- FG must address the gas challenges in the sector
- Ige expects the impact on the economy to show in two years
The Chief Executive Officer of GasInvest Limited, David Ige, has highlighted the need for the Federal Government to address the challenges in Nigeria’s gas sector. In an interview with Thisday Newspapers, Mr Ige stated that the signing into law of the Petroleum Industry Act (PIA) was a welcome development. However, the prevailing challenges in the sector must be addressed to ensure a successful implementation of the PIA.
Speaking on the prospects of the PIA on the gas sector with the newly signed PIA, Ige said, ”Prior to today, there was no legal framework for gas. What we had was a cocktail of fiscal bills or statutes over the years targeted at specific fiscal gaps or interventions. Collectively, they didn’t add up to a comprehensive legal framework to stimulate or sustain a vibrant gas market or gas environment.”
”So, now, at least the first step is crossed. We have a dedicated legal framework that is focused on gas. There are a few highlights arising from this enactment for gas. Number one for me is that it introduces a regulator for the midstream/downstream segment which largely covers the gas market.”
”Investors in gas will typically be looking for a liberalised market or signals to a liberalised market. I think there seems to be more signals towards a regulated gas market than a liberalised gas market in this Act, and I think, for me, that’s probably one of the weaker areas of the Act.”
On the issue of a willing-buyer, willing-seller market, Ige said, ”I think in gas, as we speak today, the market is comprised of both regulated and willing buyer, willing seller elements. So, already, we have started the willing seller, willing buyer in the market. What the Act should have done is to consolidate that regime and put very specific steps in specific timelines to now make it even more global.”
Mr Ige also spoke on when to expect the impact of the PIA on the economy. ”I think we would begin to see the impacts in about say two years -18 months to two years. And usually, when I talk, I talk from the gas perspective than anything else. When you look at the fiscal terms that have been introduced in this one, both in the upstream and midstream, it is going to stimulate investments in gas. For example, it takes about a year to 15 months before that matures into the market.”
GasInvest Limited is a firm that provides consultancy services for local and international investors in the oil and gas sector.