November 2020 Edition

NAPE WEBINAR SERIES August Edition
Fiscal Regime Design, Government Revenues,
and Investors' Interest in Nigeria's Oil & Gas Sector
Timipre Sylva, Honorable Minister of State, Ministry of Petroleum Resources
Let's wait for the stew that has
“been cooked, I can smell it”.
This was the response of Osten
Olorunsola, moderator of the August
edition of the NAPE Webinar Series to
speculations on the final complexion of
the much-awaited Petroleum Industry Bill.
Mr. Olorunsola should know. He spent
valuable time in the public service. First as
Adviser to two Ministers of Petroleum
Resources and later Director of Petroleum
Resources where he joined efforts to
reform the oil and gas sector, later
becoming the Technical Lead for the
drafting of the Petroleum Industry Bill
(PIB) between 2010 and 2019. He
remains a frontline Adviser to the National
Assembly on oil and gas matters
The theme of the Webinar held on August
20, 2020 was Fiscal Regime Design,
Government Revenues and Investors'
Interest in Nigeria's Oil & Gas Sector. The
Guest Speaker was the Honourable
Minister of State, Ministry of Petroleum
Resources, His Excellency, Chief Timipre
Sylva.
In setting the context for the Webinar
discussions, the Co- Moderator of the
event, the voluble NAPE Publicity
Secretary, Abdullateef Amodu, asked Mr.
Olorunsola to give a brief overview of the
theme of the webinar as well as the key
policy initiatives of the PIB. Responding,
Mr. Olorunsola said '' within the
fundamentals required to drive business
in the oil and gas sector, fiscal regime
design is one of the most critical factors for
investment decisions'' he added that '' it
speaks of revenues, how they are made,
h o w t h e y a r e s h a r e d , a n d m o s t
importantly the fairness of the sharing''
He further stated that '' the reforms (PIB)
actually started in April 2000. In terms of
legislation, the first bill started getting into
the public space in 2008. What has been
the challenge in the industry is the
uncertainty, which makes it difficult for
investors to spend money on the long
term, plus the fact that quite a lot of the
legislation is changing in the industry as
there is a lot of obsolescence''.
While the Webinar was in progress, word
got to the Organizers that the Honorable
minister will be delayed due to an earlier
meeting that over ran. The wait for the
minister was time well spent as Mr. Amodu
engaged Mr. Olorunsola in a rich
conversation on burning topical issues in
the oil and gas industry.
Amodu: With the twin head winds of low oil
price and COVID-19 Pandemic on the oil
and gas sector. What policy direction is
the Minister likely to take?
Olorunsola: I have been following the
Nine (9) key policy objectives of the
minister and they are quite commendable.
But I think we should be looking at fiscal
levers that would unleash the industry
since it has been comatose.
Amodu: On palliatives for the oil & gas
industry
Olorunsola: The oil and gas industry is
very critical to the Nigeria nation. Knowing
the generosity of the industry, the industry
has made efforts to ensure that production
continues to happen so that revenue
accrues to government.
Amodu: On elements in the PIGB that
would encourage exploration
Olorunsola: I worry about oil and gas
exploration. The big players are writing
down losses in reserves. Proven volumes
are being written off from books. We need
to unlock these resources and with a
sense of urgency too. A sense of urgency
should be the mandate in the bill. A sense
of urgency is required to make sure we
monetize both the exploration and
development space.
Amodu: On the 10 dollar per barrel
production cost
Olorunsola: The NNPC has given a clear
mandate. But we require a policy that will
attract investments. Unfortunately, the
kind of revenue to unlock these big-ticket
investments are not resident in the
country. For this to happen the industry
must be competitive. Legislation that
gives teeth to the policy is also required. If
we have a handshake between policy and
legislation, we will have a perfect fit.
Amodu: On gas policies going forward
Olorunsola: The fact that the minister has
declared this year the year of gas,
optically is a big thing and we are seeing
action around it, but the really big thing is
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