Last week, I moderated a panel on the Petroleum Industry Act (PIA), and I asked the panellists for their thoughts on the PIA’s impact one year down.
The most optimistic answer I got was from Dayo Okusami, a partner at Templars, who said he never thought the PIA would be passed, so it exceeded his expectations. For context, the Act took 20 years to pass, so you can appreciate Okusami’s point of view. However, if I had to answer the same question, I would say that my opinion on the PIA written in this article when it passed still stands—it’s too little and too late.
It’s been one year since the President signed the Petroleum Industry Act (PIA), which was supposed to reform the oil and gas sector and attract investors to develop the sector.
But, one year down, implementation of the PIA has been spotty. Reforms like subsidy removal and host community development have been delayed, while others, like the incorporation of the NNPC, have been problematic.
The only part of the sector that has seen renewed investor interest is the gas sub-sector. But even that has been because of the Russia-Ukraine crisis, not the PIA.
Yes, there have been some changes—the NNPC is now a private limited company, and there are new regulatory agencies for the oil and gas sector, two significant changes the PIA achieved. But, when we assessed the PIA last year, we assessed it based on its core objective: to attract investment to Nigeria’s oil and gas sector. Taking our analysis back to the PIA's first principle allowed us to look at its provisions through a singular lens, and we concluded that it wasn’t enough. One primary reason was that the PIA’s terms were no match for the poor state of the sector, especially due to vandalism and theft.
Before the PIA passed, the statistic that shook the Nigerian government was that out of $70 billion invested into African oil and gas between 2015 and 2019, our oil and gas industry only attracted 4%. With this low investment and our recent production, it’s easy to miss that we’re supposedly the giants of African oil.
Well, one year has passed, so we’re going to assess what the PIA