The Nigerian National Petroleum Corporation (NNPC) has called for a legislative framework with clear fiscal terms in order to tap the full potential of the gas resources in the nation’s deepwater acreages.
The Group Managing Director of NNPC, Mallam Mele Kyari, made the call at a one-day public hearing on “Inclusion of Gas Terms in Production Sharing Contracts (PSCs)” organised by the House of Representatives Joint Committee on Gas Resources, Petroleum Resources (Upstream and Downstream).
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In a statement from NNPC, the GMD said investors needed clarity on fiscal terms to be encouraged to commit their capital for gas development projects.
He stated that a functional legislative framework that provides a clear sight of how investors can recoup the capital on investment and make gains as captured in the Petroleum Industry Bill (PIB). He also said the bill would help resolve issues of fiscal terms in the Production Sharing Contracts (PSC) as the PSCs were mainly on crude oil production making the contract weak for gas.
“The PSC simply says the parties can sit down and agree on a framework for monetizing the gas on terms that are mutually acceptable,” stressing that a gas pricing mechanism was urgently needed to drive gas development.
Speaker of the House of Representative, Femi Gbajabiamila, said the Joint Committee on Gas and Petroleum Resources was set up in November 2019 to help resolve issues hindering the efficient development and utilization of the abundant natural resources in the country.
Chairman of the Joint Committee, Hon. Nicholas Mutu, the lawmakers met petroleum agencies to determine the current situation in the gas sector.
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