The Vice President of Nigeria, Prof. Yemi Osinbajo has blamed the National Petroleum Investment Management Services (NAPIMS), a subsidiary of the Nigerian National Petroleum Corporation (NNPC) for the long contracting cycle in the Nigerian oil and gas industry.
Speaking at the recent 55th anniversary of the Oil Producers Trade Section (OPTS) of the Lagos Chamber of Commerce and Industry (LCCI) held in Lagos recently, Osinbajo stated that NAPIMS delays approval processes in the oil and gas sector, stressing that the country should ramp up the industry reform to reduce the bureaucratic bottlenecks in the contracting processes.
Osinbajo, who delivered the keynote address on â€œNigeria: An Investor Friendly Destination,â€ said all the studies conducted on the Nigerian oil and gas industry since 1999 had agreed that the role of the government in the sector needed to be better clarified.
According to him, studies have also shown that the policy, regulatory and commercial institutions need to be given a re-focused mandate to ensure â€œbetter sector governance, transparency of regulations and operations, accountability of institutions and the removal of opaqueness around the industry.â€
Osinbajo said the federal government had gone to address some of these issues with an overhaul of sector policies.
He said the Federal Executive Council (FEC) had given approval for a new national oil and gas policy, while a new fiscal policy has been developed and currently undergoing approval processes.
The Vice President added that the country has taken deliberate steps to reform, which according to him, is the basis of these policies.
In order to ensure the sustainability of these policies, Osinbajo said the country was in the process of legislating these policy positions within the next few months.
He identified the strategic objectives of the new oil policy to include: to create a market-driven oil and gas industry; to maximum production and processing of hydrocarbons; to move away from oil as a source of income to oil as a fuel for economic growth; to minimise the environmental footprint of oil exploration and production; and to manage the balance between depleting oil resources and renewable energy.
â€œIn the gas sector, our policy interventions aspire to move the economy from oil to gas; diversify the gas supply options within Nigeria to ensure security of supply; extend penetration in the domestic market to facilitate the growth of electric power, agriculture and industries; to increase the presence of the Nigerian gas in the international market; to operate a gas industry with a clear division of roles between the public and private sectors and public sector policy making, implementation and regulation; private sector investment and operations and to end and commercialise gas flaring and address all the environmental issues that are associated with it and provide enabling environment for increased private sector participation in the gas business,â€ he explained.
Osinabajo assured that the oil and gas industry would benefit from the federal governmentâ€™s efforts to improve the ease of doing business and recalled that the World Bank recently released its latest results where Nigerian achieved an unprecedented feat of climbing 24 places to improve on her ease of doing business record.
He noted that the World bank report also showed that Nigeria was among the 10 most improved economics.
â€œWe need to ramp up our reform for the benefit of Nigerians. There is still work to be done in reducing bureaucratic bottleneck in award of contracts and generally, in obtaining approvals, in your case, from NAPIMS,â€ Osinbajo added.