Nigeria Is Rich In Resources, Poor In Policy

30 September 2020 by Rahmat Saidu

The executive chairman of the african energy chamber Mr NJ AYUK says he
believe that Nigeria’s oil and gas are key to improving the country’s future noting how mismanagement of these resources have contributed to many of the country’s struggles.

Mr Ayuk in a write up commemorating Nigeria’s 60th independence anniversary says many times during the last 60 years, Nigeria’s government had missed opportunities to channel the country’s oil and gas resources into economic growth.

The african energy chamber executive chiarman noted that he was Convinced that Nigeria could bring reliable power to more people by harnessing its natural gas resources. And, to its credit, the government had been talking in recent years about putting an end to Nigeria’s costly and wasteful natural gas flaring — more than 276 billion cubic feet of natural gas was burned off from Nigeria’s oil fields between September 2018 and September2019 alone

This year, with Nigeria’s economy dealing with the one-two punch of the COVID-19 pandemic and low oil prices, decisive government action is more critical than ever. As of late August, the economy had contracted by 6.1%, and 27% of Nigeria’s labor force was unemployed.

Mr AYUK emphasied that Nigeria’s problems are not insurmountable, stressing that , Nigeria is better positioned to start strategically capitalizing on its natural resources than ever before. And if the country can do that, it will be well on its way to a better future.

While getting Nigeria to the point where it can realize the full potential of its petroleum resources has been slow going, the country appears to be on the right track. As I write this, Nigeria’s long-awaited Petroleum Industry Bill (PIB) — intended to bring transparency and new life to the country’s oil and gas sector — is closer than ever to passage. Nigeria is working to monetize its natural gas resources, and we’re seeing great interest in the latest marginal field bidding round.

On the petroleum indusrry bill ,Mr AYUK said While there
Was no guarantee that Nigeria’s PIB will become law this year, it has reached an important milestone: President Muhammadu Buhari approved an updated version of the bill and presented it to the National Assembly Sept. 28 for their approval.

It would play a vital role in addressing the inefficiencies plaguing the Nigerian National Petroleum Corporation (NNPC), from slow approval for oil projects to budget shortfalls that hinder its ability to pursue public-private partnerships. What’s more, the bill would create a supportive environment for both IOCs and indigenous petroleum companies, help protect the environment and the interests of host communities, support economic diversification in Nigeria, and critically important, promote transparency in Nigeria’s administration of petroleum resources.

He noted that Nigeria has moved a step closer to natural gas monetization through the Department of Petroleum Resources’ creation of the Nigerian Gas Flare Commercialization Program. Proper channeling of flared gas could impact the country’s gross domestic product by up to $1 billion per year, the department estimates. It could create up to 300,000 jobs, produce 600,000 million tons of liquefied petroleum gas per year, and generate 2,5 gigawatts of power. I commend the federal government for creating this program. Next, Nigeria needs to put in place the legislation, infrastructure,and pricing regulations necessary to make commercialization possible.

Nigeria already has successful liquified natural gas (LNG) projects in place — just this year, Nigeria LNG Ltd. signed a $3 billion corporate loan to finance the construction of its seventh LNG train — and with the right policies, they can be even more beneficial.

Also working in Nigeria’s favor has been the country’s membership in OPEC. Not only has OPEC played a critical role in stabilizing global oil prices through production cuts this year, it also has been working to secure the fair value of member countries’ oil resources with the understanding that a thriving petroleum industry contributes to economic growth and improved standards of living. I believe Nigeria’s membership inthe OPEC Fund for International Development, a multilateral development finance institution that targets key projects – primarily in energy, transportation, agriculture, water, education,and health —will be beneficial as well.

It has been encouraging as well to observe the fantastic working relationship among OPEC Secretary General Mohammad Barkindo, Minister of State for Petroleum Resources Chief Timipre Sylva, and NNPC Group Managing Director Mele Kyari. In fact, Barkindo recently expressed a strong vote ofconfidence in both Nigerian officials. “I’ve known both Timipre Sylva as a friend and Mele Kyari as a colleague for a very long time,” Barkindo said last year. “I had worked with both, and I know that if they work together, they will make a good team that will provide the leadership and the corporation that the industry requires.” The cooperation and respect among these leaders can only work in Nigeria’s favor.

Nigeria’s Independence Must Be Respected

As Nigeria takes measures to revamp its petroleum industry, leaders should be prepared to stand their ground against externalforces eager to remake Nigeria’s future in the image they want for it. I’m referring to western environmental groups intent on influencing is how Nigeria, and other African countries, transition from fossil fuel production to sustainable energy sources. Many have been pressuring investors to stop supporting oil and gas projects in Africa to prevent climate change. Frankly, they need to back off.
Nigeria is celebrating 60 years of independence. This is not the time to go backward. Outsiders need to respect Nigeria’s right to control its own destiny — and to choose the path it takes to improve its future. Nigeria must be the one to map out and executive its energy transition. And it must do it on its own timetable. And Nigeria already is, by the way, beginning to embrace green technologies. With a $350 million World Bank loan, Nigeria plans to build 10,000 solar-powered mini-grids by 2023. The government also is investing in hydropower projects, including the $5.79 billion Mambilla Power Station in central Nigeria.
All of those projects can work hand in hand to contribute to Nigeria’s economic growth. No one should be pressuringNigeria to miss out on the many benefits its petroleum resources offer. And today, when the country is finally moving toward harnessing its oil and gas resources in a way that could truly benefit everyday Africans, it would be heartbreaking to see non-Africans knock Nigeria off-course.

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