- Without Reforms, Nigeria’s Oil Reserves Won’t Increase — Experts
Worried about the state of the nation’s oil and gas industry, stakeholders under the aegis of the Nigerian Association of Petroleum Explorationists have highlighted the need for reforms in order to attract the investments needed to increase the reserve base.
The Federal Government in 2010 set the target of 40 billion barrels of crude oil reserves and a production of four million barrels per day by 2020.
According to the Department of Petroleum Resources, the nation’s oil reserves stood at 36.971 billion barrels as of the end of 2017.
“Having favourable operational policies is an important ingredient that attracts investors and creates the enabling business environment for any country,” the President, NAPE, Dr Andrew Ejayeriese, said at the ongoing annual conference and exhibition of the association in Lagos.
He noted that in Mexico, investors had successfully bid for acreage and established their presence due to the country’s energy reforms.
According to him, companies including the China National Offshore Oil Corporation, Australia’s BHP, France’s Total, America’s Chevron and ExxonMobil and Japan’s Inpex are taking advantage of the new reforms.
Ejayeriese said, “In the same token, a lot more of our indigenous and foreign firms would emerge or grow bigger with the right petroleum policy reform in place. All of us have heard of the non-assent to the Nigerian Petroleum Industry Governance Bill, a governance segment of the long-awaited Petroleum Industry Bill.
“It is important to state that the current state of the Nigerian oil and gas industry will likely remain the way it is for a long time to come unless there are reforms that will make it globally competitive and in line with current business practices, in addition to taking advantage of the advances in technology.”
The PIB, which seeks to change the organisational structure and fiscal terms governing the industry, suffered setbacks in the 6th and 7th National Assembly.
To fast-track its passage into law, the current National Assembly decided to split the bill into four parts – the PIGB, Petroleum Industry Administration Bill, Petroleum Industry Fiscal Bill and Petroleum Host Community Bill.
After its passage by both the Senate and the House of Representatives, the PIGB was transmitted to the President for assent in July to enable it to become law but President Muhammadu Buhari declined to assent to the bill.
The NAPE president added, “The dream of Nigeria increasing its reserve base will continue to remain a mirage without reforms. One thing is certain: the world will not wait for us.”
According to him, the country is faced with the task of contributing its quota to the world’s energy irrespective of the global oil price or local economy.
He said, “Research into the global energy landscape up to the year 2040 has projected that the world’s demand for power will continue to grow; electricity demand will grow twice as fast as that for transportation; fossil fuel will dominate the energy use and energy-related greenhouse emissions will rise by 14 per cent in the next 20 years.
“For us in Nigeria, crude oil will continue to remain the largest contributor to our energy demand, while other petroleum products will continue to be of significant use in the manufacture of plastics, electronics and other industries and household items.”