Tuesday, 5th July 2022
<To guardian.ng
Breaking News:

‘How to attract investment in downstream petroleum sector’

By Roseline Okere
09 November 2016   |   4:03 am
To encourage increased local and foreign investment in Nigeria’s downstream oil and gas sector, the need for the Federal Government to prioritise the enthronement ...


To encourage increased local and foreign investment in Nigeria’s downstream oil and gas sector, the need for the Federal Government to prioritise the enthronement of a stable and predictable foreign exchange policy, has been emphasised.

Stakeholders in the sector who made this call at the just concluded Offshore Technology Logistics (OTL) conference in Lagos last week, want the Central Bank of Nigeria, Federal Ministry of Finance and Ministry of Petroleum Resources to urgently address the challenges of foreign exchange (forex).

At the end of the conference, operators concluded in a communiqué made available to The Guardian on Monday, that there is the need to urgently review the administration of the current ineffective foreign exchange intervention in the downstream sector in view of the timing gap between the offer of forex and the opening of Letters of Credit, which often erodes the value and usefulness of the offer.

The communique stated: “There is need for government intervention by way of policy on LPG to facilitate its growth and make it easily available and accessible.

“Full liberalisation and deregulation of the downstream oil sector, with removal of all hindrances and bottle necks are needed for the improvement of private investment and market competitiveness in the industry.”

The communiqué signed by Chair, OTL Africa Advisory Board, Reginald Stanley and Chairman, OTL, Africa Downstream, Emeka Akabogu, that it is imperative to establish and empower a strong independent regulator to oversee activities in the subsector and ensure implementation of open and transparent rules for the downstream value chain.

They said that it expedient that the Federal Government formulate policies that will best serve the public and cushion the effect militating against investment in the sector.

To minimise or eliminate oil theft, they said that security measures such as the oil and gas protection squad should be implemented as soon as possible, together with full deployment of technology and observance of international monitoring standards.

The communiqué noted that governments and private investors should be encouraged to explore and undertake shared infrastructure to ease movement of products particularly trans-regional pipelines and rail connections.

They stressed the need for government to expedite the passage of the Petroleum Industry Bill (PIB), which should cover full deregulation of the downstream sector.

The communiqué stated: “The Cabotage Act as well as the Local Content Laws need to be optimised in implementation by The Nigerian Maritime Administration and Safety Agency (NIMASA), and other regulatory bodies in the downstream sector to ensure more participation of Nigerians.

“Payment of charges in foreign currencies by indigenous operators to agencies like NIMASA, Nigeria Port Authority (NPA), Department of Petroleum Resources (DPR) and others should be stopped forthwith and the Naira prioritised as the means of exchange to maximize the value to ship owners and improve competitiveness at the ports.

“Financial institutions should be encouraged to develop special lending arrangements that will allow players in the downstream sector access funds at single digit interest rate to facilitate and sustain growth.

“To streamline policy interventions, inter-agency collaboration between key branches of Government is strongly advocated and Government should identify supervisory mechanisms to harmonise policy engagements.”

“Government should urgently adopt a policy of low sulphur fuel specifications Afri-4&5 to protect the health of our people and the environment.

“Government needs to reduce the duty payable on the acquisition of vessels by indigenous operators to make them competitive with their foreign counter-parts”.