The Managing Director of Nigeria Liquefied Natural Gas, NLNG Mr. Babs Omotowa says the current move â€Žby Nigeria legislator to amend the NLNG act will make it difficult to attract and retained foreign investment to the company and other sectors of the economy.
Omotowa stated this at a public hearing called by the Federal House of Representatives Committee on Gas Resources in Abuja.
The NLNG Chief Executive said that the current amendment effort is most unusual as it attempts to enforce the payment of a levy from which an entity is expressly exempted by a valid and subsisting legislation in which the Federal Government of Nigeria gave unequivocal undertakings and declarations that induced significant investments.
â€œAs far as we are aware, this is the first time in the history of legislative practice in Nigeria that a proposal is being made to amend a law for the sole purpose of imposing a levy on a company for the benefit of an agency of government.â€œWe urge the Honourable Committee not to lend itself to the establishment of an unjust precedent. To do otherwise would be to encourage other agencies of government who fail to make their case in judicial proceedings in court, to resort to legislative engineering to achieve what they failed to obtain in court,â€ he said.
He stated that NLNG needs to be in the position to continue to support the Niger Delta region through being a successful Nigerian company, bringing value to the Delta and the nation in general, but that this would only be possible if the promises made to investors are not broken by amending the NLNG Act, which would certainly portray the country as one that does not honour agreements.
He emphasised that keeping agreements entered into with investors was crucial to retaining and attracting foreign investment into NLNG, as well as other sectors of the economy in line with the drive of the current administration.
He said, â€œThe intervention of NLNG, more than any other single factor, has led to the progressive decline in Nigeriaâ€™s gas flaring profile over the years, from well over 65 percent in the 1990s, to less than 20 percent today. Therefore, aside from the fact that the company is earning revenue for the Federal Government and its other shareholders, it is cleaning up the Niger Delta environment in the process.â€
He added that â€œit goes without saying that the NLNG Act has been pivotal to the commencement of the project in the first place, and for the huge success the company has represented for Nigeria, with the country reaping over $33 billion from its initial investment of $2.5billion. The Act enabled the company to grow from its original 2-Trains to 6-Trains, creating an asset base of $19 billion, 49 percent of which the Federal Government owns.â€
He clarified that â€œIncentives which have been granted to NLNG are not peculiar to Nigeria. They were granted to encourage investments in gas utilisation to reduce flaring which had become a major problem for the country. Examples of similar incentive initiatives abound in Angola (12 years), Oman, Malaysia, Qatar and Trinidad (up to 10 years). Other more generous incentive schemes also exist in Nigeria, in the Free Trade Zones.â€
â€ŽHe also restated the companyâ€™s commitment to the development of the Niger-Delta and willingness to partner with government agencies, including the Niger Delta Development Commission (NDDC), to develop the region.
Babs Omotowa said this was why NLNG is easily one of the biggest promoters of Corporate Social Responsibility in the area, supporting education, infrastructure development, and entrepreneurship.
â€œAs evidence of our commitment to the development of the Niger Delta, NLNG has spent $177 million in the areas of infrastructure, education etc in the region.
â€œSo it is not an issue of reluctance to support Niger Delta, but one of ensuring we work within the confines of the law and honour agreements and promises to maintain the valued reputation of our country in international business,â€ he said.
-Â Â Â Â Â Â Â Â Â Kunle Kalejaye, Sweetcrude Reports