- as Nebo challenges stakeholders on TEM
Teddy Oscar, Abuja
The director general of Budget Office, Dr. Bright Okogun, on Monday observed that the inability of the two chambers of the National Assembly to pass the Petroleum Industry Bill is a militating factor against the growth of Nigeria’s oil and gas sector, and subsequently urged the National Assembly to quickly pass the bill, which is currently before the House of Representatives and Senate.
Okogun, who spoke at the Oil & Gas Seminar ahead of the four-day 2014 Nigerian Oil & Gas Conference Exhibition, spoke on ‘Global Economic Developments: the Nigerian Economy and Impact on the Oil & Gas’.
He expressed optimism that the Nigerian oil and gas sector will attract more liquidity, investments and capital, if the PIB and similar issues are addressed.
“The delay in passing the PIB and all the other issues around it, I think, is a major that I want to draw attention to this. We really believe that the National Assembly should move more quickly to pass the PIB. It would, at least, remove the element of uncertainty, which has been towed by many practitioners in the oil and gas sector as a major reason that… they have identified things that they want to do, but they are waiting to see what the fiscal terms that would eventually emerge look like.
“Here, I have a few more of those things that essentially should go towards making the oil and gas sector in Nigeria more competitive. Because that’s how you will attract more liquidity, more investments, more capital coming to the sector… whether it is for local producers, or in fact for international companies. The Nigerian Content Act, I think, is (also) playing a role in energising the investment shift in the sector as you can see,” he observed.
On asset divestment in the sector, the Budget Office boss said that the much talked about five billion barrels of oil would be a big potential for local players.
“Now, on the issue of asset divestment, I have heard different numbers being the barrels of oil equivalent. Five (5) billion barrels of oil, being the equivalent, is a lot of oil from the point of view of the asset base because there are many countries that own less than that. I think it depends on what the country depends on. So, if you have this size being potentially available for local investors, then you can already see that there is a big potential for local players, who should take over these assets,” he added.
Regretting the impact of the swindled US demand for Nigeria’s oil, Okogun said: “At one point in Nigeria, we were exporting as much as 40,000 (barrels of oil to US daily); but right now, we are exporting about 5,000. What it’s telling you is that elements of self sufficiency in the US has grown… the major one that we are looking at is the arrival of Shell Oil & Gas, which has become (a major) element of self sufficient in the US environment as far as oil is concerned.”
Speaking at the seminar, Mr. Samuel Egube, director, corporate banking, Diamond Bank, challenged the Federal Government to be very committed to stamping out the scourge of oil theft.
Egube, who expressed optimism that Nigeria would continue to relevant in the global oil and gas sector, further urged business people to pay serious attention on how to develop business ideas.
“Nigeria will continue to very important at the global level, and Nigeria will continue to attract investments and capital. What lenders (banks) typically look out for include: organisational integrity, deal risk, business capacity and consistency of regulator/statutory stability,” he added.
Meanwhile, the minister of power, Prof. Chinedu Nebo, has challenged participants at the event to come up with practicable solutions on some of the most critical issues necessary for the sustenance of the fragile Transition Electricity Market (TEM).
Nebo, who addressed the CWC Nigeria Oil & Gas Conference: Nigeria Power Forum on Monday ahead of the conference, particularly regretted that Nigeria still has less than 40 percent access to electricity with more than 25 million households without access.
He hinted that the Federal Government is targeting up to 75 percent penetration by 2020.
“As we move to fulfil all conditions precedent upon the declaration of the TEM, we still face some challenges. Gas supply and security issues, transmission, revenue collection just to mention a few. As you are aware, the declaration of TEM will automatically kick in the contractual obligations of all market participants.
“I am very impressed with the quality of participants at this summit. I would therefore like to challenge this forum to come up with practicable solutions (both short and long term) on some of the most critical issues necessary for the sustenance of this fragile market. Issues around market solvency, funding model for transmission, security of gas infrastructure and legacy liabilities are very critical as we migrate to a defined market structure.
“It is however sad to note that despite all these advances, Nigeria still has less than 40 percent access to electricity with more than 25 million households without access. The Federal Government is targeting up to 75 percent penetration by 2020. To achieve this yet another ambitious target, the Federal Ministry of Power is working on a National Roadmap on Access to Electricity and a comprehensive renewable energy policy, which will ensure massive connections through on-grid and off-grid solutions. This plan will require the engagement and commitment of all stakeholders; discos, development agencies, financial institutions, Rural Electrification Agency (REA) etc.
“Operation Light Up Rural Nigeria is a project to give off-grid access to communities far flung from the national grid. President Goodluck Jonathan GCFR commissioned the pilot projects at Durumi, Sape and Waru in Abuja in January 2014. The next plan is to replicate in all states of the federation,” he disclosed.
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