Shell Nigeria Exploration and Production Company (SNEPCo) has said that the Petroleum Industry Bill could throw the gas sector into more crisis and further stunt the growth of the sector if passed into law in its current state.
Managing Director of SNEPCo, Mr. Bayo Ojulari, who disclosed this during an online forum organised by the British Nigeria Chamber of Commerce (NBCC), Ojulari stated that the PIB as it is currently is not enabling enough and not fully aligned with the direction that Nigeria has articulated around the “Decade of Gas” as propagated by the administration of President Muhammadu Buhari.
He said following the condition set for exportation of gas resources by companies operating in the sector, the proposed petroleum governance bill will stifle competition.
According to him: “The terms and prices of gas development, especially for deep non-associated gas, need to be more competitive. Today, it is actually looking worse than it is in the current environment and that’s an area that has not enjoyed a level of emphasis.
“Today, the PIB does not do any justice or to help to unlock the huge potential that we have in the non-associated gas environments. With the potential of gas to power our economy, the focus should be more on competitive discuss that will stimulate gas.
“Currently, the version of the PIB that we have is not sufficient and will not enable us to incentivise investors to unlock the huge non-associated gas that we have.”
Ojulari,who spoke on the nation’s domestic gas space, said the PIB needs the fulfilment of domestic gas obligation as a condition to export gas, which potentially puts long-term export gas supply at risk.
He added that the country needs to move away from the “unproductive” debate about satisfying local need before shipping gas abroad.
He called for a delicate balancing between the political drive and the business needs of the PIB, saying that many of those who discuss the matter are approaching it from the point of emotions, rather than reality.
He added: “ A lot of people who talk about the gas business in the gas value chain come from the emotional side. But emotion does not create a business, emotions do not attract investors, emotions do not sign contracts.
“So, I will say that while we recognise those emotional elements, we need to create a platform where the companies and the entities that have these resources will come together in a conference facilitated by the minister of state and let us have that conversation.”
He stated that everybody is currently doing the economics of the gas sector from their own point of view, and there’s no consensus on the way forward for the gas sector in the PIB.
He wondered why the NLNG model was not adopted since it has been tested to be workable, explaining that there is sufficient gas resource that will meet both domestic and gas export.
He advocated the need for further review of the PIB to ensure that it delivers and contributes to the ambition that Nigeria has set for itself to be in the class of Qatar and Australia whose economies are largely run on revenues from gas.
He also demanded for a conference of all stakeholders, to be called by the Minister of State, Petroleum Resources, Chief Timipre Sylva, to resolve the differences in the Petroleum Industry Bill.
