FG sets up committee on implementation of autogas programme

The Federal Government, on Monday, disclosed that it has set up a Task Force on the implementation of the Autogas programme, just as it urged National Assembly to ensure passage of the Petroleum Industry Bill (PIB) by April 2021.

Minister of State for Petroleum Resources, Timipre Sylva, gave the charge in Abuja, at the public hearing on the ‘Inclusion of gas terms in production sharing contracts,’ held at the instance of the joint House Committee on Gas Resources, Petroleum Resources (Upstream) and Petroleum Resources (Downstream).

He said: “In terms of gas utilisation in the country, we are all aware that in December last year, we rolled out the Autogas initiative which we are actually pushing forward.

“Yesterday we had a discussion around it; we had a meeting and during this week, a Task Force is expected to sit on it and come up with details of how we are going to implement the Autogas Programme so that Nigerians will begin to use gas for their cars.

“Also in terms of domestic or household gas usage, we are also pushing for penetration because we feel that a lot of usages now is in the cities. So, we want to push for rural people to also begin to utilise gas for cooking. The general idea is to ensure that gas is pushed to the fore in Nigeria.

“All these that we have discussed will not make sense if the pricing regime for gas is not appropriate. That was why last year, I inaugurated a committee to look at the appropriate pricing for gas so that we (can) have gas that is affordable and accessible to Nigerians. This Committee has met, it is chaired by the COO Gas and co-chaired by the DPR, and they have worked tirelessly.

“Tomorrow by coincidence, they are coming to present their report to me, which will be discussed at the leadership level in the oil industry before we make it public. But in general, I am just saying that we in the oil industry are on the same page with the National Assembly in the push for gas in Nigeria.

“That is why we are very hopeful that the deliberations here will make a lot of sense to Nigerians and will produce major decisions that will form part of the PIB already before you, and hopefully, we are still looking forward to your promise that the PIB will be passed in April.

He assured that NNPC has engaged in a lot of discussions around the PSCs and most of those discussions are purely commercial, and they are making good progress.

“But of course, knowing that the PIB is in sight and the National Assembly invited us still for this, we felt that there is a lot of wisdom also, and that is why we have come.

“I believe that the PIB will be able to cure most of those issues that will come up for discussion today. As I said, the issues around gas terms were not captured because before now, most of our activity in the oil industry was about oil and not about gas.

“Today, we have come to see is a very essential resource; it is a resource that can drive the growth of this country and the economy. That is why you can see this new push for gas. And I can assure you that because of the push that we are championing in the oil industry, gas terms will be fully captured in the PIB when it is passed.

In his presentation, Group Managing Director of Nigerian National Petroleum Corporation (NNPC), Mele Kyari, affirmed that “PSC was designed around oil, that’s why the provision in the PSC for development of the gas was very weak. It simply says that both parties can sit down and agree on the framework for monetizing the gas on the terms that are mutually acceptable and when the contractor, that’s the IOC chooses not to participate in the process, NNPC can take over.

“Obviously as exploration and production activities took place, there were substantial important gas discoveries were made and non-associated gas discoveries were made and obviously the PSC didn’t address how to monetize those. The focus was clearly on oil. The solution to this is getting a certain framework right.”

In his keynote address, the Speaker, Hon Femi Gbajabiamila, underscored the urgent need for Nigeria to unlock the huge potential of natural gas to create millions of jobs, bring about industrialisation as well as revenue generation.

Hon Gbajabiamila who reiterated the 9th Assembly’s resolve to correct the age-long anomalies in the subsector observed that: “For too long, Nigeria’s natural gas resources have existed almost as an after-thought both as a matter of policymaking and as a focus of investment and exploration.

“Given the potential of natural gas for industrialisation, job creation and revenue generation for the government, this is a significant error that ought now to be corrected with all urgency.

“It falls to this Joint Committee of the House of Representatives to articulate the way forward and to do so, taking into account the concerns of all the stakeholders and the expectations of the Nigerian people.

“The public hearing we have gathered for today is an important part of the Joint Committee’s assignment. It is also an opportunity for stakeholders from across the oil and gas sector and the country to present information, and contribute ideas that will help the Joint Committee arrive at the proper conclusions and propose effective solutions,” he said.

Speaking earlier, Chairman, House Committee on Gas Resources, Hon Nicholas Mutu, explained that the public hearing provides an opportunity to offer practical suggestions for a structured bouquet of incentives that would attract investors to the sector and provide access to finance and profit-sharing.

He said: “Nigeria’s enormous gas reserves demand a robust public policy to drive gas development and boost the Nigerian economy, create jobs, stimulate incomes for gas value-chain resources and earn revenue for the government.”

According to him, the House urged the Executive Arm of Government to review the contract terms in the Production Sharing Contract (PSC) with a view to accommodating gas terms’ including Gas Development Agreements, Cost recovery, Profit sharing, among others.

The Joint Committee was also mandated to liaise with all the contracting parties to the PSC – the Department of Petroleum Resources (DPR), the Nigerian National Petroleum Corporation (NNPC) and all other relevant stakeholders – to determine the current situation in the gas sector and create ways to attract investments and set out terms that will grow the economy with special reference to a legal backing to the pricing mechanism and provide an amendment to the Production Sharing Contract Act for further legislative action.

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FG sets up committee on implementation of autogas programme

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FG sets up committee on implementation of autogas programme