Dr. Mikanti Baru, the Group Managing Director of government-owned Nigerian National Petroleum Corporation (NNPC) said he expected that the Petroleum Industry Bill, PIB, will be fully passed by the last quarter of 2018.
Speaking at the Offshore Technology Conference (OTC) holding in Houston Texas, Baru said he has been assured by the National Assembly that the remaining three parts of the bill will become law this year: “From a policy perspective, there are ongoing reforms in the industry in the mould of the Petroleum Industry Bill.
The PIB as it is today has been split into four parts by the National Assembly as follows - the Petroleum Industry Governance Bill (PIGB), the Host Communities, Fiscal Reforms and the Administration Bill. Whilst the Governance Bill has been passed, the other three are at different levels of review.
“Nonetheless, we have assurances from our National Assembly that by early Q3, 2018 there will be light at the end of the tunnel. Its passage is important to help unlock billions of dollars of investments, which have been held up due to the uncertainty of its passage. Permit me to use this opportunity to commend our legislature for their commitment to delivering on this very important national assignment”.
And if the figures Baru has been touting in Texas are right, the country’s petroleum industry is doing just fine, even with the nearly two decades of delayed reforms.
According to him, NNPC has raised $11.9 billion worth of investments for the sector in recent times, a development he described as demonstration of a good appetite for the sector from investors: “Despite the delay in the passage of the bill [Petroleum Industry bill], there is a renewed confidence in investing in the Nigerian oil and gas industry. Each time we go out to raise finance, the appetite is quite good. We had already signed four financing deals on upstream development in support of our cash call exit.
“We are also closing some financing deals on forward sales of the country’s and Nigerian Petroleum Development Company, NPDC crude oil.
The NNPC GMD also revealed that the Corporation is also undertaking some major projects through contractor financing, citing as example, the Ajaokuta-Abuja-Kaduna-Kano, AKK gas pipeline project: “In total, we have raised $3.6 billion (for projects Chetah, Santolina, Falcon and the Schlumberger/First E&P FSA), we are raising $5.5 billion from crude forward sales and $2.8 billion for AKK projects. Just last week, Shell announced an investment inflow of $15 billion in gas and deep offshore developments. This is a clear demonstration of the confidence investors have in the sector.”
Baru is also delighted by the upward swing in petroleum prices, hoping that the good times will last forever.
“This year’s event is also coming up at a time when we see an upward swing in crude oil prices to the 70s region. I recall that this time last year, we were in the 50s region. Possibly the good times are here again. We hope it stays.”
While the GMD celebrates the ‘good times,’ he would need to remain conscious of the wavelike nature of commodity prices.
As NNPC attracts investments to the exploration and production arm of the industry, the downstream sector remains stagnated due to regulated prices.