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Failure to pass PIB costs $15 billion in investment losses
- Delay of PIB sparks uncertainty in the sector
- IOCs mobilising to drop Nigerian assets
The Financial Derivatives Company Limited (FDC), in its report on the Oil and Gas sector, has said that the failure of the National Assembly to pass the Petroleum Industry Bill (PIB) for the past 14 years has cost Nigeria at least $15 billion in losses annually. The FDC stated that the delay in the passage of the PIB would create uncertainty in the sector.
”Its (PIB) delay has sparked a great deal of uncertainty and led to an estimated loss of over $15 billion annually in lost investments to Nigeria’s oil and gas industry. With the global shift from fossil fuels to renewable forms of energy picking up pace, the passage of the PIB may just be too little, too late,” the FDC report added”, the report read.
The report noted the global energy transition drive and feared Nigeria might lose the opportunity to attract critical investments for the oil and gas sector. It also noted the recent move by the International Oil Companies (IOCs) to drop their Nigerian assets in favour of cleaner energy sources. FDC stated that the Nigerian Oil and Gas sector must attain full price deregulation to attract investments. The recent proposal by the Nigerian Governors Forum (NGF) shows the importance of full deregulation of the sector.
”While this (deregulation) will bring relief to the state governments that have been grappling with lower revenues, the chance of the federal government allowing such a spike in the near term is slim because of the negative impact on the poor”, the report noted.