Four days after President Muhammadu Buhari signed the Petroluem Industry Bill into law. the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, has said the legislation will transform the nation’s petroleum industry by attracting capital, strengthening cost recovery, and ensure a decent return on investment for the oil and gas sector.
Kyari who spoke as guest of honour at a Fireside chat organized by Persecondnews in Houston, Texas, on Thursday also said the Act will attract huge capital globally into the country’s oil sector.
Buhari who signed the bill into law had on Wednesday said that Nigeria lost a whopping sum of $50bn worth of oil and gas industry investments in ten years as a result of stagnation in the industry occasioned by uncertainties created by the failure to pass the Petroleum Industry Bill (PIB).
Based on the current official N410.11 per dollar exchange rate of the Central Bank of Nigeria, the $50bn translates into about N20.5trn investments lost to the non-passage of the PIB.
The Act which seeks to reform, promote transparency and attract capital flows into the oil and gas sector comprises five major parts, including Governance and Institutions; Administration; Host Communities Development; Petroleum Industry Framework; and Miscellaneous Provisions comprising 319 clauses and eight schedules.
One of the key recommendations of the bill is the unbundling of the NNPC and a revision of the funding mechanism.
To ensure the effective implementation of the Act, the President had on Wednesday set up a steering committee headed by the Honourable Minister of State, Petroleum Resources, Timipre Sylva.
The primary responsibility of the steering committee is to guide the effective and timely implementation of the PIA in the course of transition to the petroleum industry envisaged in the reform program.
It will also ensure that the new institutions created have the full capability to deliver on their mandate under the new legislation.
The committee has 12 months duration for the assignment, and periodic updates will be given to the President.
Speaking in Houston, Texas on Thursday, Kyari, who has been in the forefront of transforming the oil and gas industry and contributed significantly to the new structure, said it would promote good governance in the oil and gas sector in line with international best practices.
“The passage of the PIB will also attract capital, strengthen cost recovery and ensure decent returns on investment,” Kyari told the audience.
On the transformational impact the new law will have on the nation’s oil and gas industry, Kyari said, “It will help us to have a very transparent, clearly competitive physical framework, where you get to see opportunities on where you can put your money and also get back your money with some benefits.
“It will also refocus gas development in our country,” he sqid, adding, “What happened in the last few days is simply a transformation of activities and transformation of the environment for doing business, making our country very competitive.”
Since he came on board in 2019 as NNPC helmsman, Kyari, has focused on ensuring the passage of the PIB, which he described as a “game-changer for Nigeria’s oil and gas industry.”
The NNPC GMD said getting the petroleum legislation passed is the right thing to do because investors will not invest their money if they are not sure of how they are going to get their investment back, and what benefits they can get from their investment, as well as how stable the investment climate is.
“We are aware that the whole world is becoming a petroleum territory and no country will survive except you have a very competitive physical environment,” he said.