|Oil Production Crunch Looms over PIB Logjam, Thursday, 12 Apr 2012|
(THISDAY) Lack of fresh investments owing to the non-passage of the Petroleum Industry Bill (PIB) could result in nearly 25 per cent drop in Nigeria's oil production in the next two years, THISDAY investigation has revealed.It is also feared that the country may face a production crunch by the next decade as cuts in oil and gas sector investments are set to crimp the country's output. Nigeria had set a production target of four million barrels per day (mbpd) and reserve base of 40 billion by 2010.However, these targets could not be met mainly because of the years of unrest in the Niger Delta region, which reduced Nigeria's then production of 2.5mbpd by more than half.
However, Federal Government's post amnesty programme for militants in the region has helped push up the country's oil production to a new high of 2.4mbpd.A highly placed source at the Petroleum Ministry told THISDAY Wednesday that the lingering PIB impasse was crippling activities in the sector. A production crunch looms in view of the tension in the country due to activities of the Boko Haram sect, and the long delay in the passage of the oil reforms bill, the official said.The task force set up in January by the Petroleum Minister, Mrs. Diezani Alison-Madueke, to fast track the passage of the controversial bill, is yet to finalise its work. It is two months behind schedule.The lack of enabling law and environment are pushing up costs of oil and gas jobs and have forced oil majors to cut investment in Nigeria, THISDAY learnt.There are now fears that despite the efforts of Alison-Madueke, the bill may not be passed by the seventh assembly this year.
Most oil and gas deals signed with potential investors about five years ago, some of which had been slated to come on stream between last year and this year, are yet to take off owing to the PIB delay, sources said. The Federal Government had shelved plans to conduct bid rounds in 2009 and 2010 due to long delay in the passage of the PIB. Also, the delay in the signing of Final Investment Decisions on various oil and gas projects had been blamed on the non-passage of the bill. Former Chairman, Senate Committee Upstream, Senator Lee Maeba, disclosed at a recent energy forum in Lagos that the continued delay in the PIB passage portended grave consequences for Nigeria and the economy, as already the industry had lost in excess of $28 billion in investments as at 2010. Most of these investments have found their way into neighbouring countries including Angola, Ghana and Burkina Faso, which have more stable policies, he said.
Following the controversies that dogged an earlier bill, which had been with the National Assembly since 2008, Alison-Madueke, in January, inaugurated an eight-member task force to fast track the passage of the bill. The committee was given the mandate to review the various versions of the bill submitted to the parliament and produce a new one within the next 30 days. "As a matter of fact, you are all also aware that at the end of the 6th Assembly (parliament), there was more than one version going around. So, government expects that the committee will put up all the indices in place to redefine the bill, look at certain sections and include strategic aspects so that we can get it right," the minister said. The DPR Director, Mr. Osten Olorunsola, who is also Chairman of the Technical Sub-Committee on the PIB, said recently that harmonisation of the various versions of the bill was at advanced stage. A source at the Nigerian National Petroleum Corporation (NNPC) told THISDAY Wednesday that the committee would this week brief the press on the progress so far.
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