The Nigerian National Petroleum Corporation, NNPC, on Tuesday canvassed strong arguments in favour of the accelerated passage of the Petroleum Industry Bill which is currently before the national assembly.

In a statement made available to journalists by the Group General Manager, Group Public Affairs of the Corporation Dr Levi Ajuonuma, the NNPC dispelled insinuations made by the outgoing Regional Executive Vice President, Shell Exploration and Production, Africa, Ann Pickard that the PIB threatens to make a bad situation worse.

Pickard had on Tuesday while delivering a paper titled: “Nigeria’s Position as a Key Player in Global Oil and Gas Markets” at the ongoing 2010 Nigeria Oil and Gas Forum, described the proposed oil industry reform legislation as “a cumbersome document that lacks insight into the very basics of our industry.”  While painting a bleak future on the oil and gas industry post-PIB, Pickard also criticized the fiscal provisions of the proposed law which she described as the “harshest in the world”.

But in a swift reaction, the NNPC described the anti- PIB comments as misplaced and totally different from the realities of modern fiscal system. 

 "What Shell wants us to do is to keep subsidizing the production of gas which they end up exporting to their home countries to guarantee their national energy security. As I speak Nigeria is still subsidizing gas for export because the cost of producing gas is recovered from oil revenue. There is no country in the world that does not get value for its natural resources. But we are getting negative value from gas in Nigeria. The big question is if Nigerians are willing to forego subsidy from petroleum products which they consume, why should Shell or any other international oil company   operating in this country expect Nigeria to keep subsidizing the gas that they export to other countries? That and many more abnormalities are what the PIB is seeking to correct," Ajuonuma intoned.

On the argument that the proposed bill will make the Nigerian Production Sharing Contract, PSC, the harshest in the world, despite the so-called high risk environment, the NNPC remarked that such statement is 360 degrees different from verifiable empirical evidence.

“Currently Nigeria has one of the lowest government take in the world for PSC which stands at 42 percent whereas the international average worldwide is 75 percent. In Angola it is 78 per cent, in Norway it is 76 percent even Ghana which has not even started is proposing about 80 percent. What is even being proposed under the PIB is 70 percent which is still less than what Angola is getting today. So how can that be harsh? For 10 years we allowed them to operate the Liquefied Natural Gas, LNG, in Bonny without paying a kobo as tax to the government because of a tax holiday all to encourage investment. Now, Nigeria wants to maximize its gas potentials to the fullest,” Ajuonuma explained.

He stated that the PIB is seeking to ensure that Nigeria and Nigerians reap the full benefits of their God given resources. ``Research shows that 80 percent out of every one US dollar invested in the Oil Industry, goes offshore. That is why PIB is talking about local content. Under PIB no oil company can import cooks and stewards from their country to work in Nigeria as expatriates’’.

On the claim by Pickard that Shell missed an opportunity to make contributions in good time for the drafting of the bill, the NNPC described the claim as untrue.

 ``Many nations like, UK, Alaska (US), Venezuela, Algeria, Russia, Alberta, Angola etc have changed fiscal system to respond to operational and economic realities without recourse to foreign interest or IOC’s. Yet it is an open secret that both Houses of the National Assembly conducted a robust public hearing to accommodate the ventilation of opinions and comments from all stakeholders’’.

The NNPC called on the National Assembly to accelerate the passage of the PIB, arguing that the country is losing additional revenue of US$ 287m in accruals to government from the three PSC’s every month the PIB is not passed.

Ajuonuma outlined the three cardinal objectives of the gas component under the proposed law as follows; to enable the creation of level playing field for all gas investors in Nigeria as against current regime, to encourage and enable the development of sustainable gas gas market in Nigeria for its economic growth and development which would ultimately ensure that government starts to earn revenue from gas.