One of the goals for drafting the Petroleum Industry Act (PIA) signed into law in 2021 was to increase daily production of oil and gas in Nigeria to meet energy needs and export, said the Nigeria Upstream Petroleum Regulatory Commission (NUPRC).
Speaking at the ongoing 21st Nigerian Oil and Gas Conference and Exhibition, the NUPRC Chief Executive, Mr Gbenga Komolafe, disclosed that the Act specifically targets to increase oil reserves to 40 billion barrels and 220 trillion Cubit feet (TCF) of gas.
Mr Komolafe while speaking at the event tagged “Funding the Nigerian Energy Mix for Sustainable Economic Growth’’, in Abuja on Wednesday, gave a detailed explanation of the Act.
The NUPRC boss highlighted the positive results of the Act to include technical and commercial regulation empowerment, environmental remediation, decommissioning and abandonment, setting up of Host Community Development Trust (HCDT), and production allowance.
He said, “The introduction of a mandatory Decommissioning and Abandonment Fund prescribed under Section 232 and 233, adoption of Grid System for Acreages under Section 69, HCDT under Chapter three which replaced MOUs and GMOUs, was targeted at achieving operational efficiency, higher productivity, cost optimisation, cleaner and safe upstream environment.”
Also, he thanked the President and the Ninth Assembly for passing the PIA as it provided for administrative, institutional governance, attractive fiscal regimes, mechanisms for improved environment and peaceful co-existence between operators and host communities.
The Commission through Komolafe added that incentives the Act provided will allow the country to attain three million barrel per day of production target.
While speaking on “Providing Regulatory Oversight in the Petroleum Industry Act (PIA) Era”, Komolafe explained that Oil and Gas needed a legal regulatory framework that is effective enough to regulate the sector for optimum productivity and efficiency.
He added that the PIA 2021 under Chapter four and the seventh schedule, provided attractive fiscal terms for the Petroleum Industry which included Progressive royalty rates compared to pre-PIA royalty rates for all terrains.
Others, he included are Reduced Royalties (to 2.5 per cent) for gas produced and utilised locally, introduction of hydrocarbon tax and company income tax that are cumulatively lower than Petroleum Profit Tax Pre-PIA.
“Zero hydrocarbon tax for deep offshore operations, consolidated taxation on lease- and company-basis and other fiscal incentives.
“These sweeping reforms are geared toward creating additional opportunities for new investments and higher revenue for both government and investors,” Komolafe stated.