By Tope Adeboboye
It was a routine meeting held by Minister of State for Petroleum Resources, Timpre Sylva, with top management staff of the ministry and chief executive officers of the ministry’s agencies in Abuja. The meeting, billed for every quarter, was aimed at reviewing the various activities geared towards the attainment of the present administration’s nine-point delivery priorities for the oil and gas sector, all aimed at growing the economy. The projects are to be achieved over short, medium and long-term periods.
The priority projects, it was gathered, include eradication of smuggling of premium motor spirit (petrol) across the Nigerian borders; complete gas flare commercialisation programme; increase crude oil production to three million b/d; reduce the cost of crude oil extraction by at least five per cent; aggressively promote passage of the Petroleum Industry Bill; aggressively promote passage of Deep Offshore and Inland Basin Production Sharing Contract Amendment Bill; increase domestic refining capacity; create a large number of well-paying jobs; and implement strategy towards lifting 100 million Nigerians out of poverty.
Stakeholders have asserted that a major cause of the nation’s economic adversity is the unrestrained smuggling of petrol across the Nigerian borders. It was gathered that the Federal Government’s determination to eradicate smuggling of this important product was one of the reasons for the closure of Nigeria’s land borders in 2019, even though the action had some negative effects on Nigerians and some of Nigeria’s neighbours.
The Nigerian Customs Service was also mandated to ban the supply of petroleum products to filling stations within 20 kilometres of Nigeria’s land borders to stop the smuggling of the products across the borders to neighbouring countries.
Justifying the government’s action, Minister of Trade and Investment, Chief Adeniyi Adebayo said the closure of the nation’s land borders did not only give security agencies the opportunity to assess prevalent challenges on smuggling at the borders, but also stopped the smuggling of petroleum products out of the country.
He explained that the Federal Government also initiated two programmes – the National Gas Expansion Programme and National Autogas Roll-out Initiative – to accomplish its gas commercialisation programme.
While virtually unveiling the two programmes, President Muhammadu Buhari had noted: “I express my deep appreciation to Nigerians for their patience, and the organised labour for its maturity and patriotism as we collectively navigate these global economic and other challenges.”
While urging Nigerians to embrace the use of gas as an alternative to fuel, Buhari noted: “The vast natural gas resources which Nigeria is endowed with has hitherto been used sub-optimally as a result of a lack of gas processing facilities and infrastructural connectivity for effective and optimal domestic utilisation.
“With a reserve of about 203 trillion Cubic Feet (TCF) and the additional upside of 600 TCF ranking Nigeria as the ninth in the world currently, the need for domestic gas expansion and utilisation are apparent,” he said.
President Buhari said the deregulation of the downstream sector had exposed many to price volatilities in the global market, even as he advised that attention should shift to a more affordable alternative for energy, especially with Nigeria’s hefty gas reserve.
“The roll-out of the National Gas Expansion Programme, Autogas Initiative could not have been done at a better time than now, especially in light of global crude oil market fluctuations coupled with the full deregulation of the local PMS market.
“These developments have made it imperative to focus on gas as an alternative fuel to move Nigeria from the conventional dependence on white products for autos and prime-movers of industrial applications, to cleaner, more available, accessible and affordable energy source.
“The outcome will not only cushion the effect of the downstream deregulation that this government has to painfully implement, but also create new markets and huge job opportunities for our people,” he said.
The President said the autogas initiative will lead to increased domestic gas utilisation and enrich the trajectory of national economic growth and development.
He urged Nigerians to embrace gas in form of liquefied petroleum gas (LPG), compressed natural gas (CNG) and liquefied natural gas (LNG) as an alternative fuel for autos and other prime-movers.
President Buhari also directed the Minister of State for Petroleum Resources to commence the process of handing over of mass transit buses to the organised labour, in a bid to ease transportation challenges among Nigerians.
And to achieve the human capital development required to drive the process, Sylva said his ministry is focusing on the development of skills, technology and manpower as well as growth in the utilisation of LPG, CNG and LNG.
He explained that the National Gas Expansion Programme which was initiated in December last year to boost the utilisation of gas in the short and medium-term is expected to create two million jobs per annum, promote skills acquisition and enhance technology transfer in addition to growing the nation’s Gross Domestic Product (GDP).
Some stakeholders believe, however, that that the programme will only be successful if the Federal zGovernment allows the private sector to participate in its implementation.
For instance, the Major Oil Marketers Association of Nigeria (MOMAN) has insisted that the support of the private sector is imperative to successfully implement the National Gas Policy which was aimed at deepening gas utilisation in Nigeria.
Chairman of MOMAN, Mr Tunji Oyebanji, said the nation would soon begin to reap the benefits of the government’s gas policies, including the Autogas scheme and the National Gas Expansion Programme.
His words: “We believe that there will be a lot of activities in the gas sector this year which the LPG and CNG will engender.
“We expect government policies in these areas to begin to bear fruits, and gas consumption, both for our domestic cooking gas and autogas, will move forward.”
While admitting that the autogas will not completely substitute the premium motor spirit this year, Oyebanji said Nigerians will begin to experience some progress made in that area.
He commended the declaration of the Year 2021 to the Year 2030 as the decade of gas development. Noting that marketers are ready to key into the autogas scheme, he said assurances are needed that their investments will be protected.
“There should be continuous engagement and involvement of the private sector as the policy is being fine-tuned and formulated so that by the time it finally evolved, it will be driven largely by the private sector,” he said.
The minister has also assured of the government’s determination to reduce the cost of crude oil extraction by at least five per cent, noting that the support of local vendors had been secured within the Nigerian Content framework to achieve the mandate.
But stakeholders have also raised some posers. Some of the questions are, will the proposed reduction of the cost of crude oil extraction rub off on the availability of the product and prevent scarcity? Will this end the issue of fuel importation? Will new refineries be established, and will the moribund ones be revamped to enable all-round availability of the product?
Sylva has assured that the government will take advantage of the African Continental Free Trade Area (AfCFTA) to transform the country into a petroleum products refining hub for the African region with its attendant socio-economic benefits. He stated this at the AfCFTA Oil and Gas Virtual Workshop, organised in collaboration with the Federal Ministry of Industry, Trade and Investment. The theme was, “Nigeria–Africa’s Refining and Services Hub under the AfCFTA.”
Sylva, who was represented at the workshop by the Permanent Secretary Ministry of Petroleum Resources, Mr Bitrus Nabasu, said Nigeria had ratified the AfCFTA, which would begin implementation this month.
Said he: “Nigeria is willing to leverage on AfCFTA to reposition its oil and gas sector for its next phase of growth. This is in line with the achievement of the vision of our national petroleum policy and national gas policy. Government has begun rehabilitating the country’s four refineries, using a public-private partnership strategy, and the refineries would have a 90-per cent combined production capacity by 2023.”
He said the Dangote Refinery, Lagos, and the Waltersmith Modular Refinery, Imo, as well as others coming on stream in the next few years, would transform Nigeria from a net importer to a net exporter of petroleum products.
The minister assured that the Petroleum Industry Bill, when passed into law, would provide the fiscal framework for attracting more investments into the sector.
Minister of Industry, Trade and Investment, Adeniyi Adebayo, said the oil and gas sector was an important component of Nigeria’s economy, hence the need to position the industry to reap the benefits of AfCFTA.
His words: “If Nigeria is to benefit from AfCFTA, it needs to re-strategise all sectors of the economy, particularly oil and gas.
“We must explore any available opportunity to make Nigeria a refining hub. This workshop is part of our preparations for the successful implementation of the AfCFTA and to sensitise Nigerians to the opportunities inherent in the agreement.”
He admitted that implementing AfCTA would be taxing, even as he urged that all hands must be on deck to overcome the challenges for the benefit of Nigeria and the African Continent.
Mr Clement Isong, Chief Executive Officer, Major Oil Marketers Association of Nigeria (MOMAN), said the private sector could play a vital role in transforming Nigeria into a refining centre.
Isong said this would save the Federal Government the huge expenditure currently incurred on subsidising petroleum products and administrative costs associated with superintending over price control in the industry.
He further noted that it would also create employment for millions of Nigerian youths and address the long-term degradation of the capacity, infrastructure and standards in the downstream petroleum industry, while building a sustainable industry.
“The private sector also has a role to develop an industry that has the capacity to attract local and foreign direct investments into Nigeria, through the establishment of ancillary and derivate industries and through equity participation.
“To achieve these critical objectives, the right environment needs to be established; an environment that supports a market-based philosophy based on the sustainability of the petroleum industry,” Isong said.