…Passed into law after over two decades, Nigeria’s petroleum industry act comprises a complete overhaul of the country’s sector
THUR 21 OCT, 2021-theGBJournal- Nigeria has made significant progress to reform its oil and gas industry in 2021, with progressive legislature being passed into law that not only restructures the domestic sector but provides a more attractive investment destination for international players.
Notably, with the passing of the Petroleum Industry Act (PIA), the Nigerian government has positioned the country as Africa’s top energy market. At African Energy Week (AEW) 2021 in Cape Town, the benefits of the PIA will be outlined by Mele Kyari, Group Managing Director of the Nigerian National Petroleum Corporation (NNPC).
The PIA comprises a complete overhaul of the administrative, regulatory and fiscal regime in Nigeria’s energy sector, restructuring key petroleum institutions in order to streamline processes and drive the country’s oil and gas industry expansion. As the country faces challenges of declining oil production from mature fields, coupled with the reduced capital expenditure climate brought about by the COVID-19 pandemic, the PIA aims to enhance the sector’s attractiveness for foreign investment, ensuring a market-driven regulatory environment that will accelerate the country’s industry developments.
Notable regulatory reforms implemented through the PIA include the creation of a new upstream regulator – the Commission – which will replace the Department of Petroleum Resources; the creation of a new Nigerian midstream and downstream petroleum regulatory authority; and the complete overhaul of the NNPC – to be replaced by the NNPC Limited which will operate on a commercial basis without government funding. Accordingly, Nigeria has placed transparency at the centre of its reforms. Additionally, fiscal reforms include the reduction in the taxation and royalty-take of new/converted licenses from the prior regime; and the introduction of a hydrocarbon tax – to replace the existing petroleum profits tax. By incentivising investment, the government is focused on accelerating development across the entire energy sector value chain.
At AEW 2021 in Cape Town, a strong Nigerian delegation led by H.E. Chief Timipre Sylva, Minister of State for Petroleum Resources, and Kyari will lead the discussion on the benefits and opportunities brought about by the PIA. With over 200 trillion cubic feet of natural gas reserves and 36 billion barrels of oil, Nigeria is well positioned to become a global energy player. Now, with a regulatory environment that places an emphasis on stability and transparency, the country is bound to see an influx in foreign capital and international company participation. In Cape Town, Kyari will promote the PIA, emphasizing how Nigeria will serve as a trend for other resource rich nations looking to secure international investment.
“Nigeria has set an incredibly high standard for other African countries. By implementing a complete regulatory, fiscal, and industry overhaul, introducing key institutions and streamlining sectoral regulations, the government has positioned Nigeria as Africa’s most attractive energy sector. the passing of the PIA is exceptional. This piece of legislature will usher in a new wave of investment and international participation in the Nigerian sector, and the government should be commended on this achievement. In Cape Town, we are looking forward to Mele Kyari going into detail on the benefits that the passing of the PIA will bring to the country. Kyari will advise on the NNPC restructuring, directly engage with investors, and promote the significant opportunities brought about by the PIA,” stated NJ Ayuk, Executive Chairman of the African Energy Chamber (AEC).
AEW 2021, in partnership with South Africa’s Department of Mineral Resources and Energy DMRE, is the AEC’s annual conference, exhibition and networking event. AEW 2021 unites African energy stakeholders with investors and international partners to drive industry growth and development and promote Africa as the destination for energy investments.
Twitter-@theGBJournal|Facebook-The Government and Business Journal|email: govandbusinessj@gmail.com
