- Oil Industry: PIB Tops Stakeholders’ Concerns
The nation’s oil and gas industry could get back on its feet this year, according to industry experts, if the critical issues such as the passage of the Petroleum Industry Bill and the concerns in the Niger Delta are properly addressed, ’FEMI Asu reports.
With another year gone without the passage of the Petroleum Industry Bill, industry experts have expressed concern that the bill may suffer serious setback as electioneering kicks off ahead of the 2019 elections.
A key obstacle to the growth of the Nigerian oil and gas industry has been widely described as the regulatory uncertainty caused by the delay in the passage of the PIB.
The bill, which seeks to change the organisational structure and fiscal terms governing the industry, suffered setbacks in the 6th and 7th National Assembly.
Currently before the 8th National Assembly, it was split into four parts — Petroleum Industry Governance Bill, Petroleum Industry Administration Bill, Petroleum Industry Fiscal Bill and Petroleum Host Community Bill — to fast-track its passage into law.
The Senate on May 25, 2017 passed the PIGB, with its President, Dr. Bukola Saraki, saying in September that the upper chamber was working to ensure the passage of the other bills in the fourth quarter of last year.
The Chairman, National PIB Committee, Petroleum and Natural Gas Senior Staff Association of Nigeria and Nigeria Union of Petroleum and Natural Gas Workers, Mr. Chika Onuegbu, stated that the Senate promised to pass the other aspects of the PIB in the first quarter of 2018.
He said, “It is our hope that they will deliver on that promise. Let them see what they can do to make sure that the public hearing on the remaining three bills are done to ensure the passage of the bills in Q1 2018, so that we will know that by Q2, the pressure will be on the President to assent to those bills.
“For Nigerians and those in the industry, we want to see the passage of a PIB that actually addresses the concerns of stakeholders and move the industry forward. We hope that the President and his team should fast-track the reform in the industry by ensuring that the PIB actually becomes law latest by the second quarter because thereafter, politics will take over every other thing that we will do as a country.”
Onuegbu said the outlook for the industry looked bright considering the recent rally in global oil prices.
“So, the next thing is about production, and that is where the issues around the Niger Delta come in; that is where the policies of the Federal Government come in, so that Nigeria will continue to benefit from the gradual recovery in oil prices,” he added.
An energy expert and associate professor, University of Lagos, Dr. Ayoade Adedayo, said, “The outlook does not look all that bright. Although last year, the minister (Kachikwu) was able to get through his policy documents — the national petroleum policy and national gas policy – the problem is that until we pass the PIB, we are still in the same rot, and while we remain in the rot, the industry will not recover; the transparency, governance and investment concerns will continue to haunt us.”
He decried the lack of investment in exploratory activities in the industry in recent years, saying, “If the rig count in a country is low, it shows the country is not healthy, and I think that the health of the sector should be a big concern to all the policymakers.”
“My concern is that because we are moving already into the territory of national elections, there is no way the National Assembly people will be focused enough to drive this legislation through,” Adedayo said.
The Vice President/Head of Energy Research, Ecobank, Mr. Dolapo Oni, said the industry had gone through a lot in recent times, adding, “The key things we are looking forward to in 2018 are regulatory changes. We expect all the various bills that are at different stages to gain some traction.
“I think people are interested in marginal fields bid round but financing the acquisitions is going to be a challenge.”
The Chief Executive Officer, Gacmork Nigeria Limited and ex-Chevron executive, Mr. Alex Neyin, who stressed the need to create an enabling environment for investors, expressed concern about the management of the industry.
He said, “My major concern is that they don’t have the right people to manage the industry. As long as the government is focusing more on what it can get, they are going to be in trouble. It is very unfortunate that we find ourselves in this mess.
“When you don’t have a defined policy, investment in the industry will be difficult. People want to see clear, definite policies so that when they invest money, they know when they get return on their investment.”
According to an energy expert and Partner at Bloomfield Law Practice, Mr. Ayodele Oni, there is too much vested interest in the PIB.
He said oil production would likely remain high for most of the year with the government trying to impress ahead of the 2019 elections.
“Insurgency may commence in late 2018 in the Niger Delta in a bid to discredit the government ahead of the elections,” he added.
Illegal Withdrawals: Rep To Investigate NNPC, NLNG Over $1.05bn
Rep To Investigate NNPC, NLNG Over Illegal Withdrawal of $1.05bn from NLNG Account
The Nigerian House of Representatives has concluded plans to investigate illegal withdrawal of $1.05 billion from the account of the Nigerian Liquefied Natural Gas Limited (NLNG) by the Nigerian National Petroleum Corporation (NNPC).
The decision followed the adoption of a motion titled ‘Need to Investigate the Illegal Withdrawals from the NLNG Dividends Account by the Management of NNPC’ moved by the Minority Leader, Ndudi Elumelu, on Tuesday.
The House adopted the motion and mandated its Committee on Public Accounts to “invite the management of the NNPC as well as that of the NLNG, to conduct a thorough investigation on activities that have taken place on the dividends account and report back to the House in four weeks.”
Elumelu said, “The House is aware that the dividends from the NLNG are supposed to be paid into the Consolidated Revenue Funds account of the Federal Government and to be shared amongst the three tiers of government.
“The House is worried that the NNPC, which represents the government of Nigeria on the board of the NLNG, had unilaterally, without the required consultations with states and the mandatory appropriation from the National Assembly, illegally tampered with the funds at the NLNG dividends account to the tune of $1.05bn, thereby violating the nation’s appropriation law.
“The House is disturbed that there was no transparency in this extra-budgetary spending, as only the Group Managing Director and the corporation’s Chief Financial Officer had the knowledge of how the $1.05bn was spent.
“The House is concerned that there are no records showing the audit and recovery of accrued funds from the NLNG by the Office of the Auditor-General of the Federation, hence the need for a thorough investigation of the activities on the NLNG dividends account.”
FG Gives Radio, Tv Stations Debt Relief, Writes Off 60 Percent Debt
FG Reduces Tv, Radio Stations Licence Fee by 30%, Writes Off 60% Debt
The Federal Government has reduced the existing licence fee paid by all open terrestrial radio and television stations by 30 percent.
The Minister of Information and Culture, Lai Mohammed, disclosed this at a press conference in Abuja on Monday.
He said the Federal Government has also decided to write off 60 percent of the N7 billion loan owed the government by television and radio stations.
He explained that the N7 billion is the total outstanding from television and radio stations on the renewal of their operating licences.
Mohammed, however, said for any station to benefit from the 60 percent debt relief, such a station must be ready and willing to pay the remaining 40 percent within the next three months.
According to him, the debt relief offer would open on July 10th and close on the 6th of October.
Mohammed said, “According to the NBC, many Nigerian radio and television stations remain indebted to the Federal Government to the tune of N7bn.
“Also, many of the stations are faced with the reality that their licences will not be renewed, in view of their indebtedness.
“Against this background, the management of the NBC has therefore recommended, and the Federal Government has accepted, the following measures to revamp the broadcast industry and to help reposition it for the challenges of business, post-COVID-19:
“(a) 60 per cent debt forgiveness for all debtor broadcast stations in the country; (b) the criterion for enjoying the debt forgiveness is for debtor stations to pay 40 per cent of their existing debt within the next three months.
“(c) Any station that is unable to pay the balance of 40 per cent indebtedness within the three-month window shall forfeit the opportunity to enjoy the stated debt forgiveness.
“(d) The existing license fee is further discounted by 30 per cent for all open terrestrial radio and television services effective July 10, 2020.
“(e) The debt forgiveness shall apply to functional licensed terrestrial radio and television stations only. (f) The debt forgiveness and discount shall not apply to pay TV service operators in Nigeria.”
Nigeria’s Inflation to Average 12.2 Percent in 2020 Says PwC
PwC Says Inflation Will Average 12.2% in 2020
PricewaterhouseCoopers (PwC) has predicted that the nation’s inflation rate will average 12.2 percent in 2020.
In the report titled ‘Demand and supply shocks from COVID-19 keep inflation higher for longer’, the company based its projection on the rising cost of goods and services due to the supply shocks to commodity and the COVID-19 negative impacts on the economy.
The report explained that the supply disruption brought about by lockdown measures put in place to mitigate COVID-19 spread pushed headline inflation to its highest in 23 months in the month of May 2020.
Nigeria’s headline inflation rose by 12.4 percent year-on-year in the month of May. Its fastest pace of increase in 26 months, according to the National Bureau of Statistics (NBS).
However, PwC said because of the growing global uncertainty due to the projected second wave of COVID-19 and declining household incomes, headline inflation will increase from the average of 11.4 percent recorded in 2019 to average 12.2 percent in 2020.
“Barring a second wave of the pandemic, which could further threaten outlook for global economic growth, coupled with the absence of major shocks to food supply in Nigeria, inflation outlook for rest of the year could be influenced by two factors. Firstly, the elevated base effect, and secondly, waning household incomes. The first factor is likely to have a greater impact.”
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