A Review of the Nigerian Energy Industry

Nigeria’s PIB not competitive – Shell

19 November 2012, Sweetcrude, LAGOS – THE Royal Dutch Shell says Nigeria’s Petroleum Industry Bill, PIB, awaiting passage into law at the National Assembly, is not competitive and hinted of the need for fresh investment to drive global oil production.

Bernard Bos, vice president, finance, Shell Exploration & Production Africa made the disclosure at the KPMG oil & gas breakfast seminar in Lagos.

“There are many more investments in Oil & Gas sector across the world compared to many years ago. In the US, for instance, government revolution has lured people into exporting gas. Oil and gas production from existing fields is declining and new investments are required.

PIB is an ambitious bill leading to additional complexity, uncertainty and time consuming implementation. Draft PIB raises serious concerns as enablers are insufficient,” he said.

The Shell vice president added: “The proposed PIB Joint Venture terms are not competitive when compared with other oil producing countries. Proposed PIB Production Sharing Contract, PSC, terms are not competitive when compared with the global deepwater regimes.

“Non-fiscal PIB outcomes are highly uncertain for industry. NNPC and industry are not aligned on the impact of proposed PIB.”

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  • The Nigerian leadership is perpetually under the erroneous impression that the rest of the world will standstill and wait on the country to move – sorry, that ain’t happening. We advise the government to appreciate current operating realities – insecurity in the Niger Delta, dearth of infrastructure, inability of local financial muscle and technical know-how to operate the upstream, near total dependence on oil & gas exports for foreign exchange earnings and failure to development other sources over the years, new sources of hydrocarbon across Africa, and the development of Shale oil. These are realities that makes it foolhardy for Nigeria to continue to antagonize existing investors. Nigeria cannot possibly expect to attract investments by coming up with stringent fiscal measures. The government must de-emphasize immediate gains and seek to create enablers that can grow GDP in the medium to long term.

  • Kashhhhh