The Institute of Directors Nigeria (IoD) says it would continue to lend its voice given its mandate as a foremost institution by bringing to fore some Nigerian policies such as the Petroleum Industry Act to drive economic growth and development.

 

Dr Ije Jidenma, President, IoD, said this in her welcome speech at the IoD Nigeria National Stakeholders’ Forum on The Petroleum Industry Act (PIA) 2021, with the theme: ‘’Petroleum Industry Act, Governance and the Investor’’.

 

The event which held on February 3, 2022 had major stakeholders of the energy and power sector such as Mr. Victor Eromosele, F.IoD,  Chairman, Energy & Power Committee, Institute of Directors Nigeria, Mr. Gbite Adeniji, Managing Partner, ENR Advisory.

 

Others are: Mr. Theophilus Emuwa, Managing Partner, Aelex Legal, Mrs. Audrey Joe-Ezigbo, M.IoD, Deputy Managing Director, Falcon Corporation and Vice Chairman, Energy & Power Committee, Institute of Directors Nigeria and Mr. Osten Olorunsola, Chairman, Energy Institute of Nigeria.

 

Jidenma said the event provided the opportunity for stakeholders to review the PIA and ruminate on the opportunities it portends, the structures it creates, the governance implications and address all concerns.  This move, the IoD President said, would help to engender better understanding and help the business community to take full advantage of the Act. She said the Petroleum Industry Act was expected to be a roadmap for potential and existing investors and also provide clarity and guidance in this area. 

 

According to the governance professional, the PIA introduces revolutionary and pertinent changes to the governance, administrative, regulatory, policy formation and fiscal framework of the Nigerian Petroleum Industry   "We are excited that the Petroleum Industry Bill has been signed to a law even though the nation waited for almost two decades to achieve this.  "While it may not be a perfect piece of legislation at the moment, all hands must be on deck to clean all the rough edges." We must ensure that through this Act, we would create a most conducive business environment for investors, both local and foreign in the petroleum industry.

"Expectations are very high that adherence to the extant provisions of the Act will bring about and ensure transparency in the industry, strengthen the governing institutions and attract investments, amongst other laudable objectives," she said.

 

The IoD Boss, however, noted that a number of stakeholders had expressed concerns over certain provisions of the PIA.  Those concerns, Jidenma said, represented varying interests of stakeholders, which, they claim may inhibit the successful implementation of the Act. 

She stressed that given the importance of crude oil to the country, ignoring development in the sector was at the peril of the citizens. She noted that petroleum products contributed about 9.3 per cent to the Gross Domestic Product (GDP) and amounted to $2.1 trillion in government total revenue in 2021 despite the global pandemic.  "It is therefore pertinent to address these concerns, and in a timely manner too, in order to ensure that the lofty objectives of the PIA are achieved for Nigeria’s economic growth and development," she said.  

Also speaking at the forum, Mr Gbite Adeniji, Managing Partner, ENR Advisory, noting the newness of the PIA,said it may take a few years for the desired governance culture to emerge. Adeniji said that while the innovations, regulatory framework and roles of the PIA were clearer, many agencies of government roles were not independent which created potential for inter-agency conflict on environmental and competition regulations.

He said that the Act sidestepped the opportunity for the creation of an engine room for creative thinking and effective sector supervision in the office of the Minister of Petroleum Resources. “The dual regulatory model is problematic with implications for cost, time and efficiency to investors, consumers and the nation. “The mind of the nation is not sufficiently settled around governance and the issue is less about the law than about the culture of governance in Nigeria,” he said.

Mr Osten Olorunsola, Chairman, Energy Institute of Nigeria, said the Act addressed the significant overhaul necessary in area of governance, uptake of new technologies, fiscal competitiveness, downstream operations and community inclusiveness. “The endgame of a well-implemented PIA would be a well-managed petroleum sector, institutionalised by good governance, and ease of doing business,” he said.

Mrs Audrey Joe-Ezigbo, Deputy Managing Director, Falcon Corporation, noted that the positives of the Act is that it would send a strong signal of the optimisation and build up of the petroleum value chain. She said that the framework which would boost gas investments showed good potential for existing investors and interested investors, with its signals for a more robust market and clarity. Joe-Ezigbo, however, stressed the need for Nigeria to hugely invest in infrastructure inclusive of rail and marine transportation, to get gas to remote areas. 

Mr Theophilus Emuwa, Managing Partner, Aelex Legal, explained some of the fiscal changes investors must know to include reduction of headline taxes, elimination of some incentives and double dipping, new model for royalty calculation and smaller acreage sizes. He stated that upstream companies were now subjected to two tax statues payable on current year basis in monthly instalments under the PIA.