Yemisi Izuora
The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu said Nigeria wasted so much fortune from lack of planning and policy inconsistencies in the oil and gas sector.
He also regretted the wastes that had occurred in the country’s lucrative petroleum sector most of which happened through corrupt practices.
The minister who spoke at the 2017 Society of Petroleum Engineers Nigeria Annual International Conference & Exhibition (NAICE) in Lagos with the theme”Riding the Waves of Boom and Burst: Common Objectives Diverse Perspectives”, said investors preferred to invest the limited resources elsewhere in Africa countries, because of absence of laxity in fiscal policies that should have spelt out the needed incentives.
He said the oil and gas sector is significantly hit by lack of investment coupled with huge infrastructure gap that requires about $50 billion to close.
“We have not engaged the private sector sufficiently in the past, private sector infrastructure financing is now key. Again we haven’t saved enough, rather than save we steal the fund and now we are given conditions for the release of money stashed into Countries abroad. Trust index has depreciated so much that when I attend international conferences I feel ashamed because of reports and headlines of monumental stealing.
While other countries like Saudi Arabia, Qata and others are saving for future generations we are busy corruptly enriching ourselves”, he lamented.
He warned that 25-30 years is lifespan of oil and people are hurriedly moving away and investing in electric cars and renewable, saying, “We have five years to make dramatic move to take long term policy decision, Address inefficiency in the system and cut cost of production, producing oil at high cost is no longer acceptable so we are going to review all these”.
The minister also said he will ask major oil companies to relinquish acreages they consider non-prolific so that indigenous companies to help boost production.
He said that the global oil and gas sector lost about $300 billion in the last three years with Nigeria and other African countries bearing major hindrance in investment due to security and infrastructure challenges.
Kachikwu said the situation led to mass job loss apart from huge revenue loss, adding, “The situation was very challenging when it comes to losing opportunity arising from investment, For the first time in the oil sector, the decline in the oil price resulted into loss of jobs.
The Minister said the boom and bust had become the way of life in oil and gas sector, adding, “I think we have had about five circles of burst and boom over the last 35 years and each time we begin as if we did not expect it. “The boom and bust have become the nature of oil and we should not be surprised anymore.
“Over 80 per cent decline in world oil price was recorded between 2014 and 2016 with oil price falling between 25 dollars per barrel. “All the same, we have managed through the principles of OPEC to keep the price going between 45 and 50 dollars per barrel.
“For now, our expectations between the year 2017 and 2018 is to keep the price to 60 dollars per barrel,” he said.
Speaking earlier, Mr Saka Matemilola, the SPE Nigeria Council, said the mission of the conference was to disseminate information as regard to oil and gas sector.
Matemilola said petroleum sector remains the main focus in the country economy.
He said the current challenges in the oil sector provided the necessary catalyst to provide opportunities for the country.
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