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Mixed signals from oil and gas sector

Prospects of Nigeria attaining fuel sufficiency in two years’ time was among the issues raised by Vice President Professor Yemi Osinbajo in his address to the 18th Biennial Conference on Health, Safety and Environment [HSE] for the country’s oil and gas sector. It was organized by the Department of Petroleum Resources [DPR] and was held in Abuja on Monday.

Represented at the event by Minister of State for Petroleum Resources Dr. Emmanuel Kachikwu, Osinbajo dropped hints that hopes of refined fuel self-sufficiency in 2020 were hinged on the country hitting a domestic refining capacity of 1.1 million bpd. This in turn is hinged on the coming on stream of the 660,000 bpd Dangote Refinery along with a couple of modular refineries. Speaking further at the forum, Osinbajo revealed that 10 out of 20 private modular refineries with about 400,000 combined refining capacity have shown serious commitment, and three of them are likely to come on stream in 2019.

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Meanwhile efforts are also in top gear to ensure that the Nigeria National Petroleum Corporation’s [NNPC] four refineries located in Port Harcourt, Warri and Kaduna are repaired to produce about 425,000 bpd  in 2020. Osinbajo also reiterated the commitment of the administration to ensure that the long-awaited Petroleum Industry Governance Bill [PIGB] becomes law as soon as possible. His clarification with respect to the PIGB was informed by growing public concern over the ding dong affair between the National Assembly and the Presidency with respect to the bill, which is now in its nineteenth year of making the rounds in the legislative mill.

Gladdening as the submissions by the Vice President may seem, such hardly clears the air of concern over some developments in the sector which have kept the Nigerian public ill at ease. While the topical issue would be the seemingly, interminably delayed PIGB, other issues, mostly from the global dimension have also come up which attract more than casual attention. For instance, according to Osinbajo, the markets for Nigeria’s petroleum products such as oil and gas are actually facing significant threats and may be facing technical contraction. He said while some traditional buyers of Nigeria’s sweet crude are now exploring other markets, some of the buyers of our gas are now also producing their own. This translates into serious threats to Nigeria’s markets for petroleum products and could spell trouble for the economy, given our over-dependence on crude oil exports.

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In another vein is the creeping, global erosion of demand for fossil fuels like petroleum with the advent and deployment of alternative energy powered facilities, more topical of which is the coming of functional electric cars. Already several world class automobile manufacturing companies have recorded significant advances in that direction, and in a manner that could reflect on Nigeria’s oil and gas production. The foregoing factor enjoys   impetus from the growing interest in alternative energy sources which had become trending.

The issue of alternative energy, once thought to be far off and esoteric, is now a veritable business focal point that is transforming the thinking of the world with respect to sustainability in energy economics. Meanwhile the country is still stuck with the PIGB which was returned to the National Assembly awaiting the implementation of the amendments prescribed by President Muhammadu Buhari, before assenting to it. In this regard is the welcome news from the National Assembly that the Committee on the PIGB will soon submit its report to the Senate plenary for further legislative action.

While the long-delayed passing of the PIGB will go a long way to sanitise the country’s oil industry and attain greater benefits for the country from this resource, it is only the beginning. Given all the mixed signals coming out of the biennial conference, it is time for our leaders to gird their loins and tackle the country’s energy future and the future of its economy.


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