2023, he said investors faced uncertainty over the legal framework that would govern the continuation of their interests and future capital commitments.
According to him, the PIA, enacted in 2021, helped to resolve the uncertainty and subsequently created a framework for the renewal and renegotiation of the production sharing contracts.
He said the development represented a major investment gain because investors would have been reluctant to commit additional capital to assets whose contractual future was uncertain.
Orieji, however, cautioned against measuring the success of the PIA solely by the regulatory certainty it created.
For Dr Mohammed Malah, the next measure of success must be the extent to which the regulatory framework actually delivers investment and production.
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