A new report by
The bill, which seeks to overhaul the oil and gas industry and offer new fiscal incentives to investors, according to the Minister of State for
However, FDC in its latest bi-monthly publication stated that even if the PIB is passed today, the country has already lost investment opportunities due to the lack of urgency attached to the passage of the legislation which was first transmitted to the lawmakers over 14 years ago.
"Its delay has sparked a great deal of uncertainty and led to an estimated loss of over
It said it was unlikely that
It listed the areas as the deregulation of the price of gas supplied to power plants, the
According to the report, price deregulation of gas supplied to power plants is a key ingredient in incentivising power output in
He added that while this is likely to translate to increased tariffs for electricity, it is needed to attract investment in both the gas and electricity generating industry.
On the NNPC's public offer, it stated that selling shares to the public will mean that the corporation will be able to source its own funding and come under a higher level of corporate governance and scrutiny.
Besides, it said while the adoption of a single regulator would ensure more efficiency and allow for enhanced cohesion in regulating the entire industry value chain, the PIB as currently constructed, recommended two regulators-one for the upstream and another for the midstream and downstream sectors.
FDC said it envisaged a situation where the PIB could also become a source of acrimony as it gives legal backing to the complete price deregulation of the downstream segment of the oil and gas industry.
It said: "
"While this 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 subsidy will cripple the government's finances if sustained, but deregulation is the only way to unlock domestic refining. There is simply no easy way around or through the dilemma. Something is going to have to give."
The report said the International Oil Companies (IOCs) were already squarely in the thick of the energy transition, while some were on well laid-out paths that would see them fully evolve to clean-energy companies.
For instance, it stated that
"The IOCs have stated that Nigerian onshore business is incompatible with their long-term strategy, which focuses on climate change and net-zero carbon emissions by 2050," the FDC document said.
FDC added that foreign oil companies have been gradually disposing of their onshore assets over the last decade, emphasising that beyond the obvious reasons of insecurity and unrest in the
With slightly under 40 per cent of
It added: "Other IOCs,
"What will happen to
"Do the indigenous producers have the capacity to acquire these assets even as we expect more divestments in the future across the continent? Does this create an opportunity for indigenous players in the oil and gas sector to grow the continental footprint?"
The report noted that it remains uncertain how the events will play out, adding that what is certain is that the passage of the PIB should have happened at least a decade ago and would have been crucial in the federal government's drive to achieve production of 4mbpd and domestic oil refining for regional exports.
Meanwhile,
The monthly report indicated that in the first quarter of 2021,
April production stood at 1.460mbpd and it was 1.388 barrels per day in May, leading to the loss of 72,000 daily barrels during the month.
But based on direct communication with
It wasn't immediately clear why production has remained low even after the country announced earlier in the year that it had fully complied with the
The country's average crude oil production based on secondary sources was 1.78 Mbpd in 2019 and 1.57mbpd in 2020, while total
"In
In terms of oil rig count,
The
The MOMR indicated that
It said the country registered the second consecutive quarterly growth since
"Industrial activity moved back into the growth of 0.9 per cent y-o-y, after dropping by 5.6 per cent on average in 2020. Moreover, the annual inflation rate declined to 18.12 per cent in
The report said
But
The cartel said demand would rise by 6.6 per cent or 5.95 million barrels per day this year, remaining unchanged for a second consecutive month, despite a slower-than-expected recovery in the first half of this year.
"Global economic recovery has been delayed due to the resurgence of COVID-19 infections and renewed lockdowns in key economies, including the
"Overall, the recovery in global economic growth, and hence oil demand is expected to gain momentum in the second half,"
The cartel stated that it sees 2021 world economic growth at 5.5 per cent, unchanged from last month, assuming the impact of the pandemic will have been "largely contained" by the beginning of the second half.
"The ongoing vaccination efforts, a growing share of recovered cases leading to increasing herd immunity, and the easing of lockdown restrictions lend optimism that the pandemic could be contained in the few months to come,"
In April,
The report showed higher
Copyright This Day. Distributed by AllAfrica Global Media (allAfrica.com)., source