PIA will bring development to host communities, says NEITI S’South Rep
Member representing South-South geopolitical zone in the Nigerian Extractive Industry Transparency Initiative (NEITI) Board, Awowo Christian has said there will be improved development expected in the country with the creation of the different development funds by the President Mohammadu Buhari-led administration. He made this known while speaking on his appointment into the Board and the responsibilities that lie ahead.
“I appreciate President Muhammadu Buhari for signing the Petroleum Industry Act (PIA) bill into law because the oil and gas sector in Nigeria over the years has suffered setbacks due to lack of proper governance. Now, the petroleum industry in Nigeria has good governance. Before now everything was around and about NNPC but today, we have the Nigeria Upstream Regulatory Commission and the Nigeria Midstream and Downstream Regulatory Authority.
These two agencies are in charge of the oil and gas sector.
“The frontier basins in Nigeria are known to be prolific in Hydrocarbon. Most of them, especially the Anambra, Lake Chad, Bida, Calabar Flank, etc. They are proven to be very rich in Hydrocarbon Scientifically.
Knowing the importance of gas to the economy of the country in crucial areas such as power generation, industrial development, domestic utilisation and fuelling of machineries, vehicles and vessels. As it stands today, if you need gas in Kano to set up a plant, you have to connect pipeline from either Eskravos in Delta state or Brass in Bayelsa State, which is Agip, Or Bunny Terminal in Rivers all the way to Kano. Is highly capital intensive to do that.- that’s a problem. But, if we have gas in Bida basin or Sokoto Basin and it’s developed and made available for all of these industries across the country, it will reduce the cost and ease the country road map to industrialization.
Of course, Industrialization comes with multiple benefits. Such as job creation, GDP growth and increase our export potential and improve the Nation’s income per capital.
PIA is coming up with such fund will help the country develop gas infrastructure evenly across the country for ease of doing business and increase the Nation’s wealth.
My only reservation is that the fund should be called Frontier Basin Exploration and Development Fund. Why because the law has come to stay and a provision has been made for funds to come in from NNPC profit sharing (30%) annually for this purpose. So what happens if the commission in future complete the exploration of all the Frontier basins in Nigeria. It becomes a dormant Fund and misappropriation will set in.
On what PIA will address, he said: “Over the years, the oil companies in Nigeria were so much interested mostly in the oil for the cheap reason. Gas is either flared or reinjected into the reservoir to boost oil recovery. This has been the practice since inception of oil exploitation in Nigeria whereas undermining the huge benefits of Natural Gas to the country. With the PIA coming in place, the industry will be liberalised, and we will have more players coming in to develop the Gas sector. Flaring of gas is actually environmentally unfriendly, so if we compress this natural gas and utilize for power generation, industries are going to grow. There will be job creation because there will be industrial growth.
Speaking on if PIA will address gas flaring, he said: “There’s a penalty in the PIA regarding gas flaring. When you flare gas, there’s a fine you pay and the good thing now is that that gas flaring penalty instead of going to the national coffers, it’s going to the host community development fund because they are actually the ones suffering from gas pollution.
We hope and believe since the industry now supports the gas infrastructure development, and of course, there’s a 0.5 per cent Midstream and Downstream Gas infrastructure development fund. How is that fund coming? Every bulk procurement of petroleum product in Nigeria, be it PMS, be it diesel, kerosene, aviation fuel, natural gas, you are going to pay 0.5 per cent of that bulk procurement into a fund that is referred to as the Midstream/Downstream Gas infrastructure development fund. It is in the PIA and those funds are going to help the country develop the gas infrastructure.