Fidelity bank card banner Emerald Energy Institute Camano banner

Experts warn against amendment of NLNG Act, say implications for Nigeria would be devastating

By News Express on 21/08/2017

Gmail icon

Views: 1,272


The Senate has been urged to consider the implications of the trade-off the country will make to amend the Nigeria LNG Act, which include foregoing $25 billion investments in LNG Train 7 and 8, loss of investor confidence in Nigeria and reputational risk for the country, as it prepares to consider the Act.

A panel session at the 2017 Association of Energy Correspondents of Nigeria (NAEC) conference held in the Eko Hotel & Suites, in Lagos last Thursday, saw an impassioned discussion by representatives of the private sector, the government and civil society, over the implications of the amendment of the NLNG Act by the House of Representatives in May.

“The first issue in this amendment is the timing. The Nigeria National Petroleum Corporation (NNPC) is currently negotiating Train 7 of the NLNG with various parties and when this started going round in the media, it put the NNPC on the defensive,” said Dolapo Oni, head of energy research at EcoBank.

“A bigger picture is that Nigeria needs to monetise its gas and the NLNG has proven to be the best vehicle to do so. Trains 7 and 8 are meant to provide at least 18,000 jobs, so the question is, what is the trade-off we are getting from here if paying the three percent annual budget to NDDC means that these investments won’t happen? Would paying (3% of NLNG budget to NDDC) have created the same amount of jobs and investments?”

Nigeria’s LNG could not kick-off after it was first proposed in 1968 because of the huge capital investment required, which Nigeria did not have. Investors wanted assurances and guarantees that they will recoup their investments. In 1990 Nigeria granted the investors a ten year pioneer status, as well as generous concessions that prohibited further taxation and levies.

But Nigeria’s lower legislative house, led by Leo Ogor, PDP, minority leader from Delta state, has amended the Act, so that NLNG pays three percent of its budget to NDDC and free Nigeria from guarantees and assurances it gave to its partners.

Leo Ogor is facing investigation by the Economic and Financial Crimes Commission (EFCC) for allegedly awarding constituency projects to his companies; failing to declare these companies in his Asset Declaration Form and payment of over N318 million into two of his companies accounts by the NDDC​ ​for undisclosed projects.

Nigeria established the Niger Delta Development Commission (NDDC) in year 2000 to cater to development in the region. The law mandated all gas producing companies to pay three percent of their annual budget to assuage environmental degradation in the Niger Delta. The contention is that some oil companies who formed the NLNG (NNPC, Shell, Total and Eni) already pay this levy to the NDDC. Between 2002 and 2016, Shell alone paid $1.2 billion to the NDDC.

Furthermore, the NLNG does not produce gas but processes gas already produced by the oil companies, otherwise meant for flaring, into a liquid form for exports.

But Simon Yakubu Arabo, PDP, member of the gas committee in the House of Representatives from Kaduna State, insist that the “NLNG, with all its pretentions, is a gas producing company and the National Assembly has a duty to bring it in conformity to the constitution.”

“Those that have been saying we should not tamper with the NLNG Act, which basically is saying this law is here forever, we cannot allow that. There is nothing like a law in perpetuity, it does not happen anywhere in the world. You cannot have an act and say no one can touch it, we are a sovereign nation and we are duty-bound to review agreements that appear to short-change our common patrimony.”

However, through the NLNG, Nigeria’s patrimony has actually grown by $15 billion in dividends paid to the government. For the past six years, NLNG has paid over $5billion in taxes and employed 2,000 Nigerians directly and another 18,000 through vendors and contractors. NLNG contributes 4% to Nigeria’s GDP.

The NDDC has made significant strides in developing the Niger Delta, providing capacity development for close to 10,000 youths across the region, constructing over 5,000 km of roads and connecting hundreds of rural communities to the national grid. But many projects have also been abandoned by the admission of Nsima Ekere, its managing director.

Arabo further said: “If we can amend the constitution of the country, what is so special about an act setting up an entity? They have had tax holidays for more than 16 years, what more are they looking for?”

However, Kudo Eresia-Eke, General Manager, External Relations, NLNG, refuted this assertion, saying that the NLNG has been paying taxes for the past six years.

Tokunbo Mumuni, executive director, Socio-Economic Rights and Accountability Project, (SERAP) asked about the impact NDDC operations on the citizens.

“Previous contributions to the NDDC where are they and what has been the impact on the people? We should not just be concerned about companies paying levies, but judicious use of the funds collected from the companies is what is most prominent.”

Victor Eromosele, a former chief financial officer of NLNG said, “Rather than squabbling over this pie, why not bake a bigger pie? What signal does this decision by legislators send to investors? It simply says, Nigeria cannot keep its word. “We are talking about ease of doing business and this amendment is certainly against the spirit,” Eromosele said.

•Text courtesy of Business Day.

 

Source News Express

Posted 21/08/2017 5:42:52 PM

 

 

CLASSIFIED ADS

 

You may also like...
American Muslims protest coup attempt in Turkey

Unpaid allowances: NASS aides beg Buhari to intervene...

NIMC harmonises identities of 30m Nigerians

Ugwuanyi earns PDP’s kudos for peace and good...

Minimum wage: NLC optimistic of payment before end...

VPI: Nigeria soon to decide on observer status,...

Panic in Enugu over rumour of impending Boko...

Ebonyi records two deaths from Lassa Fever

APC plotting to suspend notable PDP Reps —...

Woman to lead US Army’s largest command for...

Kaduna defends moves to regulate religious preaching

Anambra to plant 1 million trees in bid...

 

Latest News BREAKING: Tribunal upholds Makinde’s election as Oyo Governor Buhari critic resigns 10 days after accepting appointment in Ministry of Budget Boko Haram attacks University of Maiduguri Militants point new path to Niger Delta development Obasanjo writes South African leader over Xenophobia Gov. Umahi appoints 180 additional aides FG extends border closure indefinitely 10,000 Nigerian girls forced into prostitution in Burkina Faso – Ambassador FUOYE killings: Fayemi directs commissioner of police to commence investigation Xenophobia: FG releases states of returnees Resident doctors demand improved healthcare infrastructure in southeast Falling container kills 2, injures others in Lagos

 

Most Read NUDE PHOTO OF OMOTOLA JALADE-EKEINDE surfaces online (540,346 views) Nigerian female sex addict opens up, says ‘I like it with both men and women’ (442,859 views) Shameless Genevieve Nnaji exposes breasts in public (389,165 views) Finally named: The full list of friends of Nigerian female sex addict who prowled Facebook (326,581 views) OLUMBA OLUMBA OBU (the one who called himself God) IS DEAD (294,556 views) Igbo scholar disgraces Femi Fani-Kayode •Demolishes claims on Igbo/Yoruba history with facts and figures (253,595 views) Breaking News: POPULAR REVEREND CONVERTS TO ISLAM in Kaduna (Nigeria) (249,673 views) 10 cars more expensive than Jets (238,265 views) OBJ’s son reported dead in Lagos plane crash •Names of more victims emerge (231,415 views) My wasted years in Olumba Olumba Obu’s Evil Brotherhood (217,404 views) Lagos plane crash: Journalist releases victims’ names (195,789 views) THE FINAL DISGRACE: Igbo scholar unleashes more facts about Igbo/Yoruba history, finishes off Femi Fani-Kayode with second article (193,401 views)

 

CBN milk production

CBN banner advert

UBA Wise Savers Promo

 

Categories Advertorials (3) African Press Organisation (81) Art & Literature (102) Business & Economy (4,443) Business Verdict (80) Columnists (1,109) Complaints & Requests (96) Enterprise & Opportunities (215) Entertainment (664) Features (811) Global Business Monitor (442) ICT Monitor (63) International (3,953) Interview (203) Live Commentary (30) Love Matters (170) Maggie's Blog (410) News (51,360) Opinion (1,358) Pidgin (17) Politics (11,446) Religion (1,102) Sports (2,166) Stock Watch (39) AMA & Al Jazeera Global Update

 

 

 

 

 

 

APO Group Partner

 

 

CLASSIFIED ADS

GOCOP Accredited Member

GOCOP Accredited member

 

 

Africa Media Agency and Al Jazeera