Sequel to the NGA Multilogues I, the OPTS Chairman, Mike Sangster was invited by the NGA as a distinguished speaker to the NGA 2020-2021 Industry Multilogues II business forum. The virtual Multilogues themed “Powering forward – Enabling Nigeria’s industrialization via Gas” held over 2 days, on the 25th and 26th of February, 2021. The OPTS Chairman was ably represented by the Vice-Chair of the OPTS Gas Subcommittee Nathaniel Oyatogun of Seplat. OPTS in its position paper presented at the session, recommended the following:
- The transition to market-led gas pricing, with a full Willing Buyer Willing Seller regime in the coming 2-3 years to remove uncertainties and barriers to investment, encourage competition and attract much needed foreign direct investment into the country.
- The Domestic Gas Supply Obligation (DGSO) arrangement should also be capped at current multi-year levels and discontinued after 2022, the end date to the current multi-year allocations.
- The three-tier sectoral demand segments of power, gas-based industries and commercial be maintained, and that the domestic gas pricing framework not be linked to Export Parity Price (EPP).
- Deepwater provisions in the PIB should allow for full royalty relief during the first five years of production and the removal of Hydrocarbon Tax (HT) to ensure a reasonable rate of return on Deepwater oil and gas projects.
- New Deepwater non-associated gas projects will require lower royalty rates at 1% to unlock production. Contractor’s entitlement to PSC Gas should be integrated into the PIB.
- Investors should be assured that prior investments are protected and allowed to run their full course as this sends a strong positive signal to the global investment community.