Inspite of global energy transition and federal government promise to diversify the economy, the Group Managing Director (GMD) of the Nigeria National Petroleum Corporation (NNPC), Mele Kyari, said Nigeria will continue to run a monocultural economy for the next 30 years.
Kyari said this at the two days public hearing by the joint committee on Petroleum downstream, upstream and gas declared opened by the President of the Senate, Ahmad Lawan.
He said the absence of robust legislation to guide the sector has continued to bedevil it leading the nation to lose huge revenue.
He expressed confidence that the proposed Petroleum Industry Bill (PIB) would change the narrative by boosting growth in both the upstream and downstream sectors of the oil industry.
His words “First there are a number of things happening in this industry today. The energy transition is real. Companies have the strength not just in terms of the kind of business that they do but because of the choices they have now.
“We have seen Petroleum in many unexpected quarters across the globe. Many of the consumer countries are finding oil in their country.
Thirty years ago the top three companies will be oil and gas companies. Today the topmost company is a supermarket. This is today realities that we are facing. Because this industry is transiting, people are looking for options and alternatives.
“For us as a resource-dependent country, it is important to take that benefit today. We know that in thirty years to come we will still be resource-dependent in the sense that we are a developing country, we have 70 in per cent of our population below 30 years of age.
‘We have an economy that is growing locally exponentially that is true, globally people are transiting to environments where efficiencies are high where the cost of productions are low; where legislations are flexible and where
investments can seat longer.
“This is where we should belong to Mr Chairman, as we take advantage of the local situation, we are also aware of the global community. We are not going to see other investor coming in, as long as we remain a very high-cost environment
“Passing the PIB will make our environment more competitive, compare to where we were 20 years ago.”
In his presentation at the public hearing, Chairman Oil Producers Trade Section (OPTS) on the PIB, Mike Sangster buttressed the submission of Kyari on the absence of a reliable regulatory bill as the PIB has denied the nation the required competitiveness that would have driven the sector for optimal operations.
However, he maintained that the bill in all its good intentions omitted deepwater exploration and the benefits it would offer Nigeria.
According to him, “It is our belief that through collaboration with relevant stakeholders, Nigeria can enact and implement efficient and effective legislation which will go a long way to reposition Nigeria’s Petroleum Industry to reach its full potential. The PIB presents a golden opportunity to achieve this objective.
“Nigeria has the largest hydrocarbon reserves in Africa, with significant untapped potential to drive the country’s economic and social growth.
“Nigeria is also endowed with a large population of young, talented human resources, assuring a future workforce. However, Nigeria faces ever-increasing competition for investment and, despite having the largest reserves, only $3 billion out of the 70 billion committed in Africa for projects sanctioned between 2015-2019 were attributed to Nigeria, representing a meagre 4 per cent.
“This lack of competitiveness is caused in part by the high cost of doing business in Nigeria, with overall project costs and operations costs being 69 per cent and 42 per cent higher than the global average respectively.
He further disclosed that; “Deepwater developments have contributed significantly in maintaining Nigeria’s oil production levels by offsetting the decline in the Joint Venture production.”