Mele Kyari to outline benefits of Nigeria’s PIA at African Energy Week
Nigeria has made significant progress to reform its oil and gas industry in 2021, with progressive legislature being passed into law that not only restructures the domestic sector but provides a more attractive investment destination for international players. Notably, with the passing of the Petroleum Industry Act (PIA), the Nigerian government has positioned the country as Africa’s top energy market. At African Energy Week (AEW) 2021 in Cape Town, the benefits of the PIA will be outlined by Mele Kyari, Group Managing Director of the Nigerian National Petroleum Corporation (NNPC).
The PIA comprises a complete overhaul of the administrative, regulatory and fiscal regime in Nigeria’s energy sector, restructuring key petroleum institutions in order to streamline processes and drive the country’s oil and gas industry expansion. As the country faces challenges of declining oil production from mature fields, coupled with the reduced capital expenditure climate brought about by the COVID-19 pandemic, the PIA aims to enhance the sector’s attractiveness for foreign investment, ensuring a market-driven regulatory environment that will accelerate the country’s industry developments.
Notable regulatory reforms implemented through the PIA include the creation of a new upstream regulator – the Commission – which will replace the Department of Petroleum Resources; the creation of a new Nigerian midstream and downstream petroleum regulatory authority; and the complete overhaul of the NNPC – to be replaced by the NNPC Limited which will operate on a commercial basis without government funding. Accordingly, Nigeria has placed transparency at the centre of its reforms. Additionally, fiscal reforms include the reduction in the taxation and royalty-take of new/converted licenses from the prior regime; and the introduction of a hydrocarbon tax – to replace the existing petroleum profits tax. By incentivising investment, the government is focused on accelerating development across the entire energy sector value chain.