- Says improved law to favour indigenous oil and gas investors underway
Chineme Okafor in Abuja
The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, has disclosed that Nigeria will make a calculated change of direction in its oil and gas business in order to focus on meeting the growing demands of countries in the African continent.
Rather than pushing further in its traditional petroleum trade destinations such as Europe and the Americas which he said their demands were thinning down, Kachikwu stated that Nigeria would now shift its focus to push to take over the African market, making sure that majority of the volumes of oil and gas demands of the continent came from her oil fields.
He stated this in his opening remarks at the sixth edition of the annual Sustainability in the Extractive Industries (SITEI) conference with the theme: â€˜building local for globalâ€™ yesterday in Abuja.
According to him, the country would work with Angola to ensure that both countries secure and satisfy oil demands from the continent.
He also explained that within the next five years, the federal government would enact laws to favour indigenous investors in the countryâ€™s oil industry to enable them compete favourably across the globe.
Kachikwu, stated that it was time for Nigeria to consider her interests first above any other interests, adding that instead of a protectionism policy, the country would adopt a policy of favouritism to protect her indigenous oil and gas operators.
â€œPetroleum – oil and gas – is important. Why is it that up till now, Nigeria hasnâ€™t been able to capture the African terrain of the market? You still look at how we award our contracts whether it be crude terms or whether is the Direct Sales Direct Purchase (DSDP) formulations or whether it be investments.
â€œHow do we ensure that the African market first is number one? How do we capture that market? One of the effort we are doing right now is to bring together the African producers. Next Monday we will be hosting a conference of the 19 African producers here,â€ he said.
Kachikwu further stated: â€œThe whole idea is to begin to put together relationship nexus that enables us to look at the African market because make no mistake about it, in the current very competitive market environment, you have got to become sectoral in terms of regional play. You are not going to capture America, Europe which is thinning out in terms of demand base. The only countries that are available are Africa and Asia.
â€œSo, how do we ensure that every drop of oil that comes into Africa first and foremost comes from Nigeria? That every drop of gas that gets transported into Africa comes first and foremost from Nigeria.
â€œThose are the things countries like ourselves and Angola need to sit down and begin to fashion because if we can do that stability of our own supplies which is going to be periled over the next few years as OPEC struggles to get its market capture will become very critical.â€
He said the government would not focus on trade protectionism, but favouritism to give indigenous players in Nigeriaâ€™s oil industry some leading edge through critical policies that are being planned.
â€œWe need to create the right fiscal incentives: whether they will be tax holidays; whether they will be duty free waivers on select areas where you need to position the local economy for purpose of external competition.
â€œLetâ€™s not make any mistake about it, for all the talk we have about free trade and free economy, every country is protective of its own, and so when Donald Trump talks about America first, it has being America first for a very long time, it just hasnâ€™t been celebrated notionally from a vivid point of view.
â€œNigeria has got to look at Nigeria first: what do we do to encourage Nigerian companies and give them the incentives to be able to compete in Africa. Not focusing on protectionism, but we need to favour local players with laws, so that they can have the grounds to play,â€ he added.
According to him: â€œGovernment policies and directives are key. They have got to be consistent and focused on international comparisons. We need to identify areas where we have competitive advantage.
â€œI will call for a five year timeframe in which we strengthen our resource and economy base, getting our companies ready for international play, to transform our local economy into an economy that is active for international play.â€
Similarly, in her remarks, convener of the conference, Bekeme Masada, explained that the conference was aligned with Nigeriaâ€™s national plans of building local capacity within her extractive sector.
Masada, noted that Nigeriaâ€™s illegal refining industry was estimated to worth about $8 billion a year, adding that such informal industry could create more jobs and lift millions of Nigerians out of poverty if properly harnessed.