The absence of a stable fiscal environment for the petroleum industry is inhibiting growth in the upstream sector of the industry, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, has said.
This is amid the continuous agitation by civil society groups for the National Assembly to pass the Petroleum Industry Bill (PIB) without further delay.
Mr Kyari lamented that international investors in the oil and gas industry were fast losing confidence in Nigeria as a result of the absence of a petroleum industry law to guarantee a stable investment environment.
He was addressing members of the House of Representatives Committee on Petroleum Resources (Upstream) who were on an oversight visit to his office at the NNPC headquarters in Abuja on Tuesday.
Mr Kyari, who underscored the significance of foreign capital in the operations of the upstream sector of the petroleum industry, said the only way to attract it was to have stable laws and a friendly business environment that guarantees cost recovery and a decent return on investment for investors.
He said the uncertainty in the petroleum sector as a result of the long delay in the passage of the PIB has forced a number existing multi-national partners in the country into divestments from the country in the recent past, while prospective investors that could have come to Nigeria are compelled to look elsewhere due to unstable legal and fiscal terms.
The NNPC Chief said if the PIB were to have been in place, it could have enhanced the drive by the NNPC management to entrench the culture of transparency and accountability in the corporation’s operations.
The policy of transparency, accountability and performance excellence (TAPE), he said has significantly improved the corporation’s business fortunes and creditworthiness as lenders are now willing to grant credit to it to support its operations.
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