Uncertainty and postponement of general elections has been observed to create more investment delay in the oil and gas industry.
Report say that the delayed elections has further intensified Nigeria’s oil sector challenges coupled with existing lack of regulatory framework which is also causing constrains in upstream investment and oil production potential
A new report from IHS Inc a leading global source of critical information and insight noted that the closely fought presidential contest between incumbent President Goodluck Jonathan and main challenger, Muhammadu Buhari, is split along ethno-regional lines and the likely disputed results will threaten the state’s political legitimacy and structure.
According to the result the long-overdue oil sector reform, especially being pursued through the Petroleum Industry Bill (PIB), first proposed in 2008, is likely to be further delayed.
“Elections will be yet another disruptive force for Nigeria,” said Roderick Bruce, principal analyst at IHS Energy and one of the report’s authors. “Regardless of the election’s outcome, energy investors will continue to face fiscal and regulatory uncertainty as a result of ongoing challenges to the passage of the Petroleum Industry Bill (PIB).
That uncertainty has already constrained deepwater exploration and development,” it said.
Highlights from the IHS Energy report, entitled: Nigeria: Oil and gas sector implications of 2015 elections, indicated that the elections are likely to destabilise Nigeria’s federal structure, triggering further economic headwinds, violence, and disorder.
IHS reported that the outcome will define the future landscape for oil and gas investment in the country,” it noted.