Five years after the Petroleum Industry Act (PIA) was introduced to bring greater certainty to Nigeria’s oil and gas industry, stakeholders say the country is yet to fully turn the reforms into higher crude production, stronger investment and improved energy security. While the 2021 law addressed several regulatory concerns and helped restore investor confidence, industry experts argue that Nigeria’s oil output remains constrained by weak capital deployment, infrastructure gaps, security challenges and slow implementation.
Speaking at the PENGASSAN Energy and Labour Summit in Abuja, union member Solomon Orieji said the PIA came at a crucial time for Nigeria’s deepwater industry, particularly as major production-sharing contracts were approaching expiration. He noted that five key deepwater assets responsible for about 80 per cent of the country’s deepwater production were developed under agreements signed in 1993. The PIA helped create a clearer framework for renewing and renegotiating those contracts, reducing uncertainty that could have discouraged fresh investment.
However, stakeholders warned that regulatory certainty alone cannot increase production. Dr Mohammed Malah said the PIA had delivered important institutional reforms, including the restructuring of the Nigerian National Petroleum Corporation into a commercial entity, clearer separation of industry functions and greater recognition of host communities. But he stressed that “the law itself does not produce a barrel,” arguing that investment, technology, infrastructure, skilled manpower and effective implementation must work together before Nigerians can see a meaningful rise in oil production and economic value.
There are nevertheless signs that the reforms have attracted investment, particularly in Nigeria’s gas and midstream sectors. Okechukwu Nwankwo said more than 20 regulations had been issued under the PIA, while several investment decisions and gas projects, including Indorama Train 3 Plant, Odum Energy, Ovade GPP, AGPCL and SIGP, have emerged with a combined processing capacity of about 810 million standard cubic feet. He also disclosed that the Midstream and Downstream Gas Infrastructure Fund had invested more than N570 billion and helped catalyse over N2 trillion in additional investment.
With Nigeria still seeking to raise production and strengthen its energy position, stakeholders say the next phase of PIA implementation must focus less on announcements and more on measurable results. They called for stronger market structures, improved infrastructure, transparent licensing, reliable feedstock supply, appropriate pricing, open access and strategic petroleum stocks. Malah also proposed a public PIA implementation scorecard that would track investment commitments, actual spending, approvals, licences and production outcomes. For Nigeria, the real test of the PIA may therefore no longer be whether it changed the rules, but whether those rules can finally deliver more barrels, more gas and greater economic value.
source: The Guardian
