The long delay by the National Assembly to pass the Petroleum Industry Bill (PIB) has continued to frustrate investment decisions by private players in the country’s oil and gas industry.
Last week, attempts by some lawmakers to introduce deliberations on the proposed law designed to provide a fresh legal and regulatory framework for the industry suffered a setback, with members bickering on the timing.
Opinions were divided against going ahead to open discussions on the clauses and provisions of the new law, considering the limited time the lawmakers have at hand to complete the process of deliberations and passage of the Bill before the expiration of their legislative term.
No law in place
At the weekend, chairman, Nigerian Independent Marketing Company Plc (NIPCO), Bestman Anekwe, reiterated the need for the lawmakers to do everything within their powers to speed up work on the new law, as most private investors are not willing to go ahead with critical investment decisions without the law in place.
Mr Anekwe told shareholders during the company’s Annual General Meeting (AGM) in Abuja that his management, like most other private investors, would have wanted to expand its investments in the industry to consolidate on the progress made so far in its operations, but was hampered by the absence of the enabling law to guaranteeing a level playing field for all operators.
“We commend the Federal Government for embarking on the reforms in the nation‘s oil and gas industry. But the delay in the passage of the Petroleum Industry Bill (PIB) currently pending before the National Assembly is a huge challenge, particularly to private investors.
“There is no doubt that the reform process would lead to the full deregulation of the petroleum sector, and in no small measure, create a level playing ground for all stakeholders, and subsequently improve returns on investments in the nation‘s hydrocarbon resources,” he said.
Capital flight
In the same vein, Ademola Adeyemi-Bero, chief executive officer of BG Exploration and Production, Nigeria, said recently that the delay in the passage of petroleum industry related bills was hurting the economy.
Speaking at an oil and gas forum in Lagos, he said there is capital flight in the industry as investors cannot continue to tie funds down while they await the decision on the bills.
“They will rather go to alternative countries to invest there and the funds may not be available by the time Nigeria is eventually ready to move the industry forward,” Mr Adeyemi-Bero said.
Mr Anekwe said despite the challenges faced in the 2010 financial year, NIPCO was able to record moderate performance due to uncommon marketing strategies and purposeful management prudence, coupled with the enormous support of the workforce.
The chairman said the company was able to improve on its dividend payment from N422.2 million to N516.088 million, representing a dividend yield of 275 kobo per share, from 250 kobo per share the previous year.
“The plethora of challenges plaguing the sector must be addressed squarely, in the overall interest of all stakeholders,” Mr Anekwe said.