Experts weigh regulation, policy, financing for energy sector development
Experts in the legal profession and energy sector have stressed the need for favourable laws and policies, financing and regulation of the energy sector.
They noted that these factors along with private, public sector collaboration and technology would position the energy sector in Nigeria for exploits and national development.
This was made known at the fourth Lawyers in Oil and Gas (LOGN) conference and Industry Awards titled, “Nigeria’s Oil and Gas Future: Law, Policy and Regulation.”
Speaking on Nigeria local content policy, consultant, Energy Engineering, Wisdom Enang, noted that since the signing of the Nigerian Oil and Gas Industry Content Development (NOGICD) 2010 law, there has been a systematic but gradual improvement in local content in the industry with Nigerians developing competence in jobs that were the exclusive preserve of expatriates.
He added that it has led to the retention of a large chunk of the industry expenditure in-country, employment generation and growth of Gross Domestic Products (GDP).
Enang stated that the Local Content Act is a tool that could assist the government to upgrade her manpower capacity, thereby creating benefits for the government, private sector and economy.
“For the government to achieve the local content target, it must adopt initiatives to create enabling environment for increased involvement of Nigerians in the oil and gas industry.
“Such reforms as the Petroleum Industry Bill (PIB) and other relevant legislations, will go a along way in increasing the opportunities and environment that will integrate local players in the oil and gas sector,” he said.
According to Enang, to achieve full implementation, the government has to embark on series of market-oriented policy reforms to integrate the economy towards achieving competitive economic growth and globalisation, through the use of private sector led socio-economic initiatives.
He, however, noted that underdeveloped capital market, issues of non-compliance, tedious prequalification and tender processes for awarding contracts and lack of infrastructure are challenges to local content development in Nigeria.
He added that achieving the goals of the Act, would ensure domestication of petroleum refining, domiciliation of manufacturing of industry requirements, extraction of value from gas and positioning Nigerian operators and service providers at the forefront of play in the upstream, midstream and downstream sectors of the industry.
Partner, Olaniwun Ajayi LP, Tominiyi Owolabi, speaking on financing for large gas projects, said that Nigeria’s financial institutions don’t have the liquidity to support the foreign exchange required for such transactions.
He explained that though Nigeria has the largest gas reserve in the continent and eight largest in the world, developing the gas sector requires significant funding on all activities involved in the gas value chain, from processing to transportation and storage, among others.
“Major issues involved in sourcing for funds are cost of financing itself. Project sponsors should make use of a bankable structure for record purposes. We also need to look into offshore funding,” he suggested.
Head, legal & regulations of the Ikeja Electric, Babatunde Osadare, representing Managing Director, Folake Soetan, while speaking on the viability of metering, explained that in electricity, the measuring tool to gauge customer’s consumption for the purpose of billing is missing.
According to him, very few customers can access proper billing system.
He said the feasibility of the metering programme is tied to funding, implementation and structure, adding that laws that serve as a regulation in the energy space and projects should be easily implemented.