• Urges support for local refining, workers’ welfare • TotalEnergies: Nigeria needs to turn oil reforms into bankable projects Onyebuchi Ezigbo in Abuja and Peter Uzoho in Lagos The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) yesterday cautioned against subjecting the Petroleum Industry Act (PIA) to frequent alterations, saying that such measures may have negative impact on efforts to attract fresh investments into the country’s oil and gas industry. It cited the removal of some fiscal provisions and moving them to the Nigeria Revenue Act, describing the development as appalling and capable of eroding investors’ confidence in the sector. The association also said serious consideration should be given to efforts at promoting local refining of products and protection of interests and welfare of workers in the oil and gas industry. PENGASSAN President, Festus Osifo, who spoke yesterday, at the 5th Labour and Energy Summit in Abuja, faulted the use of executive orders by the federal government to amend provisions of the petroleum law. The PIA was passed in 2021 by the National Assembly and signed into law on August 16, 2021. The new law affected the legal, fiscal, and regulatory framework of Nigeria’s oil and gas sector and led to the creation of a commercialised limited liability company (NNPC Ltd) out of the old Nigerian National Petroleum Corporation (NNPC). Osifo said the capital-intensive nature of the oil and gas industry makes it necessary for government to exercise caution in tinkering with the laws governing the sector. Osifo said rather than instill confidence or promote stability, frequent alterations “amplify uncertainty and disruption in the sector”. “Host-communities need confidence. Governments need sustainable revenues. Nigerians need an industry that translates our enormous hydrocarbon resources into economic prosperity. “For this to happen, our regulatory environment must be predictable, transparent, efficient and fair to all. The PIA of 2021 represented a significant milestone after decades of attempts to reform the industry. “Five years into its implementation, however, we have seen considerable alterations to the framework, including the removal of some fiscal provisions and their movement to the Nigeria Revenue Act, as well as the use of an executive order to amend provisions of the law,” Osifo lamented. The PENGASSAN President urged government to implement policies that support local refining of petroleum products, including expansion of Liquefied Natural Gas (LNG), Compressed Natural Gas (CNG) should be encouraged. Osifo said two principal petroleum regulators – the NUPRC for the upstream operations and the NMDPRA for the midstream and downstream – currently exist under the PIA, alongside several other federal and state institutions, whose statutory responsibilities intersect with oil and gas operations. He said the main challenge was not in the number of institutions, but their efficiency in the delivery of their mandates. “When responsibilities overlap, operators should not be subjected to repetitive approvals, multiple inspections or conflicting directives. Regulation must provide oversight without creating avoidable due decreases. “Regulation should never become an obstacle to investment, but Nigeria should investment become an excuse for weak standards. “There must be a balance. As an association, we remain particularly concerned about the human consequences of regulatory and commercial decisions,” he said. Osifo also said serious consideration should be given to protection of interests and welfare of workers in the oil and gas industry. “Licencing and assets may change hands, but workers are not commodities to be discarded at will. When major acquisitions and divestments occur, jobs are crude benefits. Pensions, collective bargaining agreements and other established life of workers must be protected,” he said. Osifo cautioned against abuse of expatriate quota provision in the petroleum sector, adding that such should not become a mechanism for replacing qualified Nigerians with foreign personnel in jobs for which local capacity exists. According to him, the Nigerian Content Framework requires succession plans, understudies and deliberate naturalisation of expatriate positions. He said the federal government must ensure that relevant legislations and policies guiding operations in the oil and gas sector especially those dealing with local content are adhered to by stakeholders. “These provisions must be enforced. Every expatriate engaged should ultimately leave behind greater Nigerian capacity. We cannot breach local content in procurement while neglecting local content in employme
Don't miss out on breaking stories and in-depth articles.
