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Nigeria loses $15bn yearly from non passage of PIB –Report

Kachikwu casts doubt on Nigeria's acceptance of an OPEC production cut

Nigeria loses an estimated $15 billion yearly from the non passages of the Petroleum Industry Bill (PIB).

This is according to the United States Energy Information Administration (USEIA).

The USEIA’s submission is contained a brief on Nigeria’s oil sector agency, in a report put together by Baker Hughes Incorporated, in conjunction with the Organisation of Petroleum Exporting Countries (OPEC)

The brief stated that “Regulatory uncertainty has resulted in fewer investments in new oil and natural gas projects, and no licensing round has occurred since 2007.

“The amount of money that Nigeria loses every year from not passing the PIB is estimated to be as high as $15 billion”.

It further stated that Nigeria has the second-largest amount of crude oil reserves in Africa, but exploration activity has slowed down due to rising security problems.

According to the agency, the PIB, which was initially proposed in 2008, if passed is expected to change the organisational structure and fiscal terms governing the oil and natural gas industry in the country.

It said: “International oil companies are concerned that proposed changes to fiscal terms may make some projects commercially unviable, particularly deepwater projects that involve greater capital spending”.

The report also noted that Nigeria recorded a slight increase in rig count of 26 in February, from its January 25 count in 2017, showing that a new method adopted by the country in computing the number of functional rigs in the upstream subsector of the oil and gas has worked.

The data from Baker Hughes, an international oil growth monitoring agency, with OPEC secretariat took the records of functional rigs in Nigeria, the 2016 record was still below what it had been in the past years.

Read also: Non-passage of PIB may stall Niger Delta peace deal

But despite the slight improvement, Nigeria is still rated eighth out of the 13-member OPEC countries , whose total rig count maintained increase to 554, from the 550 recorded in the same period under review.

The data further showed that Nigeria’s rig count still falls below the 30 recorded about this time in 2015 and 34 recorded in 2014.

Saudi Arabia is reported by the agency as leading with a rig count of 155, followed by Venezuela, 96, Iran, 61, Kuwait, 59, Algeria, 50, United Arab Emirate, 49, Iraq, 40, Qatar, 11, Ecuador, 7, Angola, 3, Libya, 1, Gabon, 0. Africa’s non OPEC members still maintained the 16 rig count it recorded in January.

In his reaction, the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, said Nigeria has remained committed to creating a level playing field in the sector.

He was quoted as saying that Nigeria is still benefitting from OPEC and non-OPEC producers exemption given the country for production output-cut in November 2016.

But officials of the ministry said cases of some oil majors conniving with some corrupt rig inspectors from the NNPC to under report functional rigs were brought to the attention of the minister, a situation which called for a different approach to monitoring of the rigs.

 

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