Group Managing Director, Nigerian National Petroleum Corporation, Mele Kyari, has said that a legislative framework with clear fiscal terms is needed to tap the full potential of the gas resources in the nation’s deepwater acreages.
Kyari made the call at a public hearing on ‘Inclusion of Gas Terms in Production Sharing Contracts’ organised by the House of Representatives Joint Committee on Gas Resources, Petroleum Resources (Upstream and Downstream).
According to a statement on Monday, signed by NNPC Group General Manager, Group Public Affairs Division, Dr. Kennie Obateru, the GMD stressed that investors needed clarity on fiscal terms to be encouraged to commit their capital for gas development projects.
A functional legislative framework that provides a clear sight on how investors could recoup the capital on investment and make gains are spelt out in the Petroleum Industry Bill, he stressed.
He added that the passage of the PIB would help resolve issues of fiscal terms in the Production Sharing Contracts.
The GMD 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 was very weak.
“The PSC simply says the parties can sit down and agree on a framework for monetising the gas on terms that are mutually acceptable,” he noted, stressing that a gas pricing mechanism was urgently needed to drive gas development.
He also noted that the Ministry of Petroleum Resources was aggressively driving gas pricing policy as part of the Federal Government’s gas commercialisation initiative.
Speaker of the House of Representatives, Femi Gbajabiamila, was quoted as saying that the Joint Committee on Gas and Petroleum Resources was set up in November 2019 to help resolve issues hindering the efficient development and utilisation of the abundant natural resources in the country.
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