NNPC Fears Oil Sector Under Severe Pressure Except Proactive Economic Diversification Occurs

Yemisi Izuora 

The group managing director, GMD, of the Nigerian National Petroleum Corporation, NNPC,  Maikanti Baru says over dependence on the country’s oil and gas industry is putting pressure on the industry and said that such reliance was a major factor that led to the recent recession experience.

Baru, in his opening remarks at the 2018, Nigerian Annual International Conference and Exhibition, NAICE,  hosted by the Society of Petroleum Engineers,  SPE,  Nigeria Council,  observed that over the past five decades,  Nigeria had depended on revenue generated from the industry without making conscious efforts to develop other sectors that would have served as buffer.

This obvious lack of proactive action unfortunately exposed the country to economic shock occasioned by the global economic crises that culminated into the recession experience recently.

The GMD,  said the theme of the conference, “Diversification of the Nigerian Economy- The oil and gas industry as an Enabler” is in line with the present administration thought and vision which is giving priorities to energizing the national economy through robust sectorial development.

Baru said with oil reserves of about 37 billion barrels and 199 trillion cubic feet of gas reserves, Nigeria is well positioned to generate resources that will support the overall aspirations of government to fund and accelerate development of other critical sectors.

According to him, once this is achieved Nigeria should be self sufficient in providing general services, agriculture and manufacturing among others. 

He feared that the country’s fiscal and monetary policies which hinges on oil revenue may be jeopardised if there is no deliberate measures to fast track development of other sectors and may ultimately lead to destruction of the oil and gas industry.

Also in his remarks, Speaker of the House of Representatives, Yakubu Dogara said the country need to pursue and develop enabling environment that will promote transparency in the sector, adding that the Legislature has given tacit support to ensure that the industry is run in a more transparent way. 

Dogara who was represented by Hon. Sejus Ogun said the House has demonstrated the support through accelerated passage of the Petroleum Industry Governance Bill,  PIGB,  now waiting for presidential accent.

He also assured that the remaining three other Bills would received the desired attention as the Legislature is concerned and willing to provide the enabling investment climate to drive the industry.

Speaking in a similar way,  the minister of state for petroleum resources, Ibe Kachikwu said the industry requires robust legislation that will help in the ongoing transformation exercise embarked upon by government.

Kachikwu who was represented by Mr.  Johnson Awoyemi said the federal executive council, FEC has demonstrated commitment towards strengthening the industry in accordance with the vision of the present administration by graciously giving approval to the oil and gas policies. 

Kachikwu urged the conference to come up with suggestions and strategies that will engender transparency, reduce contracting cycle issues, bring about cost reductions in the Industry and accelerate infrastructure development across the value chain.

Earlier, chairman SPE Nigeria Council,  Chikezie Nwosu called for immediate action in leveraging on the opportunities presented by the industry to develop other sectors.

Nwosu regretted that the country has moved slowly in the quest to take advantage of the sector to fully transform the economy, adding that the sector is a major enabler for the transformation agenda of government.

He said government should not lose focus of opportunities embedded in the National Gas Policy as gas is critical to support such agenda. 

He said the geology of the country shows that the country can raise current gas reserves of about 180 trillion cubic feet to about 600 trillion cubic feet but warned that more delay in developing the sector other resources could make it irrelevant. 

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