…Task FG on effective regulation of oil sector
Experts in the oil and gas sector have called on members of the National Assembly to ensure quick passage of the new Petroleum Industry Bill (PIB) for the assent of President Muhammadu Buhari.
The stakeholders at a Workshop organised by Facility for Oil Sector Transformation (FOSTER), for National Assembly reporters, reiterated the need for an efficient and commercially viable National Oil Company (NOC), and also the need to key into a gas economy.
The experts who looked at the fuel subsidy and the advantages of removing same by government, however, called on policymakers to come up with ideas aimed at utilising revenues to be saved from subsidy to develop other sectors of the economy.
Prof. Uche Uwaleke in his paper on the impact of fuel subsidy on the economy listed several drawbacks arising from its N1trn annual financial burden, as well as its effects on the national budget deficit which ultimately necessitated borrowing.
According to him, “the COVID-19 pandemic further exacerbated the economic woes of the country with subsidy forming part of public domestic debts of over N31trn, and that such expenditure was no longer sustainable”.
He, however, called on government, “to do more of aggressive enlightenment of the people regarding the advantages of subsidy removal to the economy and its long term benefits to the wellbeing of the people”.
Adegbite Adeniji, who is a legal consultant in the oil and gas sector, called on the Presidency and the National Assembly, to use the current bill to restructure the oil and gas sector, which he said: “holds the key to the speedy and permanent diversification of the economy”.
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Speaking on the topic, “Fixing the Oil and Gas Sector”, Gbite, said, “efforts must be made to establish strong regulatory institutions that are manned by seasoned experts whose jobs are tenured, protected and insulated from political interference by law”.
He said, “stakeholders must endeavour to solve the lack of inter-agency cooperation that has been the bane of effective regulations in the country, leading to duplications and multiple fines or levies imposed on regulated entities, thereby discouraging investment”.
He strongly advised the government to adopt the Norwegian template of setting aside a bigger amount realised from oil revenue for future investment in a Sovereign Wealth For, that caters for future generations.
Also delivered was a paper on the Efficiency of National Oil Company (NOC), as proposed in the new PIB which seeks to dissolve the current government-run Nigeria National Petroleum Corporation (NNPC), and also set up an assets management agency to handle all oil and gas assets of government.
He cited examples of countries such as Malasia’s Petronas, Brazil’s Petrobras and even the Saudi Arabian Aramco who all despite wholly owned by the government, have independent boards, separated from government influence.
According to him, “though, these companies are government companies, they have complete commercial mindsets of making money and competing with any corporate entity in the industry”.
“They have also mastered the art of squeezing money from their crude oil through effective and efficient refining activities that add more value to their economies than just exporting crude oil as Nigeria is doing”, he said.
