Nigeria's Oil and Gas Industry Bill Could Create $680 Billion in Revenues

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Researched by Industrial Info Resources (Sugar Land, Texas)--Nigeria's long-awaited Petroleum Industry Bill (PIB) will be ready to be signed into law in April, according to Diezani Alison-Madueke, the country's minister of petroleum. The development of the bill has been the target of industry lobbying and delaying tactics by vested interests, but according to the minister, when the bill is passed, the gas sector will become the crux of the economy going forward. "We have much more gas reserves than we have crude," she said.

"The PIB is a long and in-depth bill, a historic, critical and extensive bill encompassing the 16 hitherto existing laws with the oil and gas industry. One of the major benefits of this bill is that transparency in the oil and gas industry would be achieved. The oil and gas industry has been characterized by too much opaqueness and extreme levels of confidentiality. This bill would remove opaqueness on a scale that has never been seen. Data would be accessible for all interested individuals," Alison-Madueke said.

The federal government has said that Nigeria's annual revenues from oil and gas operations could top $680 billion per year after the bill becomes law. Current revenues stand at $282 million per day based on a combined crude and condensate production volume of 2.4 million barrels per day. This daily figure has been reached through the success of the amnesty offered to rebelling youths in the oil-rich Delta state.

The minister said that the $20 billion plans announced by the government for the construction of a petrochemical plant and fertilizer plants would be moved forward in collaboration with international oil and gas firms, and a memorandum of understanding will be signed with partners in the coming weeks. She said the petrochemical plants would mean feed for fertilizer plants, which will increase the country's agriculture and food production, as well as methanol plants that will boost industrial production. This will result in the creation of about 300,000 jobs throughout the country. More than 7,000 jobs will be created through the establishment of liquefied natural gas (LNG) plants in the states of Ogun, Ondo and Bayelsa, where more than $1 billion will be injected into the host communities.

Plans for the construction of three proposed greenfield refineries in Lagos, Kogi and Bayelsa will be fast-tracked, with the aim of eliminating petroleum products to the oil-rich country. The Nigerian Content Act will reverse the trend of spending $20 billion overseas with the retention of $10 billion annually and the creation of more than 30,000 direct jobs and training opportunities. It will also mean the establishment of three to four new pipe mills to service industry demands and the development of new dockyards and the full utilization of existing ones.

The final decision on Brass LNG's project in Bayelsa will be taken in the second quarter of this year. The construction of the Lagos petrochemical plant has been approved by the president, and this will be followed two fertilizer plants and five fertilizer-blending plants to be built at various locations. No further details on the plants and funding are currently available.

With national presidential elections two months away, the timing of the announcement to make Nigeria into a regional petrochemical hub and make the hydrocarbons industry transparent can only be good news for the incumbent politicians.

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