Mallam Mele Kyari, NNPC CEO
The Nigerian National Petroleum Corporation (NNPC) has pushed for a legislative framework with clear fiscal terms to encourage investments in gas.
It said only with this will investors be encouraged to commit their capital for gas development projects.
The Group Managing Director of NNPC, Mallam Mele Kyari, made the call at a one-day public hearing on “Inclusion of Gas Terms in Production Sharing Contracts (PSCs)” organised by the House of Representatives Joint Committee on Gas Resources, Petroleum Resources (Upstream and Downstream).
According to him, a functional legislative framework that provides clear insight on how investors can recoup the capital on investment and make gains is what the Petroleum Industry Bill was all about.
He said the passage of the PIB will help resolve issues of fiscal terms in the Production Sharing Contracts (PSC).
The GMD further explained that the PSC agreements were focused mainly on crude oil production leaving the gas development component to the discretion of the parties.
According to him, this made provision in the PSC for the development of gas was very weak.
“The PSC simply says the parties can sit down and agree on a framework for monetising the gas on terms that are mutually acceptable,” he noted, stressing that a gas pricing mechanism was urgently needed to drive gas development.
He noted that the Ministry of Petroleum Resources under the leadership of the Minister of State for Petroleum Resources, Chief Timipre Sylva, was aggressively driving gas pricing policy as part of the Federal Government’s gas commercialisation initiative.
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