PIB will increase offshore opportunities — Avuru

Austin Avuru, MD/CEO Seplat Petroleum Development Company Plc, says the passage of the Petroleum Industry Bill (PIB) will herald a new vista of opportunity in the offshore industry as the introduction of both “fiscal and non-fiscal enablers in the Petroleum Industry Bill could add significant value to the economics of offshore investments such that PIB only erodes between 10 -15% of the remaining value of existing and new offshore investments in Nigeria.”

Avuru made the declaration during his presentation at the IP Week, London 2014. Avuru, who spoke on the theme, “Petroleum Industry Bill: Increasing Investment Opportunities in the Offshore Nigeria”, noted that the non-passage of the PIB bill is inimical to the progress of the industry.

The PIB is supposed to help the oil industry in terms of restructuring the institutional and fiscal framework to promote transparency, efficiency, exploitation activities and maximize economic rent accruing to the government as it hopes to achieve 40 billion barrels of crude reserves and oil production of 4 MMBOPD by 2020.

The respected industry professional reeled out figures to support his assertion. According to Avuru, FDI to Nigeria dropped from $6 billion in 2009 to $2.3 billion in 2010 even though the “oil sector accounted for over 60% of FDI inflow to Nigeria.”

He also noted that signing the PIB has become an imperative because of the emergence of other oil rich countries in Africa, a situation that has affected FDI inflow to Nigeria. Putting it in perspective Avuru noted that according to UNCTAD “Between 1970 – 1990 Nigeria accounted for 30% of FDI inflow in Africa, but only 16% in 2007 due to emergence of other oil rich countries.”