Inspite of recent efforts by the Federal Government to kickstart reforms in the Nigerian petroleum sector, especially with the signing into law of the Deep Offshore and Inland Basin Production Sharing Contract Act 2004 (Amendment) Bill 2019, industry watchers say much is still left to be done if for Nigeria to create a more competitive and conducive environment for the oil and gas investment. This much is contained in a new report to be released this week in Abuja by the Nigeria Natural Resource Charter (NNRC).
NNRC, a non-profit policy institute on natural resource governance which has been monitoring developments within the oil and gas industry for close to a decade in its latest Benchmarking Exercise Report (BER) found that far more would be achieved if the government keeps to promise by passing the Petroleum Industry Bill (PIB) in full, or even the Petroleum Industry Governance Bill (PIGB) which was passed by the 8th National Assembly but failed to get a Presidential nod. The Report which measures progress and areas of improvements in the petroleum sector acknowledged that while there have been marginal improvements in the sector, there is still much work to be done.
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The BER which identifies petroleum sector progress and areas for improvements empowers stakeholders to advocate for best practices within their various spheres of work in the sector. It assesses Nigeria’s petroleum sector against 12 Precepts to offer guidance on key decisions faced by the government, beginning with whether to extract resources in the first place, and ending with decisions that determine how generated revenue can produce maximum good for citizens. The 2019 Report provides an update on the last two years of petroleum sector governance, examined gaps in sector transparency and reported changes.
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The Report which will be presented to the public on Thursday 20th February in Abuja highlighted the yawning gaps that needs to be attended to if Nigeria is truly committed to have a proper ecosystem to explore the petroleum value chain which will help boost economic diversification the country urgently needs. Speaking on the findings of the Report, the Program Coordinator of Nigeria Natural Resource Charter (NNRC), Ms. Tengi George-Ikoli noted that “the release of the Report comes at an opportune time given the recent reforms instituted by the government and the omnibus reform in the form of the Petroleum Industry Bill (PIB) being championed by the Ministry of Petroleum Resources”.
She equally pointed out that “the governance gaps have been well articulated in the 2019 Benchmarking Exercise Report and we believe that if appropriately addressed in the bill and subsequently implemented, Nigeria would have made appreciable improvement in areas it is lagging behind in the last report which was released two years ago”. The areas that require extra attention are on the impacts of oil and gas extraction on host communities and the need to make the operations of Nigerian National Petroleum Corporation (NNPC) more transparent, accountable and productive. It is expected that the Ministry of Petroleum Resources and the leadership of the NNPC will keep to their promises to deepen ongoing reforms, hasten the process and address issues regarding the NNPC’s conflicting business model which makes it both a regulator and also a competitor in the industry.
Equally important is the need for the federal government to address concerns of host communities especially as regards pollution, job creation, security and environmental remediation. The need to use the lessons from the Ogoni Clean-up exercise as a learning curve for government, oil companies, and communities was also pointed out. The Report identified ways to manage community relationships and also high expectations especially from the youth population.
The NNRC is of the belief that if the issues raised by the Report are adequately tackled, Nigeria has the potential to compete more effectively globally and stands a chance of raising some of its close to 100 million people out of abject poverty using its natural resource endowments. This becomes imperative as many African countries have discovered crude oil and gas in huge quantities providing alternatives to foreign investors coupled with the rise in renewable energy. If Nigeria fails to use its natural resource wealth to drive economic diversification and industrialization now, it may lose a golden opportunity.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry