Uncertainty trails impact of PIB on listed oil & gas companies
By Kayode Tokede
As President Muhammadu Buhari signed into law the Petroleum Industry Bill (PIB) into law, capital market analysts have expressed that the impact might not translates into listed Oil & gas companies on the Nigerian Exchange Limited.
The PIB seeks to ensure reforms, promote transparency and attract capital flows into the oil and gas sector.
The bill comprises five major parts, including Governance and Institutions; Administration; Host Communities Development; Petroleum Industry Framework; and Miscellaneous Provisions comprising 319 clauses and eight schedules.
One of the key recommendations of the bill is the unbundling of the NNPC and a revision of the funding mechanism.
The bourse has Seplat Petroleum, Oando Plc, Total Nigeria Plc, Conoil Plc, among others on its main board and premium board.
Speaking with our correspondent, the former president, Association of Stockbroking Houses of Nigeria (ASHON), Mr. Emeka Madubuike doubted the effectiveness of the PIB on the nation’s economy, stressing that the bill has been doctored.
In his words : “The signing of the bill does not have direct effect on listed Oil & gas companies on the nation’s capital market even though whatever affects the sector affects the economy at large.
“Even though Oando and Seplat are operating in the downstream and up stream of the Oil & gas sector, I still don’t see the impact on their growth on the Exchange.
“Mind you, Oando majorly is a downstream company on the NGX.”
Analyst at PAC Holdings, Mr. Wole Adeyeye said, “The passage of the PIB will give listed Oil & gas companies’ autonomy to decide on the price of their products.”
He, explained that PIB is meant to reduce government autonomy in the Oil & gas sector, stressing that companies in that sector take control of the price and utilized the benefits in market value.
He added that, “In a short term, these companies are likely to make more money but in a long term, we might see a lot of competition like the telecommunication sector, forcing them to setup their games.”
