The Nigeria Extractive Industries Transparency Initiative on Sunday welcomed the decision by both chambers of the National Assembly to pass the Petroleum Industry Governance Bill and stated that it would help reduce the country’s over N200bn oil sector revenue losses.
NEITI said the decision of the Senate and the House of Representatives to consider the bill as a priority resulting in its eventual passage was bold, courageous and progressive, despite the challenges the bill had passed through in its legislative journey for over 10 years.
The agency said its interest in the PIGB was because of the urgency and strategic importance of the new law to replace the existing archaic legislation that had aided huge revenue losses, impeded transparency, accountability and investment opportunities in the nation’s oil and gas industry.
NEITI recalled that it alerted the nation last year through a special policy brief titled, ‘The urgency of a new petroleum sector law’, that the current stagnation of investment opportunities in the petroleum industry was as a result of the absence of a new law for the sector.
“This has led to huge revenue losses to the tune of over $200bn,” the agency said in a statement issued by its spokesperson, Ogbonnaya Orji, in Abuja on Sunday.
It added that the “revenue losses were as a result of investments withheld or diverted by investors to other (more predictable) jurisdictions. The hedging by investors stems from the expectation that the old rules would no longer apply, but not knowing when the new ones would materialise.”
NEITI also stated that its reports in the sector had also disclosed that over $10.4bn and N378.7bn were lost through under-remittances, inefficiencies, theft or absence of a clear governance framework for the oil and gas industry.
It said that the total cost to the nation in 2013 alone was N1.74tn, which was largely as a result of the absence of a new law.
NEITI, however, stated that it was optimistic that with the new governance law for the industry, these huge revenue losses to the nation as a result of process lapses and outright stealing would be strictly checked if not completely eliminated.
It added that the implementation of the global Extractive Industries Transparency Initiative, which Nigeria is a key signatory to, had over the years been frustrated by the absence of a dynamic law that suit modern business modules and trends in the ever evolving oil and gas industry.