Deregulation, Petroleum Industry Bill Key To Economic Growth- Lukman

MINISTER OF PETROLEUM RESOURCES DR. RILWANU LUKMAN.

Lagos (THEWILL) - Nigeria’s Oil Minister, Dr. Rilwanu Lukman has said that deregulation of the oil sector and the proposed controversial Petroleum Industry Bill (PIB) will open up the sector to both domestic and international investors, thus enabling growth in the economy.

Lukman told an audience mainly made up of oil and gas executives at a Petroleum Club event tagged “Quality Dialogue With Hon. Minister Dr. Rilwanu Lukman,” in Ikoyi, Lagos, that the proposed deregulation would result in fair market pricing for petroleum products arguing that government could no longer sustain the subsidy of products, putting the value of last year’s subsidy at $680 billion. He said since petroleum is a wasting asset, government has a responsibility to preserve the resources for future generations.

Speaking on the PIB he said the bill was geared towards transparency, openness, promoting peace in the Niger Delta and will for the first time allow oil communities to acquire a stake in the sector. He maintained the argument that the Petroleum Act of 1969 and the NNPC Act of 1977 are old and could no longer be used to effectively manage the sector as it is today, blaming their deficiencies for the perennial cash call problems which has hindered the government’s ability to develop the nation’s vast gas resources, and its inability to adequately supply petroleum products to the public.

While encouraging the oil companies to ensure that peace in the region is sustained, the minister emphasized that the challenges in the sector must be addressed to enable government achieve its target of becoming one of the 20 largest economies by 2020.

Amongst the audience at the session were Chairman of the Petroleum Club, Dr. Imo Itsueli, Otunba Funso Lawal, Dr. Bode Emmanuel, Mr. Wale Tinubu of Oando, representatives of oil majors and foreign governments.

THEWILL caught up with the minister for a brief chat just before he left the venue.

THEWILL: Gas supply remains very critical for the actualization of 6000 mega watts, recently your ministry signed a transnational agreement with two countries Algeria and Chad. The issue of gas domestication is still a challenge but that of transnational supply is on the increase. Tell us about that agreement?

Minister: These are long-term agreements that will enable us to take on exporting large quantities of gas to neighbouring countries that need it and of course the Tran Saharan pipe gas line will enable us transport substantial quantities of our gas to the European market, which is one of the biggest markets we have.

THEWILL: When are we to expect the next licensing round?

Minister: We will let you know

THEWILL: We learned that you are going to sanction oil firms that fail to supply gas to PHCN to meet up the 6000-mega watts

Minister: All oil companies have been given domestic gas obligations, which they have to fulfill, and we are holding them to it. We are trying very hard to do it, but because part of the problem had been the militancy in the Niger delta, it has constrained their ability to do that but now they are trying to fulfill their obligations.

THEWILL: Will Government Back down on deregulation?

Minister: He didn’t respond, then chuckles...

THEWILL: Do you see the price of oil increasing to $130 dollars a barrel or see it increasing at all next year?

Minister: It’s a very difficult question. No one can say or can tell for certain.