•Kyari lists parameters for sustainable growth
Chineme Okafor in Abuja and Peter Uzoho in Lagos
Nigeria’s indigenous oil and gas firms could gain huge control of the country’s oil and gas sector through the new Petroleum Industry Bill (PIB), which the federal government has started work on, the Minister of State for Petroleum Resources, Mr. Timipre Sylva, said yesterday.
The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, has also urged stakeholders in the Nigerian oil and gas industry to evolve innovative ways of repositioning the sector for sustainability, especially as the industry grapples with COVID-19 challenges.
Sylva, in his address to participants at the Society of Petroleum Engineers Nigeria Energy Industry Transformation Summit (NEITS), a copy of which was sent to THISDAY, said the government had deliberately made the participation of indigenous oil firms “an element of national strategy,” in the yet-to-be passed PIB.
For 20 years now, Nigeria has repeatedly struggled to reform its oil and gas industry with a new law to replace the 1969 law, which industry experts believe is outdated.
Experts and institutions such as the Nigeria Extractive Industries Transparency Initiative (NEITI) have equally claimed that billions of dollars’ worth of investments and returns have been lost to the country’s failure to reform the sector. They also called for a law that ensures greater indigenous participation in the sector.
But in his presentation, Sylva explained that the global COVID-19 pandemic has made indigenous participation in Nigeria’s oil industry essential.
He added that the government’s work on the PIB has also taken this into consideration.
According to him, before the enactment of Nigeria’s local content law in 2010, Nigerians were mostly spectators in the oil industry but that has changed in the last 10 years as Nigeria, in the aftermath of some legal reviews has recorded exponential growth in the number of indigenous service providers in the sector.
“With the pandemic, encouragement of local industry participation is now an element of national strategy.
“The proposed PIB will further encourage participation of Nigerians in the various oil and gas activities,” Sylva said.
He noted that the government’s declaration of 2020 as ‘Year of Gas’ is now being pursued through the National Gas Expansion Programme (NGEP) to deepen gas utilisation and make it an alternative fuel for Nigerians.
To ensure that the goals of enthroning indigenous control of the industry is achieved, Sylva advised participants to take advantage of the looming opportunity from the expected passage of the PIB.
He said: “As experts, the onus ultimately rests on you to take on the challenges and opportunities, the industry and pandemic have created. As we fast-track our race to cleaner energy through gas, cognisant of the development in other climes, this is a wake-up call for Nigeria to increase efforts and reduce her dependence on oil.
“Therefore, we must rejig our petroleum industry and energy framework in order to chart a new course. On our part, all efforts are being made to sustain the current relative peace in the Niger Delta for sustained investment.
“The proposed PIB takes care of the foregoing to put Nigeria amongst the league of investment havens. It is therefore our belief that the future is bright and attractive for the Nigerian petroleum industry.”
The minister stated that gas as an alternative to oil would be prioritised in the PIB to drive up Nigeria’s national development goals and urged indigenous firms to consider this.
“Our current transition from oil dependence to cleaner energy in gas offers a sustainable pathway to industry and national development.
“The Petroleum Industry Bill will provide a framework for sustained and increased petroleum industry activities in terms of developing gas for the domestic market and increasing oil production under competitive terms to support the goal of a stronger non-oil economy for the benefit of all Nigerians,” Sylva added.
In his address, Kyari urged stakeholders in the Nigerian oil and gas industry to evolve innovative ways of repositioning the sector for sustainability, especially as the industry is grappling with COVID-19 challenges.
In a statement issued in Abuja by NNPC’s Group General Manager, Group Public Affairs Division, Dr. Kennie Obateru, Kyari said industry players should train their eyes on a strategy that focuses on people, partnerships, profit and posterity.
He explained that the new normal era brought about by the COVID-19 pandemic has reinforced the need to boost the human capacity within the industry for the next phase and develop the capacity to attract, train and retain people in the sector.
“There must be collaboration across different dimensions; government, industry, academia, and, particularly, with the communities where we carry out our operations. The social license to operate is critical to the industry’s long-term survival.
“Also, a partnership among industry peers to chart new ways of resolving industry challenges and preparing for tomorrow cannot be overemphasised. I am delighted the SPE provides such a veritable platform,” Kyari said.
According to him, for sustainability, industry players must learn to manage cost, improve efficiency and deliver required cash-flow (margins) for reinvestment and expansion.
He stated that without creating profit today, “we wouldn’t be in a position to take advantage of the opportunities that keep us viable and ready for tomorrow”.
Another key to reposition the industry for sustainability, according to the GMD, is for industry players to always act and take decisions with posterity in mind.
“We must bequeath to the next generation a world worthy to live in. Our operations must, therefore, be carried out in a safe manner without adversely impacting the environment. As you know, most discussions around energy substitution or green economy stem from looking at the Industry as ‘dirty’ and ‘unconscionable’.
“It must be reiterated that our industry remains the bedrock of modern human existence. We must, therefore, work to create a positive view if we are to remain relevant in the long run,” he said.