Executive Secretary, Petroleum Technology Development Fund (PTDF), Dr Aliyu Gusau says the Petroleum Industry Bill (PIB) awaiting Presidential assent has no clause for value generation which is critically needed in the sector.
Gusau made this known at the 11th Annual International Conference of the Nigerian Association for Energy Economics (NAEE), on Monday in Abuja.
“Unfortunately, I have gone through all the four bills of the petroleum industry waiting to become law; I have seen fiscal and regulatory provision about the mid-stream and the downstream. But, I have not seen anything in all the four bills that incentivize value generation.
This is the challenge I must put forward because this is the key in our journey to a post-oil economy in Nigeria.’’
Gusau said the oil and gas sector had the capacity to provide everything needed in the country if the whole business model would be changed.
He said happenings in the global oil and gas landscape, such as the shale phenomenon, would certainly impact Nigeria and had brought to the fore, the need for Nigeria to begin the transition to a post-oil economy.
“What is not certain is whether we are ready for that. For me, there are great opportunities in this journey. We must seize these opportunities to commence the journey of a post-oil economy.
I still believe that oil is still central. The oil industry in Nigeria is the only sector that has the capacity to provide the foundation for that journey, but it cannot be done with the current business model that is focused essentially on the upstream.
The business of taking oil from the ground and marketing it across the globe has to stop.
The only way the oil and gas industry can provide the foundation for the journey of a post-oil economy is to move from its focus on the upstream to the mid-stream and downstream where a value is created.
“This is the area where value, wealth and jobs would be created. This is the area that would create the fertilizer, the electricity; and the petrochemicals that we require would all come into play. This should be, going forward, the norm in the Nigerian oil and gas industry.”
Also, Prof. Wumi Iledare, President NAEE said the PIB offered significant optimism to the petroleum sector.
“The passage of the PIB is certainly a worthy milestone in the oil and gas industry history in Nigeria, having unglued the omnibus petroleum industry bill of 2008 and 2012 into four parts.”
He explained that the sector would continue to await the assent of the bill to ensure effective restructuring.
The restructuring, he said, would be expected to completely revolutionalise the institutional governance, fiscal and communal structures of the oil and gas business in Nigeria.
Commenting on the political structure of the Nigerian Economy, he said the country was too dependent on hydrocarbon production for revenue generation rather than value creation.
According to him, it is a major hindrance to the nation’s economic growth and sustainable development potential.
“The consequences of this dependence are evident in the extent of its vulnerability to the global energy price and supply shocks on the economy since 2015,” he said.
The four-day event which has the theme: “New Era in Global Energy Landscape: Implications for an Emerging Economy” will come to an end on April 26.