Transparency, reforms to attract $100b investment
This was contained in a document released by the Federal Ministry of Petroleum Resources recently, tagged: “Short and Medium Term Priories” in the Nigeria’s oil industry.
According to the document obtained from the ministry’s website, the objective is to create a commercially oriented and profit driven business environment that encourages increased private sector investment.
The document signed by the Minister of State, Petroleum Resources, Dr. Ibe Kachikwu, noted that open up the industry to full private sector participation and reduce government dominance and monopoly in the downstream and midstream sectors through more deregulated policies, concessions, privatizations and business growth and expansion schemes.
It added that this would provide significant knowledge and expertise about Africa’s energy sector, and how to be well positioned to drive future potential in the continent.
Dwelling on the country’s downstream sector, it stated: “Nigeria’s downstream petroleum sector is undergoing major reforms and our proclivity for being an exporter of primary energy source and an importer of value added related energy products is being addressed.
“So far, we have taken the giant stride of eliminating petroleum products subsidies and liberalising the market.“Completing the rehabilitation and enhancing capacity utilisation of our local refineries in addition to setting up of co-located refineries and modular refineries to guarantee effective supply and distribution of products across the country and African sub-region is a key focus area of the current administration.
“This is aimed at transiting Nigeria from being a massive importer of Petroleum Products to a net exporter of petroleum products and value added Petrochemicals to diversify our export base and enhance import substitution, GDP growth and employment generation”.
On the efforts towards security of oil facilities in the Niger Delta, it noted that the recent upsurge in militancy and militant attacks on oil and gas installations has led to oil and gas production losses due to the shutdown of affected critical facilities such as pipelines and flow stations.
To support the Government’s efforts in tackling these challenges, it said that there is a need for strong collaboration between relevant government agencies, the Ministry of Petroleum Resources, and oil producing companies in deploying resources and an appropriate strategy to achieve the desired impact on assets, the people, the environment and security in the region.
It explained: “Nigeria’s Niger Delta is made up of nine (9) States – Abia, Akwa Ibom, Bayelsa, Cross River, Delta, Edo, Imo, Ondo, and Rivers. Covering 112,110 sq. km expanse of land, it constitutes one-quarter of the total number of federating blocks in the Nation, and is the largest wetland in the world after the Pantanal in South America and the Mississippi in North America.
“About 42 oil producing companies operate in the Niger Delta with about 159 oil fields, 275 flow stations, 1,481 oil wells, and more than 7,000 km of crude, products and gas pipelines & flowlines. Human development indicators paint a dreary picture for the region given that its human development index (HDI) is lower than that of other oil and gas regions (Saudi Arabia, Venezuela and Indonesia).
It noted that transparency in Nigeria’s oil and gas industry has always been at the center stage of public discourse, given that oil and gas is the mainstay of our economy in terms of export and foreign exchange earnings. “One of the key ongoing reforms for the industry is improvement in transparency and efficiency within the industry”.
According to the report, this will provide investors with fiscal clarity and the balance of objectives between risk and reward, help the government with clarity in its revenue sources and provide the communities an equitable distribution of revenue sources to remove obstacles to safe and efficient operation.