Nigeria’s PIA Key To Unlocking African Oil Sector – AOW

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Nigeria is poised to using it long-awaited Petroleum Industry Act (PIA) passed into law last year to unlock vast potential in the domestic and regional energy sector, Paul Sinclair, vice president of energy and director of government relations, Africa Oil Week and Green Energy Summit Africa, has said.

Sinclair said in a statement on Monday to emphasise on the forthcoming Africa Oil Week, the global platform for stimulating deals and transactions across the African upstream.

According to him, nowhere but in Nigeria is Africa seen to be increasingly taking ownership of its own energy destiny in the private-sector space as well as developing the policy and regulatory tools that support economic self-determination.

The PIA has legislated the creation of two regulatory agencies to oversee critical parts of the industry, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), which will serve for the technical and commercial regulation of petroleum operations in the sector.

The upstream comprises resource exploration, as well as drilling and operation of crude-oil and natural-gas wells; midstream, the transportation and storage of petroleum products by pipeline, barges, tankers or trucks; while downstream mainly concerned with refining and processing of petroleum and natural gas and marketing and distributing end products to consumers.

The establishment of these regulatory bodies will provide a rich space for engagement with industry associations representing the enterprises that help to drive the industry, he said.

He noted that the Petroleum Technology Association of Nigeria (PETAN), an association of Nigerian technical oilfield service companies, is straddling the upstream, midstream and downstream sectors.

“This long-established association brings together Nigerian oil and gas entrepreneurs specifically for the exchange of ideas with major operators and policymakers, and to help develop Nigeria’s petroleum-technology industry for the benefit of Nigerians.

“Under  the leadership of chairman Nicolas Odinuwe, PETAN looks to support and enhance the involvement of indigenous companies in the Nigerian petroleum-products sector,” Sinclair said.

As an association that focuses on local content, PETAN also has a role to play in the regional context, in ensuring Nigerian businesses are equipped to win international or regional tenders for the processing of primary commodities such as crude oil and natural gas, he said.

“In the petroleum industry, there are already numerous situations where a shallow-water asset owner in Nigeria might contract a European company to service its wells, despite there being a local supplier who can do the same thing.

“The solution to overcoming this misalignment lies on ongoing industry communication, to ensure standardisation of local content so that it meets local needs, thereby boosting private-sector participation in domestic production.”

Sinclair also maintained that the establishment of Nigeria’s new regulatory bodies offers an exciting opportunity to drive this kind of intra-industry partnership, and help build an African energy industry characterised by mutual benefit, instead of unequal power relations.

“A better integrated African energy sector can be a major driver of this (AOW) vision, with, for instance, Nigerian firms partnering on Angolan energy projects and vice versa. In the long run, there is potential to establish a semi-autonomous oil and gas industry that delivers product to domestic, and external markets on its own terms.

“To take its rightful place as an energy powerhouse, Africa must continue to engage and partner across domestic and regional borders,” he added.

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