By Babajide Okeowo
The much-awaited Petroleum Industry Bill will include a provision for low taxes which will in turn enhance stable investments in the petroleum sector.
Minister of State for Petroleum Resources, Mr. Timipre Sylva gave this assurance to operators in the sector while delivering a remark at the virtual seventh joint International Energy Forum and International Gas Union (IEF-IGU) ministerial gas forum.
The minister also noted that the country’s plan to step up growth of its oil industry has not been impacted heavily by the coronavirus. While adding that key priority projects the country planned to execute in 2020 have not been derailed.
“We are not unmindful that the industry players are of the view that the current level of taxation on onshore and shallow water operations is excessive and therefore the proposed PIB should include a significant lowering of these taxes for new investments and for existing operations.
As a government, we have identified major constraints that have delayed recent projects from reaching financial close or caused projects to be delayed and/or abandoned altogether. The PIB before Nigeria’s legislative arm that we propose will, I believe, provide this new framework.
To secure the future of the industry in Nigeria, fiscal and other terms must be based on a more conservative economic outlook. A framework must be created for the Nigerian petroleum industry to grow and invest in additional petroleum production even under difficult economic conditions.
For this reason, we are proposing grand fathering in the new PIB. The proposed PIB framework shall be based on core principles of clarity, dynamism, neutrality, open access and fiscal rules of general application,” he said.
Speaking further on the challenges the coronavirus has brought on the industry, he delved on the desire of the FG to continually pursue its target.
“The pandemic has affected the industry, but for us in Nigeria, it has not derailed our pursuit of the key priority projects/targets of the federal government.
We need to accept the fact that our new reality will not be a snap-back to where we were, but an ongoing recovery process” he added.
On the plans the country has set up to develop its gas resources and how well they have gone, the minister stated that they are focused on the development of industrial and transport gas markets as well as gas-for-power.
“We believe gas will become the dominant fuel for generating power not only in Nigeria but in Africa as well. We have commenced the implementation of carefully conceived initiatives to foster productivity and attract investments along the gas value chain” he posited.
This, he explained includes the promotion of natural gas as alternative fuel in Nigeria.
“Substituting traditional white products with gas will cushion the effects of deregulation and create enormous job opportunities for Nigerians.
It is expected that this will stimulate economic growth, further improve our energy mix, drive investments, and provide jobs in Nigeria” Sylva concluded.
Recall that Nigeria has repeatedly failed to pass the PIB, a bill expected to help reform her oil sector when passed into law.
The PIB is considered relevant to the country’s quest to make its oil industry regain its competitiveness, but it has been stalled by interests and politics.
Recall also that a new version of the bill was recently submitted to the National Assembly for legislative consideration.
