STAKEHOLDERS in the oil and gas industry have stated that the success of the economic diversification policy of the federal government depends on the success of the oil and gas sector.
Speaking at the ongoing international conference by the Society of Petroleum Engineers (SPE) in Lagos on Tuesday, the panellists that comprised of industry experts posited that government must prioritise oil and gas sector policy that will drive investment as it pursues its diversification.
Setting the tone for discussants, former minister of state for petroleum resources, Odein Ajumogobia, in his keynote address stated that there is an increasing oil and gas consumption threat to Nigeria, which requires pragmatic action on part of government to reverse the lack of development in the upstream sector due to lack of clarity in policy.
He said Nigeria might go the way of Indonesia, which was a net exporter turned into the net importer of crude oil.
“Our long honeymoon is over. If we continue the way we are going, Nigeria might become a net importer of petroleum products. With its population growing at 3.6 per cent per year, if nothing is done about reserves replacement and production we will soon go the way of Indonesia” Ajumogobia said.
Professor of Petroleum Economics and Policy Research, Wumi Iledare, said “if we have to diversify, the educational system needs attention. If the educational system collapses, there is no hope for diversification. We need the human capacity to develop the oil and gas assets that Nigeria is endowed with.”
Ademola Adeyemi-Bero, chief executive officer and managing director at First Exploration and Production Development Company Limited suggested that Nigeria can easily diversify into agriculture because of its multiple value chain developments and the fact that these developments will rub-off on other sectors of the economy.
“Other areas are the service sector, manufacturing, unlocking the infrastructure, which will have a huge impact on employment and boost household spending,” he said.
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On his part, Austin Avuru, managing director and CEO at Seplat Petroleum Development Plc argued that to move from a rental economy to one that is more productive, Nigeria needs disciplined leadership.
“You must invest; put money aside for the rainy day. Nigeria and Norway started out at the same production capacity of 2.4 million barrels, decades ago, but Norway today has a sovereign wealth fund of $1 trillion and Nigeria struggled to save $1.5 billion,” he said.
“Nigeria needs to be able to develop its real estate sector with a growing population, attract $125 billion in domestic investment and $60 billion in foreign investment annually” Andrew Nevin, advisory partner and chief economist PricewaterhouseCoopers (PwC) said.
Amy Jadesimi, managing director at LADOL, concluded by stating that “We should get the local private to work in Nigeria.
The government still constitutes 99 per cent of the capital market in Nigeria. We need a level playing ground, we need simple practical solutions and despite all the challenges Nigeria is one of the most valuable markets in the world.”
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