The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has said that non-passage of the Petroleum Industry Bill (PIB) posed serious challenges to investments in the sector.
Sheyi Gambo, the National Public Relations Officer of PENGASSAN, who stated this said that the bill was yet to be passed 12 years after stakeholders’ arguments and counter-arguments over its importance.
He expressed regret that this was in spite of promises by some members of the National Assembly that the bill would be passed before the end of 2013.
According to him, non-passage of the bill is responsible for investors’ apathy in the oil and gas sector.
“A development that has led to the holding back of several billion dollars worth of investments expected in the economy through the oil industry.
Gambo said that the delay in passage of the bill was among several other uncertainties holding back most International Oil Companies (IOCs) planned investment of about $100 billion in offshore deepwater projects.
He said that some oil companies, which planned to invest in the oil and gas sector, would rather wait for stable and right conditions before they could commit their finances to any project.
Gambo lamented the continued loss of revenues and investments due to the delay in the passage of the PIB, crude oil theft, bunkering and insecurity, among others.
He said that the oil and gas industry might be slipping into the situation when it took Mexico about 50 years to recover from such challenges in its oil industry.
“I recall the Mexican story, it took the country 50 years to recover from that loss in oil production and my worry is that we are slipping into that.
“Even today, if we produce a modest of three million barrels per day and just assume a modest decline rate of 10 per cent that leaves us with 2.7mbpd.
“What this means is that for us to maintain that level of three million barrels per day, we must produce additional 300,000bpd.
Gambo said that non-passage of the bill was hurting indigenous oil servicing companies as this had led to few jobs for them, while many of them are contemplating sacking some of their staff.
He said that IOCs are holding onto investments because of the non-passage of the bill.