In the wake of the downturn in global oil prices and the consequent socio-economic effects on oil dependent economies, the Nigerian government has been urged to encourage further participation of indigenous operators in the oil and gas industry as this also drives the Nigerian content agenda.
This call was made by Juan Amechee, the Special Adviser to the Executive Director of the Nigerian Maritime Administration and Safety Agency (NIMASA), at the recent 2014 yearly dinner of the Nigerian Society of Engineers (NSE).
“Indigenous players will not only boost production, they can also provide the much-needed gas to boost power generation. For a nation that wants to develop its economy, it must pay more attention to the activities of indigenous oil producers by providing them with enabling environment to operate. The role of indigenous producers cannot be overemphasized in the nation’s development,” he said.
This was part of his lecture titled, “The untapped potentials in the oil and gas sector in Nigeria and the local content policy implementation – the way forward”, the central thrust of which suggests that there are untapped potential that indigenous companies can exploit to boost the country’s production.
“The Gulf of Guinea is not only rich in oil reserves but has significant gas reserves. Currently, the gas reserves, which represent some 3 percent of the world’s proven reserve, remain largely untapped. The only significant exporter of gas is the Bonny Island LNG project,” he added.
“Gas remains a hindrance to our economic development, yet we have it in abundance. Efficient utilization of our gas resources is important if we want to create employment, fix the economy, send our children to school and generally make things work.” he emphasised.
According to him, the problems facing independent producers border around inadequate and old infrastructure, sketchy community/stakeholder relationships and expectations, and new models. Quick solutions will be those that boost production capacities of such indigenous producers by facilitating a phased infrastructure upgrade, installing a terrain based asset centralized management structure and developing strong relationships with stakeholders.
Participation by foreign investors is still important and the necessary policies that will make the petroleum landscape attractive are desirable. “Greater encouragement in form of fiscal and stable monetary policies to reduce the inflationary trends, stable and lower interest rate regime, as well as elimination of multiple taxations are required to attract more local and foreign investors to start to participate successfully in all sectors of the nation’s petroleum industry,” he commented.
He concluded with an emphasis on the need to enact the Petroleum Industry Bill (PIB) saying it will boost growth and enhance local capacity.
By Emmanuel Iruobe