The far-reaching benefits of an accelerated passage of the oil industry reform legislation was brought to the fore by the management of the Nigerian National Petroleum Corporation, NNPC, during the weekend in Abuja at a workshop organized by the corporation in conjunction with the Federation Accounts Allocation Committee, FAAC, to improve understanding of the operations of the oil and gas industry in Nigeria.

Reeling out data and statistics to illustrate the financial outlay and cost implications of investments in the oil sector in the two-day workshop, the NNPC team led by Group Managing Director Dr. Mohammed Sanusi Barkindo informed that the PIB would increase government take significantly from Joint Ventures and Production Sharing Contracts which would lead to a haul of over N300 billion in accruals to the federation account,the bulk of which will come in form of additional revenue from Production Sharing Contracts.

The parley which had in attendance finance commissioners, accountants-general from the 36 states of the federation and members of the Revenue Mobilization and fiscal Commission was a continuation of the NNPC Stakeholders’ Forum series which was flagged off mid-January with the successful Downstream Stakeholders’ Forum in Lagos. 

Providing a breakdown of the projection, the General Manager, Planning of the National Petroleum Investment Management Services, NAPIMS (a subsidiary of the NNPC), Victor Briggs, stated that the PIB seeks to boost accruals to government coffers from the deep water offshore operations from the current level of 32 percent to 72.3 percent.

In a similar vein, he said the proposed law which is currently before the National Assembly is aimed at raising revenue to the national purse from onshore and shallow waters to 87.5 percent from the current 84 percent. ``This is what we stand to lose if the PIB is not passed,’’ Briggs said.

The Group General Manager, Corporate Planning and Strategy and Director of NNPC Transformation, Dr. Tim Okon in his presentation remarked that apart from increasing government take, the PIB would engender a fresh fiscal regime that would make it easy to calculate royalties by eliminating undue cost deductions.

``It will introduce same measurement point for royalty and taxes. The rates are reduced for small producers, meaning that government take in small fields will be minimal to take care of the heavy cost burden they bear and encourage marginal field operators. We are also going to have price sensitive royalty scheme that will capture future benefit of price increase,’’ Okon stated. 

Earlier while declaring the workshop open, the Minister of State for Finance and Chairman of FAAC, Remi Babalola, thanked the Corporation for hosting the workshop which, according to him, would inspire trust and confidence and cement the relationship between FAAC members and the NNPC.

In his keynote address, the Minister of Petroleum Resources Dr.Rilwanu Lukman stated that the workshop was designed to remove doubt and suspicion about the operations of the NNPC especially as it affects accruals to the federation account.

“Your understanding of our activities will to a large extent remove doubts, suspicions and misconceptions about the industry business and also help to build and sustain relationships for better service delivery to our stakeholders,’’ Lukman told the gathering.

On his part, Dr. Barkindo expressed hope that the workshop would serve as a forum for the establishment of a robust and constructive platform for dialogue between the Corporation and the FAAC members.

Lending support to the PIB, the Chairman House of Representative Committee on Finance, Hon. Enoh John Owan lauded the Corporation for the workshop and assured of the commitment of the House to the passage of a holistic Petroleum Industry Bill that would address concerns raised by all stakeholders in the oil and gas industry in Nigeria.