PTDF 3RD QUARTERLY LECTURE SERIES FOCUS ON NEW FISCAL STRATEGY FOR OIL AND GAS SECTOR
In continuation of its quarterly lecture series, the Petroleum Technology Development Fund (PTDF) invited Mr Timothy Okon, a well respected Nigerian oil and gas industry expert and Senior Technical Assistant to the Honorable Minister of State, Petroleum Resources who delivered the lecture titled “The New Fiscal Strategy for Oil and Gas Sector” at the PTDF House, Abuja.
The Lecture being the third in the series, is organized by the Nigerian content and industry collaboration department of the Fund. The first entitled “Nigerian Oil and gas Industry: the Quo Vadis” was delivered by Mr Egbert Imomoh, a retired and well respected Nigerian oil and gas industry expert who served as Deputy Managing Director of Shell Petroleum Development Company, (SPDC) whereas the second lecture in the series titled “Overview of Nigeria’s Gas Sector” was delivered by Dr David Ige, CEO, Gas Invest Limited, a gas advisory and consultancy firm.
Dr Tim Okon’s lecture focused on the current fiscal arrangement and policy problems in Nigeria, recent trends in fiscal developments and the eight fiscal objectives of the draft fiscal policy which includes the rent capture, fiscal neutrality, early dependable revenue, limited risk exposure, international competitiveness as well as the need for simple, accountable and transparent fiscal regime in the Nigeria’s oil and gas sector.
The lecture also explained the raging issues and flaws in the existing fiscal framework from the current royalty system, the Production Sharing Contract Structure the risk service contracts agreements. He emphasized the need for the country to have indigenous companies to be participating in the concessionairing process and also have requisite pool of competencies in Petroleum economy, thereby underlying the significance of PTDF as a government institution responsible for indigenous capacity building in the oil and gas industry.
He recommended that a system should be put in place where bid rounds are carried out more regularly to ensure that the nation’s resource base is developed to attract investors, and increased production that will ensure the PTDF have regular source of revenue to carry out its capacity building efforts in the oil and gas sector.
“What we are trying to do with the fiscal policy is that, for PTDF to get that signature bonus there has to be a sequence; well-placed programme of acreages and bidding system, so you know that, every three years, there will be bidding round in which people come to bid for block and pay off, so PTDF interest in sustaining its technology development activity would be enhanced through a reliable source of revenue. So PTDF’s interest is actually tied to what we are doing”.
The Executive Secretary, PTDF, Dr Bello Aliyu Gusau thanked Mr Timothy Okon for making out time to honour PTDF’s invitation and described him as one of the indigenous pacesetters that heralded the growth and development of fiscal policy framework for the oil and gas industry in Nigeria. Dr Gusau expressed optimism that the fiscal policy will give impetus to the amendment needed in the new fiscal legislation in the proposed petroleum industry bill.
“The significance of what we are talking about today is that if you don’t get the fiscals right, it doesn’t matter how much amount of oil you have, it is of no use. But all hope is not lost because there is a fiscal policy that is being processed by the Federal Executive Council (FEC) and the bites we are getting is that, it will inform whatever amendments it will require in the fiscal bill, if that is done, most of the work done in the last 18years will not be lost, because it is an important area because without fiscal, all you have is hydrocarbon on the ground”. He pointed
General Manager, Nigerian content and industry collaboration unit, Miss Jacqueline Guyil on her part explained that, the Fund deemed it expedient to engage in the lecture series as part of its strategic policy to relate more with active players in the industry and said it will continue to engage and tap from the experiences of industry experts in order to increase the Fund’s visibility and linkages with the oil and gas industry.
“Since the coming in of the Executive Secretary and the new strategy direction we realize that it is important for us as a Fund to have as much knowledge as we can on the industry to enable us build capacity for the industry. So, this lecture series is one of those programmes that would help to provide adequate knowledge for us on the industry and this will help us to do our work better. Also as we are trying to create linkages with the industry, we get people from the industry to come here and talk to us about what they do and vice versa, so we get to know what each other is doing and we see where we can harness all our efforts”.
She pointed also that the lecture series which is part of the learning and growth process is equally aimed at up-scaling the knowledge base of staff on current events in the oil and gas industry by bringing people with vast industry exposure to share their knowledge and experiences about the industry.