| The emerging transformation in Nigeria’s oil and gas sector will dominate discussion at the upcoming African Energy Week (AEW) in Cape Town South Africa, this November. At the African Energy Week AEW 2021 in Cape Town, the benefits of the Petroleum Industry Act (PIA) will be outlined by Mele Kyari, Group Managing Director of the Nigerian National Petroleum Corporation (NNPC). Nigeria has made significant progress in reforming its own oil and gas industry in 2021, according to NJ Ayuk, Executive Chairman of the African Energy Chamber (AEC). The progressive legislation being passed into law has not only restructures the domestic sector but also makes Nigeria a more attractive investment destination for international players. With the passage of the Petroleum Industry Act (PIA), Nigeria has cemented its position as Africa’s premier energy market, according to Ayuk. The Petroleum Industry Act (PIA) comprises a complete overhaul of the administrative, regulatory and fiscal regime in Nigeria’s energy sector, restructuring key petroleum institutions in order to streamline processes and drive the country’s oil and gas industry expansion. As the country faces challenges of declining oil production from mature fields, coupled with the reduced capital expenditure climate brought about by the COVID-19 pandemic, the Petroleum Industry Act (PIA) aims to enhance the sector’s attractiveness for foreign investment, ensuring a market-driven regulatory environment that will accelerate the country’s industry developments. The Petroleum Industry Act (PIA) aims to improve the sector’s attractiveness for foreign investment by ensuring a market-driven regulatory environment that will accelerate the country’s industry developments, as the country faces challenges such as declining oil production from mature fields and a reduced capital expenditure climate due to the COVID-19 pandemic. Notable regulatory reforms implemented through the Petroleum Industry Act PIA include the creation of a new upstream regulator a Commission which has replaced the Department of Petroleum Resources (DPR), the creation of a new Nigerian midstream and downstream petroleum regulatory authority; and the complete overhaul of the NNPC to be replaced by the NNPC Limited which will operate on a commercial basis without government funding. Accordingly, Nigeria has placed transparency at the center of its reforms. Additionally, fiscal reforms include the reduction in the taxation and royalty-take of new/converted licenses from the prior regime; and the introduction of a hydrocarbon tax to replace the existing petroleum profits tax. By incentivizing investment, the government is focused on accelerating development across the entire energy sector value chain. With over 200 trillion cubic feet of natural gas reserves and 36 billion barrels of oil, Nigeria is well positioned to become a global energy player. The emerging transformation in Nigeria’s oil and gas industry will transcend into the prices of Petroleum Products AGO PMS DPK, this is mainly because with the cutting out of bottlenecks and red tapes the industry will no longer be under government regulations, and the market forces will fully be in place, opening the door for a competitive market within the sector. With the scraping of the DEPARTMENT OF PETROLEUM RESOURCES (DPR) and PPPRA, it’s makes the Industry more investment friendly with private players in position to utilize the full profits involved. However, it’s very certain that with these regulatory agencies gone, the prices of Petroleum Products AGO PMS DPK will reflect the International pricing system, which definitely means an upward spike in prices is imminent. |
Source: Oriental News, Aim press, Reuters.
