How Nigeria Can Attract Fresh Investments In Gas Sector- NNPC GMD
The Group Managing Director, Nigerian National Petroleum Corporation Mele Kyari has said that Nigeria requires a legislative framework with clear fiscal terms to drive the needed growth in the gas sector.
Kyari disclosed this at a one-day public hearing on “Inclusion of Gas Terms in Production Sharing Contracts” organized by the House of Representatives Joint Committee on Gas Resources, Petroleum Resources (Upstream and Downstream) on Monday.
According to the GMD, the need for a clear fiscal term cannot be overemphasized, as it helps to attract investors and encourages them to commit their capital for gas development projects.
He said, “A functional legislative framework that provides a clear sight on how investors can recoup the capital on investment and make gains is what the Petroleum Industry Bill was all about.
“The passage of the Bill would help resolve issues of fiscal terms in the Production Sharing Contracts.”
The GMD speaking further, explained that the PSC agreements were focused mainly on crude oil production leaving the gas development component to the discretion of the parties thus making the provision in PSC for development of gas very weak.
“The PSC simply says the parties can sit down and agree on a framework for monetizing the gas on terms that are mutually acceptable,” he noted,
He explained that the Ministry of Petroleum Resources under the leadership of the Minister of State for Petroleum Resources, Chief Timipre Sylva, was aggressively driving gas pricing policy.
This, he stated, is part of the Federal Government’s gas commercialization initiative.
Kyari said that a gas pricing mechanism was urgently needed to drive gas development.