Chineme Okafor in Abuja
Nigeria may save more than $5 billion annually if the country deregulates its downstream petroleum sector, the immediate past president of the Nigerian Association of Energy Economists (NAEE), Prof. Wumi Iledare, has disclosed.
Speaking recently at a workshop in Lagos organised by the Nigeria Natural Resource Charter (NNRC) on the Petroleum Industry Governance Bill (PIGB), which is yet to be signed into law by President Muhammadu Buhari, Iledare, equally stated that a reformed Nigerian oil industry could result to her crude oil reserve rising to 40 billion barrels, in addition to daily oil production hitting four million barrels (mb).
He explained that gas supply for power generation could also go up to eight billion cubic feet per day (bcf); gas supply to industries and other allied industries up to 3bcf; while the country’s production and supply of Liquefied Natural Gas (LNG) could also hit 40 million metric tonnes per annum (mtpa), if the industry is restructured to admit efficiency.
Furthermore, Iledare, noted that using the PIGB to reform the country’s oil industry would see to it locally refining 1.2mbd of oil for both domestic consumption and export of refined petroleum products, in addition to zero gas flare achieved.
For years, Nigeria’s oil industry has reportedly underperformed on the back of the failure of government to reform its operations in tandem with current realities in the global oil industry. This, according to experts have resulted in loss of value. More so, the PIGB legislated on by the eight national assembly has been overlooked by Buhari, citing a couple of infractions in the bill.
“Petroleum industry restructuring and sector reform across the value chain is long overdue to halt inefficiency, ineffectiveness and inequity,” said Iledare, who maintained that the aspiration of the federal government has being for Nigeria to be among the top 20 economies of the world by 2020.
This aspiration, he noted requires that the country’s economy grows by 10 or 12 per cent annually, and largely dependent on access to affordable, secure and clean energy – oil, gas, and power.
He however said: “Nigeria has the potential to become a highly prosperous economic power with its large human and natural resources but for poor institutional and governance structure; ineffective federal character doctrine; insecurity of assets; poverty of the mind and elite capture phenomenon; inadequate connectivity or linkage with non-oil sector of the economy.”
“Nigeria’s economy is currently highly dependent on the capital intensive oil and gas sector but accounting for less than 15 per cent of its GDP over the last decade, reported as the lowest amongst OPEC countries.
“Petroleum accounts for over 80 per cent of foreign exchange earnings, 98.8 per cent of total exports, and about 70 per cent of federally collected revenues.
“Though Nigeria is a major oil exporter, it imports nearly all of its refined products,” Iledare explained.
Speaking on the need for Buhari to sign the PIGB into law after the National Assembly had reviewed and corrected sections of it he found wanting, Iledare said: “The PIGB has set out the foundations that will ensure optimum management (perform and drive growth) of the Nigeria’s petroleum resources.”