Delay in the passage of the Petroleum Industry Bill (PIB) has made Nigeria a potential risk for oil investor, a survey carried out by London-based consultants, Control Risks has revealed.
According to the report which was released on Monday, investors in the country’s oil and gas sector will face more risks in 2013 and even if the bill is passed; its implementation will be uneven thereby adding to protracted corruption problems in the country.
The report stated that “Nigeria is also considered a high risk politically” as well as security wise. It identified Borno and Yobe states as representing “particular security risk”.
“Powerful vested interests continue to weigh over licensing and public procurement, leaving investors exposed to corruption and interference.”
The PIB has passed the first and second reading at the House of Representatives, and now awaits a third reading. When passed into law, the PIB is expected to establish the legal and regulatory framework, institutions and regulatory authorities for the Nigerian petroleum industry. It would also establish guidelines for the operation of the upstream and downstream sectors.
The passage of the PIB into law has met series of controversy as there have been various obstacles barring it over the last three years including confusion on the real nature of the bill, allegations that its control had been doctored to suit a select few. It was also said at the recent 18th edition of the Nigerian Economic Summit, last week, that the tax rates contained in the PIB where too high while the FG has countered that the tax rates are fair.
Analysts has urged the quick passage of the PIB bill as they believe that the affair had been marred with politics.
Nigeria is the largest oil producing nation in Africa and among the world’s top 10 crude oil producer. Although the nation rely heavily on the oil and gas sector for its source of foreign income earnings as it contributes more than 35 percent of the country’s GDP, Nigeria has been taking steps to diversify into other branch of the economy.