The oil and gas sector witnessed remarkable landmarks after years of lull. From the return of refining of petroleum to the increase in crude oil production, it may perhaps not have been a better outing for the industry. And after the initial pains of deregulation, a light at the end of the tunnel emerged, MUYIWA LUCAS reports.
For an industry that accounts for about 90 per cent of the country’s revenue earnings, the outgoing year can be described as one that brought back renewed hope for the country’s oil and gas sector.
The feats recorded in the sector, according to stakeholders, are hinged on the careful and deliberate policies not only put in place by the present administration of President Bola Tinubu, but which have so far been meticulously implemented.
Although these policies, ab initio, came with its own downside, the gains recorded afterwards have since made the former pale into oblivion. For instance, the complete deregulation of the downstream sector of the ol industry have berthed price competition on premium motor spirit (PMS) or petrol, made smuggling of petroleum products across the country’s borders unattractive, including eradicating scarcity of petrol across the country.
The ramping up of crude oil production to an all time high of 1.8 million barrels per day (mbpd); reviving of the nation’s refinery; and commencement of petrol production at the 650, 000 barrels per day (bpd), all brought back hope for the sector.
Port Harcourt refinery
On Tuesday November 26, 2024, the Port Harcourt Refinery, which had been inactive for years, billowed again. The refinery, with a 210, 000 bpd refining capacity, resumed petrol production at 60,000 bpd capacity after attaining mechanical completion in December 2023. The commencement of petrol production at the refinery marked the completion of the first phase of a process for the total 210,000 bpd facility that began in 2021 after the Federal Government secured a $1.5 billion contract to fix the facility.
Aside from petrol refining, other petroleum products now refined in the facility include Automotive Gas Oil (AGO) or diesel and Household Kerosene (HHK) or Kerosene, amongst others. Over 300 trucks loaded and trucked out of the facility on the day.
Following this feat, President Tinubu subsequently directed the Nigerian national Petroleum Company (NNPC) Limited, to ensure immediate reactivation of the second phase of the Port Harcourt refinery, as well as the Warri and Kaduna refineries. When these are completed, it will further boost the refining capacity of the country.
Perhaps the biggest feat in the country’s oil and gas sector this year is the commencement of petrol refining by the Dangote Refinery located in Ibeju-Lekki, Lagos. This is because, the Dangote Refinery on September 2, brought to an end, the inability of the country to refine petrol for 28 years.
This bold step by the firm no doubt brought huge relief to Nigerians and indeed the economy, saving her an estimated $10 billion spent on importation of petrol annually.
Crude production
Nigeria’s oil and gas production rose significantly this year to hit 1.81 mbpd. This has been credited to an intensified battle against oil thieves and saboteurs. The NNPCL Group Managing Director, Mele Kyari, informed last month that “Nigeria and its foreign partners had revved up crude oil and gas production to 1.8 million b/d and 7.4 Bcf/d.” he heaped the feat on the efforts by the government, security agencies and joint venture oil partners to tackle pilfering and sabotage.
“The interventions that led to the recovery of production cut across every segment of the production chain with security agencies closely monitoring the pipelines,” Kyari said.
Kyari said output rose from 1.43 million b/d in June to 1.7 million b/d in August and 1.808 million b/d in November, adding that the country is now targeting 2 million b/d by the end of 2024.
Pricing competition
Petrol prices this year crashed for the first time post deregulation era. The crash can be attributed to a reduction in ex depot price of the product announced by the Dangote Refinery from N970 to N899.50 per litre from its 650,000 barrels per day refinery located in Lagos. The Nigerian National Petroleum Company (NNPC) Limited, also slashed prices on its petrol ex-depot price from N1,020 to N899 per litre.
This subsequently set the tone for competition in prices in the last week of the year. The Chief Executive Officer, Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, noted that this is what deregulation brings to the market.
“What you are seeing in the price ‘war’ is the beauty of competition and the best way to protect the consumer from exploitation is competition. The competition we are seeing now is beneficial to the people, and we pray it continues this way. This is when the people will get the benefits of the deregulation if properly managed,” Dr. Yusuf said.
Stakeholders have also hailed the price reduction. While they expressed satisfaction at the development, saying it is one of the numerous benefits of deregulation in the downstream sector, they nonetheless cautioned on its downside.
The National President, Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), Billy Harry, hailed the development as a positive step toward easing the financial burden on citizens. According to him, the price cut is a much-needed relief for motorists and Nigerians, especially during the festive season.
Licensing round completion
This year also witnessed the completion of the 2022/2023 oil bid round as well as the 2024 licensing round by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC). The 2024 licensing round was launched in May. 25 licenses were issued in the exercise.
In all, there were 31 oil licences put up for bidding but 24 of these were bided for. Six of these were for the conclusion of the 2022/2023 mini bid round. Seven licences were available for bidding in the 2022/2023 bid round but six licences were bided for.
The NUPRC Chief Executive, Gbenga Komolafe, an engineer, noted that the exercise represents the first of its kind since the enactment of the Petroleum Industry Act (PIA) 2021. He added that the licencing remains provisional until winners are able to meet other conditions attached such as the immediate payment of the signature bonus, commencement of immediate exploration of the wells, among others.
He explained that upon the award, the awardees are expected to meet certain conditions, including the immediate exploration of the wells.
Amongst others, Komolafe emphasised, the licensing and award of oil blocks is expected to grow the country’s oil and gas assets; boost the country’s production output, optimise value for petroleum assets.
Besides this, the NUPRC boss said the essence is also to grow the nation’s oil and gas reserves through aggressive exploration and development; boost production while expanding opportunities for gas utilisation across the value chain; enhancing energy security and economic growth as well as attracting investments while creating employment opportunities and enabling technology transfer, including optimising the value from the nation’s petroleum assets and ensuring sustainable development.
Referencing Section 7(t) of the Petroleum Industry Act (PIA) 2021, Komolafe said the Act empowers the NUPRC to conduct periodic bidding rounds for the award of Petroleum Prospecting Licenses (PPLs) and Petroleum Mining Leases (PMLs).
“This legislation provides a framework for unlocking Nigeria’s energy wealth while ensuring sustainability, equity, and global competitiveness. The 2024 Licensing Round, launched in May, represents a significant leap in our hydrocarbon development strategy. The licensing round offers twenty-four (24) carefully selected blocks spanning onshore, shallow water, and deep offshore terrains. Together, these assets hold enormous potential for economic growth, energy security, and technological advancement,” the CCE said.
Komolafe emphasised that the NUPRC aims to make the licensing rounds an annual event to address challenges such as declining production and rising global competition.
The Nigerian Customs Service oil and Gas Free Trade Zone Command Onne, in Eleme Local Government Area of Rivers State said it generated the sum of N53.9 billion in the outgoing year 2024.
The command said the amount is higher than what was generated last year by over N26 billion and 2.3 per cent higher than their target for the year, 2024.
The Comptroller, Customs Area Controller, Usman Seriki who spoke during a news briefing at the Command’s office in Onne to share the success story yesterday said, “It is worthy of note to announce that the Command in the period under review surpassed it’s annual target for the fiscal year 2024 by 2.3% with a revenue collection of N53,977,311,009.00.
“This revenue figure has surpassed year 2023 revenue collected with us N26,802,937,818.00, which represents 98.6% increase from last year.”
Speaking further, Seriki threw light in the job of the command and said, “The Command has demonstrated unwavering commitment to excellence, innovation in trade facilitation while maintaining regulatory compliance in this vital sector of Nigeria economy.
“Through the period under review, the Command has ensured seamless importation and exportation of goods through licensed enterprises in the free zone.
“The Command also oversees the activities of free zone goods received via sea, or air. Including monitoring the value addition by the licensees operating in the zone and monitoring all stacking areas within the zone.
“The Command continues to facilitate Trade in export of refined sugar from Bundu Sugar Refinery, fertilizer from Notore Chemical PLC and Liquidified Natural Gas (LNG), crude oil from Bonny Island.”
He expressed the commitments of his office to ensuring that they remain focused in their mandate for improved national economy.
“In fulfilling our core mandate of revenue collection, we shall continue to ensure Trade facilitation and compliance to Customs regulations while promoting efficiency and transparency in clearance procedures.”
The Comptroller also expressed gratitude to the Comptroller Customs, Bashir Adeniyi, managers of Free Trade Zone and stakeholders for their cooperation and supports which made their success story possible.
“Also, I would like to sincerely commend and appreciate the Oil and Gas Free Trade Zone Authority for their overwhelming support to our operations and all our stakeholders in the Oil and Gas Free Trade Zone for their cooperation in achieving and surpassing our annual revenue target for the fiscal year 2024 while ensuring trade facilitation.
“I would like to take this opportunity to express my profound gratitude to the Comptroller General of Customs, Bashir Adewale Adeniyi MFR for his exemplary leadership and visionary initiatives.
“His unwavering guidance and strategic direction have been instrumental to our achievements.” he said.
THE oil and gas sector, a critical pillar of the economy, is embroiled in a controversy that could have significant repercussions on the local labour market and the broader socio-economic landscape.
But the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) is not unaware of this development. At its yearly Energy and Labour Summit (PEALS), it seeks to provide solutions to the problems. Recently, the summit was held and stakeholders in the industry, as usual, took time to analyse and proffer solutions to the problems.
True, since its inception three years ago, PEALS has remained a rendezvous for state and non-state actors to bring out ideas to move the sector forward.
Like the previous ones, the three-day PEALS 2024 in Abuja, with the theme: “The future of Nigeria’s oil and gas industry: Energy mix, energy security, Artificial Intelligence (AI), Divestment, and crude oil theft”, was a gathering of experts, government, policymakers, industrial relations gurus, labour leaders, among other stakeholders.
At the opening ceremony, the Union’s President, Comrade Festus Osifo, recalled that for years, the leadership of PENGASSAN headed by him, conceived the idea of the summit to fill the gap in the numerous conferences and seminars in the oil and gas space in Nigeria that don’t bend backward to examine the impact of government, organisations, and companies’ policies on the workforce in the industry, the most important assets whom we often describe as the goose that lays the golden eggs.
“It is the shortcomings of those conferences that focus only on policies, technology, and profit- making that PENGASSAN Energy and Labour Summit was designed to address.”
According to him:,“The resolutions from the last two editions of the summit have been applied in various areas to better the lives of our members and protect their jobs.
“Again, the theme for this year’s edition was carefully chosen to focus on the implication of energy security, artificial intelligence (AI), divestments, and crude oil theft on workers in the oil and gas industry, everyday Nigerians, and the economy at large.”
He lamented that the oil and gas industry stands at a critical juncture, presented with unprecedented opportunities and uncommon challenges as we navigate the pathway to sustainable energy development, security, and innovation.
“As the President of PENGASSAN, I am deeply committed to orchestrating a collective vision that encapsulates resilience, adaptability, and forward-thinking strategies to enhance the industry’s future prospects, viz- a-viz: Energy mix: The dynamic transformation of the energy landscape demands a multifaceted approach.
“Embracing a diverse energy mix that incorporates renewable sources, natural gas, and innovative technologies is not only imperative for environmental sustainability but also positions us as pioneers of a balanced energy portfolio that caters to the evolving needs of our nation and the global community.
Osifo agreed that the economy is embroiled in a controversy that could have significant repercussions on the local labor market and the broader socio-economic landscape.
He raised serious allegations against foreign oil companies, particularly those from India, accusing them of violating the expatriate quota system and undermining local content laws.
Expatriate quota system: Intent vs. reality
The expatriate quota system in Nigeria was established to regulate the employment of foreign nationals, ensuring that the majority of jobs, especially at lower and mid-levels, are reserved for Nigerians.
The system is designed to protect the local labour market, promote skill transfer, and ensure that foreign expertise is only employed in areas where there is a shortage of qualified Nigerian professionals.
However, according to PENGASSAN, this well-intentioned system is being grossly abused by foreign companies, particularly those from India.
Osifo’s claim that Indian nationals are occupying low-level jobs in companies like Sterling Oil, sometimes even in roles as menial as vulcanising or gatekeeping, is particularly alarming. Such positions do not typically require specialised skills that would justify the employment of expatriates. This disregard for the quota system not only deprives qualified Nigerians of job opportunities but also erodes the purpose of the quota system.
Divestment
Osifo said the recent trend of divestment by international oil companies necessitates a strategic shift in our approach.
“Does this present an opportune moment for local empowerment, innovation, and strategic collaboration to harness the enormous potential latent within our talent, resources, and expertise; or is our industry headed for the precipice?
“As an association, we are resolute in turning this transition into a catalyst for domestic growth, empowerment, and self-reliance.
“We are witnessing a significant shift in the landscape of the energy sector, marked by the divestment actions of companies such as ExxonMobil Producing Nigeria, Nigeria Agip Company, SPDC, and other non-operated Assets like TotalEnergies and Equinor, which has impacted the presence of international oil and gas companies in Nigeria. These developments necessitate a collective reflection on the implications on our people, industry and nation.
Crude Oil theft
He said the scourge of crude oil theft poses a significant threat to our industry, economy, and national integrity.
“As an association, we have mounted the rostrum over time, both on the streets and in the boardroom, to champion this cause, and we will not relent until victory is certain.
“We are steadfast in our resolve to continuously partner other stakeholders in the industry to combat this menace through enhanced security measures, technological innovations, community engagement, and collaboration with law enforcement agencies.”
For Osifo, “Nigeria stands at a crossroads, and our actions and decisions here in the next few days will provide a framework for a policy thrust for the government towards shaping the economic outlook of our country. It is incumbent upon us to drive positive change, foster economic growth, and ensure our people’s prosperity.
“Recent policy directions by the government have placed untold hardship on Nigerians. Chief among them is the flotation cum devaluation of the Naira, which saw our currency slide from N450 officially in May 2023 to the current exchange rate of about N1,600.
“This is the reason the landing price of PMS is over N1, 000 (reintroduction of subsidy), the reason AGO is selling for over N1, 300, and imported commodities are over the roof.
“The overarching impact of this on Nigerians can only be imagined rather than experienced.’’
“Part of the decisions of floatation,” he added, “has benefited the oil and gas companies in Nigeria.
“This has necessitated a call for a salary benchmark for oil and gas workers, aligning with the instrument of trade of the oil and gas commodity. The model practised in Angola, where legislation pegs workers’ salaries in dollars and pays them the legal tender equivalent; this is a testament to the possibilities of safeguarding the interests of workers amid currency fluctuations.
“The floating of the Naira in the official market has exacerbated the challenges faced by our members. We must explore innovative solutions to forestall financial losses to workers and prevent undue gains to companies, ensuring a fair and equitable environment for all. PENGASSAN will do all it can to push for this just and equitable distribution across its branches”.
The role of local content development
Nigeria’s local content laws, particularly the Nigerian Oil and Gas Industry Content Development Act of 2010, were instituted to maximise the participation of Nigerians in the oil and gas sector. The laws require that a significant percentage of goods, services, and labour in the sector come from local sources. This framework is meant to empower local businesses and workers, promote economic growth, and reduce the dependency on foreign expertise and resources.
However, the influx of expatriates in low-level positions, as highlighted by PENGASSAN, indicates a failure in the enforcement of these local content laws. The fact that companies can circumvent these regulations by registering numerous shell companies to facilitate the employment of foreign nationals suggests a deep-rooted problem of regulatory oversight. This manipulation of the system undermines the goals of local content development and perpetuates economic inequality, where the benefits of Nigeria’s vast oil wealth are not equitably distributed among its citizens.
Economic and social implications
The economic implications of this trend are profound. Unemployment is already a significant challenge in Nigeria, with many graduates struggling to find work. The displacement of Nigerian workers by expatriates in roles they are qualified to fill exacerbates this issue, leading to increased poverty and social unrest. Furthermore, the disparity in wages between expatriates and Nigerian workers, with the former often paid in foreign currencies like the U.S. dollar, deepens the economic divide. This wage disparity is particularly problematic in the context of Nigeria’s ongoing currency devaluation, which has severely impacted the purchasing power of Nigerian workers.
Socially, the perception that foreigners are being favoured over locals can lead to tensions and a sense of disenfranchisement among Nigerian workers. This situation is further inflamed by the fact that Nigeria’s natural resources, which should primarily benefit its citizens, are instead being used to enrich foreign entities. The potential for social unrest, driven by feelings of economic injustice, cannot be ignored.
Regulatory and governmental’s response
PENGASSAN’s call for the Federal Government to take swift and decisive action is timely and necessary. The current situation points to a failure in the enforcement of the expatriate quota system and local content laws. Regulatory bodies like the Nigerian Content Development and Monitoring Board (NCDMB) must be more proactive in monitoring compliance and penalising companies that flout these regulations. The alleged registration of over 200 shell companies to circumvent the quota system is a clear indication that more stringent checks and balances are needed.
“Furthermore, the government must address the broader issue of corruption and inefficiency within the regulatory framework. If these issues are not tackled, any reforms or interventions will likely be superficial and ineffective. Strengthening the capacity of regulatory agencies, improving transparency, and ensuring accountability are critical steps in addressing the challenges highlighted by PENGASSAN”.
The role of stakeholders
Beyond the government and regulatory bodies, other stakeholders in the oil and gas sector, including local communities, civil society organisations, and the media, have a role to play in ensuring compliance with local content and expatriate quota regulations. Advocacy and campaigns can put pressure on companies and regulators to act in the best interests of Nigerian workers. Moreover, partnerships between the government and private sector aimed at developing local skills and competencies can reduce the dependency on foreign labour, particularly in non-specialised roles.
Why govt must address the allegations
The allegations raised by PENGASSAN against foreign oil companies in Nigeria point to a serious breach of the expatriate quota system and local content development goals. The influx of expatriates, particularly in low-level positions, not only deprives Nigerians of much-needed job opportunities but also undermines the broader objectives of economic empowerment and national development.
The Federal Government, regulatory bodies, and other stakeholders must take decisive action to address these challenges, ensuring that Nigeria’s oil wealth benefits its citizens first and foremost. Failure to do so could lead to increased economic inequality, social unrest, and a continued erosion of trust in the country’s institutions.
Nigeria stands at a critical juncture in its economic history. As the largest oil and gas producer in sub-Saharan Africa, with estimated reserves of 37 billion barrels of oil and 188 trillion cubic feet of gas, the country’s petroleum industry forms the backbone of its economy. It contributes approximately 90% of Nigeria’s foreign exchange earnings and about 60% of total income. Yet, this abundance of natural resources has not translated into broad-based economic development and improved living standards for the majority of Nigerians.
The country continues to grapple with what economists term the “resource curse” or the “paradox of plenty.” This phenomenon is characterized by countries rich in natural resources, particularly non-renewable resources like minerals and fuels, experiencing less economic growth, less democracy, and worse development outcomes compared to countries with fewer natural resources. In Nigeria, this is manifested in high poverty rates, inadequate infrastructure, and uneven economic development.
The governance of Nigeria’s oil and gas sector has undergone several transformations since the discovery of oil in commercial quantities in 1956. From the pre-independence era governed by the Petroleum Ordinance of 1889, which vested oil mineral rights in the British Crown, to the post-independence period where the Petroleum Act of 1969 transferred these rights to the Federal Government of Nigeria. The creation of the Nigerian National Petroleum Corporation (NNPC) in 1977 and the recent Petroleum Industry Act (PIA) of 2021 were further attempts to improve the sector’s governance. Despite these reforms, the industry remains plagued by poor governance, lack of transparency, and inefficient resource management.
A prevailing misconception has been that the shift from state-controlled to private-sector governance would inherently lead to improvements in the sector. However, this transition has not yielded the expected results. The passage of the PIA has not had the anticipated positive impact on the oil and gas industry. Nigeria’s oil revenue has continued to decline, and the country struggles to meet its Organization of the Petroleum Exporting Countries (OPEC) quota. Issues of corruption, inefficiency, and lack of transparency persist. This suggests that the governance model alone is not the root cause of the sector’s challenges.
The core issue lies not in the inefficacy or corruption of state-owned oil companies but in the lack of a clear economic design that aligns the industry with national development goals – hence the need for another approach: Development Oil.
The concept of “Development Oil”
“Development Oil” is an approach to oil and gas governance that views these resources not merely as commodities for export and revenue generation, but as strategic assets for driving comprehensive national development. It stands in stark contrast to the traditional “Contract Oil” approach that Nigeria has implemented over the years. Contract Oil, primarily implemented through Joint Ventures (JVs) and Production Sharing Contracts (PSCs), treats oil and gas primarily as commodities to be extracted, sold, and the profit shared between the government and International Oil Companies (IOCs).
This model has resulted in a passive government role, IOC dominance, limited NNPC involvement, significant capital flight, and limited local content development. In contrast, Development Oil views oil and gas as strategic assets for driving comprehensive national development. It emphasizes active state participation, value addition within the country, local content development, revenue retention and reinvestment, and long-term sustainability. This approach adheres more closely to the constitutional mandate in Sections 16 and 44 (3) of the Nigerian Constitution of using natural resources for the welfare and security of Nigerian citizens and seeks to address the “resource curse” that has plagued Nigeria.
This concept is built on several key principles. At its core is strategic resource management, which treats oil and gas reserves as national assets to be managed for long-term development rather than short-term gain. It also emphasizes integrated economic planning, aligning oil and gas sector policies with broader national development goals. Value addition is another crucial aspect of Development Oil, focusing on developing the entire value chain within the country, from extraction to refining and petrochemicals. This goes hand in hand with local content development, which aims to maximize the participation of local businesses and workforce in the oil and gas industry. The approach also prioritizes revenue retention and reinvestment, keeping a significant portion of oil revenues within the country and reinvesting them in critical sectors. Sustainable development is another key principle, balancing resource exploitation with environmental conservation and planning for a post-oil future.
The concept of “Development Oil” can be traced back to visionary leaders who saw oil not just as a revenue source, but as a tool for national advancement. One of the earliest manifestations of this thinking was the creation of the Organization of Petroleum Exporting Countries (OPEC) in 1960. Leaders like Muammar Gaddafi envisioned OPEC as a means to leverage oil resources for the development of member nations. Several countries have successfully implemented aspects of the Development Oil approach. Norway is often cited as a prime example.
The country established a sovereign wealth fund, now the world’s largest, to invest its oil revenues for future generations. Norway also developed a strong domestic oil industry and used its oil wealth to fund extensive social welfare programs. Saudi Arabia, while initially focused on oil exports, has in recent years pursued a Development Oil approach through its Vision 2030 plan.
This includes using oil revenues to diversify the economy, develop non-oil sectors, and invest in education and infrastructure. Malaysia, through its national oil company Petronas, has pursued a Development Oil strategy. Petronas has invested in developing local expertise, expanding into the entire oil and gas value chain, and using oil revenues to fund national development projects. The United Arab Emirates, particularly Abu Dhabi, has used its oil wealth to fund economic diversification, infrastructure development, and the creation of sovereign wealth funds for future generations.
To reposition the oil and gas industry as a driver of economic diversification and sustainable development, it is essential to establish a clear national agenda. This should be accompanied by a comprehensive National Oil and Gas Development Plan that outlines specific goals, timelines, and key performance indicators for the sector’s contribution to national development.
It’s important to recognize that Nigeria’s natural resources are a sovereign inheritance, constitutionally guaranteed to provide welfare and prosperity for all Nigerians – a right that cannot be delegated to International Oil Companies (IOCs) by contract. Currently, management and control of Nigeria’s oil and gas is delegated to IOCs through JVs and PSCs, which is contrary to Section 44 (3) of the Constitution that mandates the government of the federation to manage and control all minerals including oil and gas.
Existing Joint Venture agreements and Production Sharing Contracts with International Oil Companies (IOCs) should be reviewed and potentially revised. Agreements with IOCs should be reframed as economic development agreements rather than simple contracts. These agreements should engage the capital and technology of foreign companies in undertakings designed to have a decisive positive impact on the country’s economy, while maintaining sovereign control over resources. New models for engagement with IOCs should prioritize technology transfer, local content development, and value addition within Nigeria.
A new governance framework centred on development should be created. This should include one strong and independent regulatory body to ensure transparency and efficiency, and a restructured national oil company focused on maximizing value for national development, similar to Saudi Arabia’s model.
Innovative funding mechanisms, such as a Sovereign Oil Fund guaranteed by oil reserves, should be explored to finance strategic investments in the sector and related industries. This approach would allow Nigeria to leverage its proven reserves as collateral for borrowing, enabling the country to fund its own oil and gas operations without relying on foreign companies. A transparent and accountable mechanism for managing the Sovereign Oil Fund should be established.
Collaboration between new Nigerian actors in the oil and gas sector and the federal government should be encouraged to build a new strategy for oil and gas exploration based on the concept of development oil. Investment in capacity building for Nigerian oil and gas companies should be prioritized to reduce dependence on IOCs. A significant portion of oil and gas revenue should be reinvested in diversifying the economy and developing non-oil sectors.
Local content policies should be strengthened to ensure greater participation of Nigerian businesses in the oil and gas value chain. Investment in developing petrochemical and manufacturing industries should be made to add value to raw oil and gas products. Special economic zones focused on oil and gas-related industries should be established to attract investment and create jobs.
The current exit of IOCs presents both a challenge and an opportunity for new Nigerian actors in the oil and gas sector. In collaboration with the federal government, these actors must rise to the occasion and build a new strategy for oil and gas exploration based on development oil principles.
By aligning the oil and gas sector with broader national interests and constitutional obligations, Nigeria can create a more diversified, resilient, and prosperous economy that truly benefits all its citizens. This approach not only promises economic growth but also reaffirms Nigeria’s sovereignty over its natural resources, ensuring that they are managed for the welfare and security of all Nigerians, as mandated by the constitution.
●Dr Agbakoba (SAN) and Okeke are of OAL Energy and Natural Resource Practice Group.
With persistent fuel scarcity, Nigeria’s oil and gas sector stands at a critical crossroads, grappling with persistent challenges that demand immediate and decisive action. Despite the significant financial strain caused by importing fuel, previous administrations have failed to revitalize the nation’s refineries, leaving a gaping hole in our energy strategy. The Bola Tinubu administration faces an urgent task: to end the cycle of dependency on fuel imports and implement the Petroleum Industry Act (PIA) effectively. With NNPCL’s repeated delays in refinery operations and the need for a level playing field, Group Business Editor SIMEON EBULU writes that it is time for a bold, unwavering approach to address these systemic issues and drive meaningful reform
The sun beats down relentlessly on the bustling streets of Lagos, but it’s more than the heat that’s fuelling the rising tempers. Once again, a familiar and dreaded crisis has gripped the city: petrol scarcity. In a nation where fuel powers the rhythm of daily life, this shortage is far more than an inconvenience—it’s a catastrophe. At a petrol station in Ikeja, a snaking queue of vehicles stretches for miles, winding through the streets and bringing traffic to a standstill. Bleary-eyed drivers, exhausted from hours of waiting, lean on their horns in frustration, but the oppressive heat and thick air of desperation swallow their sounds.
Among the many stranded was Adebayo, a middle-aged taxi driver and father of four. His livelihood depended on the fuel that powered his taxi, and without it, his family’s already precarious existence was at risk. “I’ve been here since 3:00 AM,” Adebayo said, wiping sweat from his brow. “There’s no guarantee I’ll get fuel today. If I don’t, I don’t know how I’ll put food on the table tonight.” The scarcity had driven up prices at the black market, where fuel was sold at exorbitant rates by opportunistic dealers. But for Adebayo, whose earnings barely covered his daily expenses, the black market was not an option. “I can’t afford their prices,” he lamented. “If I buy from them, I’ll lose money with every passenger I carry. But what choice do I have?”
Across town in Surulere, Nneka, a young office worker, stood at the bus stop, anxiously checking the time. It was already 7:30 AM, and there was no sign of the usual danfo buses that ferried people to their destinations. The few buses that did appear were already packed to the brim, with desperate commuters hanging from the doors, clutching onto any available surface for dear life. Nneka had been waiting for over an hour, but each passing minute brought her closer to being late for work—a prospect that could cost her the job she had worked so hard to secure. “My boss doesn’t care about the petrol scarcity,” she said, her voice tinged with worry. “If I’m late, I’m late. I can’t afford to lose this job, but how can I get there on time if there’s no transport?”
The situation was the same in other parts of the city. In Yaba, commuters stood in long lines at bus stops, hoping for a miracle. The scarcity had doubled the usual fare, and many who couldn’t afford the hike were left stranded, helplessly watching as buses passed them by. Even those who managed to squeeze into a bus faced the risk of delays as the vehicles crawled through traffic jams exacerbated by the endless queues at petrol stations.
While commuters struggled to reach their destinations, businesses across Nigeria were feeling the pinch of the petrol scarcity. In the bustling Balogun Market, one of the largest in Lagos, traders who relied on generators to power their stalls were facing an unprecedented challenge. With the scarcity driving up the price of petrol, the cost of running a generator had become prohibitive. Chinwe, a fabric trader in the market, expressed her frustration as she watched customers walk away from her dimly lit stall. “I usually sell a lot by this time of day,” she said, “but without light, people don’t want to come in. My generator has been off for two days now because I can’t afford the fuel. If this continues, I’ll lose everything.”
The impact of the scarcity extended beyond the market stalls. Small businesses that depended on deliveries were struggling to keep up with demand. Delivery trucks sat idle as their drivers searched in vain for petrol, leaving perishable goods to spoil and orders unfulfilled. For many, the crisis threatened not just profits, but the very survival of their businesses. The petrol scarcity is not just a problem for Lagos; it is a national crisis. In cities across Nigeria, the story is the same—long queues, inflated prices, and a populace pushed to the brink of despair. The ripple effects are felt in every sector, from transportation and commerce to education and healthcare.
Why federal government should take a decisive action
Serious concerns are mounting over the ongoing scarcity of petroleum products in the country, exacerbated by allegations of adulterated fuel being sold at some retail outlets. Nigerians from all walks of life—manufacturers, professionals, artisans, and operators in the petroleum and gas sectors, to name a few—are increasingly worried that, unless the Federal Government takes decisive action to address the troubling developments in the administration of Nigeria’s oil and gas sector, the repercussions could be severe, not only for the economy but for the overall wellbeing of the citizenry.
These concerns are heightened by recent developments in the industry. A significant issue currently facing the sector involves allegations made by Dangote Refinery, accusing those in charge of the nation’s oil and gas industry of favouring the importation of petroleum products over ensuring the functionality of local refineries. The company also claims that certain key officials within the NNPC are implicated in owning a refinery in Malta, from where they have been importing substandard products into Nigeria.
As expected, those implicated in the allegations quickly issued denials. Not only did they absolve themselves of any wrongdoing, but they also challenged anyone with evidence to come forward. The Group Managing Director of NNPCL, Mele Kyari, and the Managing Director of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, Farouk Ahmed, both denied any involvement, daring anyone to prove that they own a refinery abroad.
However, the controversy did not end there. Just days later, another allegation emerged, once again stirring the waters of the nation’s oil industry. This time, Oando, a major player in the sector, was implicated. The company swiftly denied the accusation, issuing statements to both the Nigerian Stock Exchange in Lagos and the Johannesburg Stock Exchange in South Africa, where it is listed, asserting that it had no involvement with the alleged refinery in Malta. This denial seemed to put the matter to rest—until last Friday, when The Cable reported that Matrix Energy, an oil retail outlet, was the actual importer of petroleum products from Malta. This revelation reignited the debate, bringing the issue back into the spotlight. While Matrix Energy acknowledged its involvement in the importation of petroleum products, the company maintained that the products it imported were not adulterated.
Matrix Energy Group
At the helm of Matrix Energy Group is Abdulkabir Aliu, who serves as the Group Managing Director and is also a member of the Presidential Economic Coordination Council. The leadership team at Matrix Energy includes notable figures such as Luqman Salam-Alada, Executive Director of Downstream; Aisha Said-Aliu, Group Head of Business Development and Strategy; Oluwatoyin Showunmi, Executive Director of Retail; Olabisi Sogunro, Group Head of Support Services; and Olajide Aogo, Managing Director of the group’s fertilizer arm.
When Aliu appeared before the Senate Committee, which was established to investigate the allegations of importing adulterated or substandard petroleum products, he addressed the concerns directly. Aliu stated: “Matrix in Nigeria has over 2700 staff and we have invested in the country because we believe in this country. We’re being accused of bringing products from Russia and some other countries. It’s strange to me as we are not aware that Nigeria has banned, or stopped importation of products from some countries. The most important thing to us and every government is to make goods and products available to the people at affordable price.”
The Chief Executive Officer of Matrix Energy Group, Aliu, is reportedly well-connected within the corridors of power, particularly with the management of NNPCL and its subsidiaries. Sources indicate that Aliu’s relationship with the NNPCL dates back to the first term of the Buhari administration, long before the current government took office. Investigations have revealed that Matrix Energy played a pivotal role during a financially challenging period for the NNPCL. At a critical time, the company reportedly provided financial assistance to NNPCL, helping to stabilise its operations. In return, Matrix Energy was allocated crude oil cargoes, which it exported for refining abroad and then re-imported into Nigeria as refined products. This arrangement not only solidified the company’s standing in the industry but also deepened its ties with NNPCL.
To further corroborate the close relationship between Matrix Energy Group and NNPCL, a source, who requested anonymity, explained, “I’ll keep it brief, but there’s a lot to unpack. Since the year 2000, Nigeria’s subsidy burden had already started to strain the economy and NNPC’s balance sheet, significantly increasing their debt liabilities.” The source continued, explaining that in 2005, NNPC made a strategic decision to mortgage oil production from OML 119, specifically 20,000 barrels per day, as a means of debt repayment. OML 119 is an offshore asset comprising the Okono and Okpoho fields and is particularly significant because it is one of the eight Oil Mining Leases (OMLs) where NNPC holds 100% equity.
According to the source, from 2005 to the present, the revenue generated from OML 119 has not been remitted to the Federation Account. Instead, it has been used to offset various debts, including subsidy payments by the NNPC. This diversion of funds further highlights the intricate and long-standing financial manoeuvres that have tied Matrix Energy Group and NNPCL together.
By 2012, NNPC’s debt had escalated to $8.5 billion. To address this substantial liability, $5 billion, which represented dividends from Nigeria Liquefied Natural Gas (NLNG), was used as part payment towards the debt. The remaining $3.5 billion was secured against the daily production of 20,000 barrels from OML 119. This arrangement was structured under special purpose vehicles (SPVs) named PXF1 and PXF2. PXF1 was designated for a five-year term, while PXF2 was set for a seven-year term, extending the repayment period for this portion of the debt.
“In 2020, at the height of COVID 19, Nigeria had shortfall of revenue, NNPC had to make a pre-payment plan of $1.5 billion with Matrix and Vitol. Repayment was going to be from daily production of 30,000 barrels of crude oil from another OML in which NNPC has 100 % equity, and it will run for 5 years under an SPV called Project Eagle
“The daily 30,000 barrels of crude oil given to Matrix and Vitol for their “loan” of $1.5 billion during Covid-19, is what is taken to Malta , refined/blended ( to be cheaper ) and sold to Nigerians. By the end of 2024, the 12-year deal to repay $3.5 billion will end. By the end of 2025, the 5-year deal to repay Matrix and Vitol their $1.5 billion will also end. That is all I have to say,” the source said.
An investigation by The Nation revealed that other operators in the oil and gas sector have taken a keen interest in Matrix Energy Group due to its “unusual rise” in the industry. Despite not being a particularly large firm, Matrix Energy’s rapid expansion has drawn attention for its deviation from typical growth patterns in the sector. According to one industry insider, the company’s remarkable progress and staggering volumes of activity have raised eyebrows. In July 2024 alone, Matrix Energy received approximately 25 per cent of Nigeria’s monthly petrol consumption into its storage facility. This figure is notably striking, especially considering that the company operates fewer than 160 filling stations nationwide. To industry players, such a significant share of the national fuel supply, coupled with relatively modest retail infrastructure, is highly unusual and has fuelled speculation about the company’s rapid ascent.
In the first week of August, Matrix Energy Group was reported to have discharged a petroleum product-laden vessel at a facility owned by Pinnacle Oil and Gas in the Lagos Free Zone. The vessel in question, MT ROMEOS, had its load port clearly identified as OPL MALTA. While the client for the petroleum products was listed as NNPC Retail, it is widely recognized that Matrix Energy Group, as one of NNPCL’s trading partners, likely conducted the operation on behalf of its client. This arrangement underscores the intricate connections and operational dynamics within the sector.
UPSTREAM ACTIVITIES AND THE NNPC CONNECTION
• About 4 crude cargoes per month are allocated to Matrix Energy by NNPC (Tables)
The crude allocations to Matrix are traded by Gulf Transport & Trading (GTT), a trading company registered in the UAE
•Two of the three crude cargoes of the recently launched Utapate grade were allocated to GTT.
The crude cargoes are typically sold at a $3 per barrel premium which translates to $3 million per cargo . This implies a profit of almost $150million per year or N240 billion at the prevailing #1590/$
• They also have three marginal fields prospecting licences as listed on their website
DOWNSTREAM ACTIVITIES AND THE RUSSIA/MALTA CONNECTION
• Matrix Energy is also active in the downstream sector. They own a 150 million litre capacity depot in Warri (Bluefin Depot), three old ships (Matrix Pride, Matrix Triumph, Matrix S.ILU), and about 500 trucks
• They are very active in the import of Russian products through various blending locations.
• Import of low-grade fuel from Russia
• Import of petroleum products from Malta
As previously noted, in July alone, approximately 25% of Nigeria’s monthly PMS consumption was allocated to Matrix Energy Group, a relatively small player in the industry.
Our position, by Matrix Energy
Amid the ongoing revelations, the company has issued a statement distancing itself from any involvement in the importation of adulterated fuel. The statement reads: “Our attention has been drawn to a recent online publication where our name was mentioned. While we might have preferred to overlook the fabrications in the publication, we feel compelled to correct the record and distinguish fact from sensationalism. It is crucial for us to address this matter to protect and uphold the integrity of our brand and the reputation we have diligently built over the past 20 years.”
In a statement signed by Ibrahim Akinola, Head of Communications at Matrix Energy Group, the company emphasised its commitment to compliance with approved specifications for imported products. Akinola stated, “Matrix Energy Group remains steadfast in adhering to the rigorous standards required for imported products. We have consistently ensured that our products meet all approved specifications and have never been found wanting in this regard.”
Akinola said: “Our company is recognised and approved by global international companies, national oil companies, major construction firms, and various end-users. “Our consistent ability to deliver on all contracts at competitive prices has solidified our strong position in the industry today,” adding that the Chief Executive Officer of the company, Abdulkabir Adisa Aliu, is a member of President Tinubu’s Economic Coordination Council.
The statement noted that Aliu’s selection by Mr President to serve as a member of the Economic Coordination Council is a recognition of his dedication to shared values and his commitment to the betterment of Nigeria in the Renewed Hope Agenda, for which he remains deeply grateful. Matrix Energy Group, Akinola said, “is a wholly indigenous and independent oil marketing and trading company, with substantial investments in strategic infrastructure, including vessels, oil and gas terminals, trucks, and retail outlets across 28 states, including the Federal Capital Territory (FCT).”
He added: “Our company is recognised and approved by global international companies, national oil companies, major construction firms, and various end-users. Our consistent ability to deliver on all contracts at competitive prices has solidified our strong position in the industry today.”
Why Fed Govt should act
At this critical juncture, the challenges plaguing Nigeria’s oil and gas sector must be addressed with unwavering seriousness and resolve. The refineries need to be operational, and our dependence on fuel imports must come to an end. The bulk of our precious foreign exchange is spent on importing fuel, which is unsustainable. Previous administrations have failed to fix the four refineries with a combined capacity of 420,000 barrels of crude oil. The Tinubu administration must break from this pattern and make a tangible difference. NNPCL must step up its efforts; it has repeatedly postponed the resumption of production at the Port Harcourt refinery since May of last year.
The Petroleum Industry Act (PIA) must be fully implemented. The government has stated that crude should be allocated to local refineries with payments made in Naira. It is time for the government to enforce this directive firmly and ensure a level playing field for all stakeholders. The era of untouchable figures and sacred cows must end. The focus should be on fixing the sector decisively, not on shifting blame. The time for action is now. Enough of the blame game.
Ibironke Ibrahim, a highly regarded Operations Technology (OT) and Information Security Expert, is known for her work in helping oil, gas, and power companies enhance their security posture by improving the protection of their production infrastructure from cyber risks. With over 20 years of experience, Ms. Ibrahim has worked with some of the world’s largest energy companies to secure their critical operations. She speaks with IBRAHIM ADAMon a topic of increasing importance: data security in remote and offshore environments.
Let’s start with the basics. Why is data security particularly important in the oil and gas sector, especially in remote and offshore environments?
The oil and gas sector, like many industries, is increasingly reliant on technology and data for day-to-day operations. Offshore and remote facilities, which include oil rigs, refineries, and gas plants, are no longer isolated from the digital world. In fact, many of these sites are now interconnected through data networks to corporate headquarters, allowing for real-time monitoring, remote management, and advanced analytics to optimize operations. However, this interconnectedness introduces significant security risks. Many of these remote operations rely on Operational Technology (OT), such as SCADA (Supervisory Control and Data Acquisition) systems, Industrial Control Systems (ICS), and other specialized equipment that wasn’t originally designed with cybersecurity in mind. As companies integrate these OT systems with traditional IT systems, the attack surface expands, creating vulnerabilities that hackers can exploit. Additionally, remote facilities are often located in isolated or offshore areas, which means that cybersecurity teams can’t always be physically present to monitor or respond to threats in real time. This makes it even more crucial to have effective remote monitoring systems in place. A cyberattack targeting OT systems could have catastrophic consequences, such as production downtimes, environmental disasters, or safety issues. These kinds of breaches not only affect a company’s bottom line but can also endanger lives and damage ecosystems.
You mentioned the increased reliance on SCADA and ICS systems. How do these technologies contribute to the complexity of cybersecurity in the oil and gas industry?
SCADA and ICS are at the core of managing industrial processes, especially in offshore and remote environments. They control everything from the drilling operations to the flow of oil and gas, energy production, and even monitoring environmental impact. These systems allow operators to monitor and control equipment remotely, which increases efficiency and reduces operational costs. The complexity arises because SCADA and ICS were originally designed to operate in isolated environments where the focus was on functionality and operational continuity, rather than security. Many of these systems were not built to withstand modern cyber threats. Legacy systems, which are still in use at many offshore and remote sites, often run on outdated software that lacks the necessary security features to defend against cyberattacks. As more companies integrate their OT systems with IT networks for data analysis and optimization, they inadvertently expose these systems to external threats. This convergence creates opportunities for cybercriminals to infiltrate corporate IT systems and then pivot to OT systems, where the consequences of a breach could be disastrous. Think about an attacker gaining access to a remote oil rig’s SCADA system and tampering with the controls—this could cause equipment malfunctions, spills, or even explosions. In short, while SCADA and ICS systems are crucial for the operation of remote facilities, their lack of inherent cybersecurity measures and their growing connectivity with IT systems significantly increase the risk of cyber vulnerabilities.
What are some of the most significant cyber threats facing offshore oil and gas operations today?
The threats facing offshore oil and gas operations are varied and evolving. Some of the most common threats include: Ransomware Attacks: This is one of the most dangerous types of cyberattacks. In a ransomware attack, malicious actors encrypt critical data or control systems and demand a ransom for its release. For offshore operations, such attacks can result in severe disruptions, halt production, or even compromise safety measures. In 2020, the Norwegian oil company, Aker BP, was targeted by a ransomware attack that disrupted its operations for several days.
Phishing and Social Engineering: Phishing remains one of the most common methods of gaining access to corporate networks. Offshore employees, who may have limited access to continuous cybersecurity training, are often targeted through phishing emails. A single successful phishing attack can allow hackers to infiltrate corporate IT systems and move laterally to access critical OT systems.
Malware and Targeted Cyberattacks: Malicious software designed specifically to target OT systems is an emerging threat. The Stuxnet attack, which targeted industrial control systems in Iran’s nuclear facilities, demonstrated just how dangerous malware can be when tailored to exploit specific vulnerabilities in SCADA and ICS systems. Oil rigs and offshore platforms are equally vulnerable to such targeted cyberattacks.
Insider Threats: Employees or contractors with access to sensitive systems can pose a risk, whether intentionally or inadvertently. In offshore operations, where employees are often working in isolation or on short shifts, it can be challenging to maintain constant vigilance. Insiders can unintentionally introduce vulnerabilities through poor cybersecurity hygiene or, in some cases, may be exploited by external threat actors.
Supply Chain Attacks: Offshore facilities rely heavily on contractors and third-party vendors for various services, including equipment maintenance and software updates. These third-party vendors can become vectors for cyberattacks. In fact, in 2020, the TrickBot malware was found to have infected many oil and gas contractors, eventually leading to disruptions in operations.
Given these threats, what practical measures can oil and gas companies take to secure their remote and offshore facilities?
The key to securing offshore and remote oil and gas operations is a multi-layered defense strategy. Here are some essential measures that companies can implement:
Network Segmentation: One of the first steps to reducing risk is to segment the IT and OT networks. This means separating critical OT systems from corporate IT systems, ensuring that any breach in the IT network doesn’t automatically grant attackers access to OT systems. Network segmentation is crucial in preventing the lateral movement of threats.
Zero Trust Architecture: The zero-trust approach assumes that no user or device, whether inside or outside the network, should be trusted by default. Every access request must be verified before being granted. This approach is particularly useful in remote environments, where access is often granted to external contractors or employees on the move. Implementing multi-factor authentication (MFA) and strong access controls ensures that only authorized personnel can access critical systems.
Real-time Monitoring and Threat Detection: Continuous monitoring of both IT and OT systems is essential. Using advanced threat detection technologies that can identify unusual activity, even in remote environments, allows for early detection of potential attacks. This could include the use of intrusion detection systems (IDS) and security information and event management (SIEM) solutions to monitor data flow and flag suspicious activity.
Employee Training and Awareness: Employees, particularly those on offshore platforms, must be trained regularly on cybersecurity best practices, from recognizing phishing attempts to reporting security incidents. Human error remains a significant vulnerability, and addressing it through cybersecurity awareness programs is critical.
Incident Response Plans: Offshore facilities must have comprehensive incident response plans in place. These plans should include predefined protocols for handling different types of cyberattacks, such as ransomware or insider threats. The ability to respond quickly and effectively is essential for minimizing damage.
Patch Management: Regular software updates and patching are vital in keeping systems secure. Many cyberattacks exploit vulnerabilities in outdated systems, especially legacy OT systems. Companies need to establish regular patching schedules and ensure that updates are applied promptly, even in remote locations.
With the rapid pace of technological advancements, where do you see the future of cybersecurity in remote and offshore oil and gas environments?
The future of cybersecurity in offshore and remote oil and gas environments is evolving toward more automation and artificial intelligence (AI)-driven solutions. As the industry continues to adopt digital transformation, AI and machine learning will play a pivotal role in enhancing threat detection, automating responses, and managing large-scale networks of connected devices.
We’ll also see more emphasis on cloud security as companies move more of their operations to cloud-based platforms. This will require a shift in focus to securing data in transit and ensuring that third-party cloud providers have the necessary security measures in place.
Blockchain technology is another area to watch. Blockchain’s inherent security features—such as its decentralised nature—could be leveraged to improve data integrity and provide an additional layer of protection for critical systems.
Ultimately, the oil and gas industry needs to embrace a culture of continuous improvement and collaboration. Cybersecurity will remain a critical focus as the sector becomes more digital and interconnected, and industry-wide cooperation and information-sharing will be vital to staying ahead of emerging threats.
Thank you, Ms. Ibrahim, for sharing your insights on data security in remote and offshore environments. Your expertise in this field is invaluable, and I believe this conversation will help many in the industry better understand the importance of securing their critical infrastructure.
Thank you for the opportunity to discuss these important issues.
• Edun unveils new guidelines to revitalise sector
An initiative to incentivise investors in the oil and gas segment of the nation’s economy aimed at attracting $10billion investment, was yesterday unveiled by the Minister of Finance and Coordinator of the Economy, Wale Edun
The event which culminated in the endorsement of the Consolidated Guidelines for the implementation of Fiscal Incentives for the Oil & Gas Sector – a prime segment of the Presidential Directive aimed at enhancing the Nigerian oil & gas sector’s global competitiveness aimed at stimulating economic growth, took place at the headquarters of the Federal Ministry of Finance, Abuja.
The Presidential Directives were developed and coordinated by the Special Adviser to the President on Energy, Mrs. Olu Verheijen to ensure a competitive framework for the Nigerian oil and gas industry. These Consolidated guidelines for the fiscal incentives are based on extensive collaboration across Finance and Petroleum Ministries, as well as several key regulatory bodies including the Federal Inland Revenue Service (FIRS), the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
Mrs. Verheijen, said these new measures have been designed to deliver a competitive Internal Rate of Return (IRR) for Oil & Gas Projects and attract over $10 billion in new investments within the next 12-18 months, adding that they also underscore Nigeria’s commitment to reaching its long term oil production target of 4 million barrels per day whilst enhancing the reliability of gas supply to boost export earnings and fuel Nigeria’s industrialization.
Among the guidelines signed, she said, were the NUPRC Guideline on Hydrocarbon Liquids Content in a Non-Associated Gas (NAG) Field, essential for accurately categorising and quantifying the hydrocarbon liquid content in these fields. She said the guidelines also focused on the applicability of tax credits and allowances for Non-Associated Gas Greenfield Development and the Midstream Capital and Gas Utilization Allowance, providing taxpayers with clarity on the computation of these benefits.
In his remarks, Edun, applauded President Bola Ahmed Tinubu for signing the directive in February 2024 to engender growth in the Nigerian oil and gas sector, which he said, had stagnated for more than 10 years. He also emphasised the potential of the guidelines, saying, “The idea is to create an atmosphere conducive to international competitiveness such that investment comes in, adding that in this case, “we know it’s foreign direct investment.”
The signing ceremony was attended by various stakeholders, including NNPC Limited, Oil Producers Trade Section (OPTS) and the Independent Petroleum Producers Group (IPPG), further highlighting Nigeria’s unified approach toward reinvigorating its oil and gas sector.
The Federal Government said the oil and gas sector is witnessing an influx of foreign personnel.
The government which vowed to pay special attention to the sector said the emphasis on international certification has marginalized local welding professionals, depriving them of opportunities to contribute their expertise.
Minister of Science and Technology, Chief Uche Nnaji, said despite having over one million welders, Nigeria still loses an estimated $10 billion annually in revenue by importing welders with international certification, displacing local service suppliers due to the lack of acceptable accreditation.
He said this yesterday in Abuja at the launch of the National Policy on Welding and Welding-Related Fields and presentation of its Strategy Implementation Action plan.
He said: “It is concerning that the lack of internationally recognized certification of industry practitioners has prevented our indigenous welding sector, which should be making a substantial contribution to Nigeria’s economy, from exploiting myriads of opportunities, particularly in the oil and gas industry and exporting them to an influx of foreign welding personnel.
“The global welding market emphasizes international certification of its service suppliers, there is little room for our local welding professionals to showcase their talents and potential unless we consciously and progressively certify existing capacities and regulate the practice. Consequently, we have introduced the National Policy on Welding and Welding Related Fields to address this issue and promote the use of local welding personnel in critical economic sectors.
“Despite having over one million welders, Nigeria still loses an estimated $10 billion annually in revenue by importing welders with international certification, displacing our local service suppliers due to the lack of acceptable accreditation. Research has shown that welders’ contribution to all fabricated products exceeds 70 per cent, with most welder-wage components unwittingly exported.
“The influx of foreign welding personnel, particularly in the oil and gas industry, demands special attention. The emphasis on international certification has marginalized local welding professionals, depriving them of opportunities to contribute their expertise. The recent approval of the National Policy on Welding and Welding-Related Fields is a crucial step towards addressing this issue by promoting the utilization of local welding personnel in critical sectors of the economy.”
Board Secretary, Nigerian Institute of Welding, Dr. Solomon Edebiri, said the policy when implemented, will provide the right platform for the development of technology, SME, informal Sector, human Capacity, infrastructure across all Sectors, equipment manufacturing and quality control improvements.
He said there is no doubt that proper implementation of this policy will save Nigeria over 10 billion United States Dollars lost annually due to capital flight arising from the importation of various cadres of welding personnel into the country for some unjustifiable reasons.
The road-map to a sustainable and accelerated Nigerian economy lies in the country’s ability to utilise the rich human and natural resources that abound in the country. With a fully utilised economy, Nigeria deserves to be among the league of developed countries in the world such as China, Japan, Britain and even the United States of America.
Nigeria occupies a very important position in Africa in particular, and in the world in general. Whatever affects Nigeria certainly affects the international community. Being among the top seven largest producers of crude oil in the world, and as the revered giant of Africa, Nigeria is indeed in the eyes of the storm.
Nigeria has got all it needs to be well developed; surplus human and natural resources, large production of both food and cash crops and subsequent exports of agricultural products, huge deposit of raw materials, technocrats, the world’s best swimmers in the riverine creeks, world’s athletes that train continuously on Nigeria roads hawking their wares and out-running fast moving vehicles, Nigeria indeed has it all. Nigeria is a country on whom nature had smiled with arable land, temperate climate condition, fertile soil and abundant rainfall.
With the discovery of “black gold” in Oloibiri, Bayelsa State, in 1956, a new phase was opened in the natural resources sector. Various natural resources abound in Nigeria such as limestone, granite, zinc, tin, clay, magnetite, kaolin, as well as deciduous grassland for animal rearing and farming, just to mention a few. In all these, the importance or viability of the Nigerian oil and gas sector cannot be overemphasised. Oil and gas is the solid ground for the production of energy, it is the easiest and most available source of energy in Nigeria, and most important source of energy without which civilisation ceases to exist. Crude oil keeps the wheels of industries running. Brent oil, also known as sweet light oil, is the best type of crude oil. It is the Nigerian type of oil and the cost of processing is cheaper than the other types of oil found in other countries. It also has a high demand worldwide.
But despite all these numerous blessings and excess reservoir of oil and gas, what is hindering Nigeria from being a world giant? According to recent world ranking, Nigeria ranks among the top 25 poorest nations in the world. With a huge deposit of crude oil, a product that is said to be the largest traded commodity and the most versatile in usage, why are the beneficial effects not substantive?
The issue of under-utilisation of resources is one that needs to be tackled. Both human and natural resources are under-utilised, or how else would one explain a situation whereby the country has to export crude oil out of the country to be refined and import such refined products at very exorbitant rate. Corruption is one monster that has eaten deep into the fabrics of the Nigerian economy. Corruption is visible in every field of human endeavour as nothing goes for nothing. Nigeria has got all it needs to boast of a very rich and self-sustaining economy, but yet struggling simply because its resources are not fully utilised and wrongly used due to corruption. This is an obstacle militating against Nigeria’s development. A situation where thousands of engineers abound in the country but Nigeria’s projects are handled by foreign firms is quite ridiculous. Nigeria’s political evolution has suffered so many idiosyncrasies.
The oil and gas industry in Nigeria is very viable. Crude oil is a product that is important to almost everyone in the world. The oil and gas sector alone is enough to continuously sustain the Nigerian economy.
To this end, the Nigerian government, as well as oil and gas experts, should look inward and formulate laws to utilise the prospects and opportunities made available by the oil and gas sector. Nigeria’s various refineries should be up and running optimally. Gas flaring is a huge economic loss and an environmental degrading activity. Oil spillage, pipeline vandalism and crude oil sabotage that lead to economic losses should be curbed. Technocrats should be fully employed in this sector so that the oil and gas industry can be totally harnessed and utilised for the common good of the populace. Nigeria is indeed too rich to be poor, there are great prospects in the oil and gas industry.
Vice President, Professor Yemi Osinbajo has revealed that the federal government is building a Niger Delta that will not just defined by oil and gas, but other human capital resources.
Speaking through his Special Assistant, Mr. Edobor Iyamu, at the first matriculation ceremony of the Nigeria Maritime University, Okerenkoko, Warri South-West council area of Delta state, Saturday, the VP noted that this is part of the development plan mapped out in the New Vision of the Niger Delta (NVND).
Professor Osinbajo stressed that the President Muhammadu Buhari-led government is “serious” about the happenings in the oil-rich region, hence its embarking on several infrastructural development such as the flagship of the Ogoniland cleanup exercise in Rivers state, the construction of modular refineries, four of which are at varying levels of completion across the region, as well as the gas flare commercialization programme aimed at seeing to the end of gas flaring in the Niger Delta.
Director-General of the Nigerian Maritime Administration and Safety (NIMASA), Mr. Dakuku Peterside emphasized the need for more funds to facilitate infrastructural development for the school. He said: “Work is going on at the permanent site in Okerenkoko. In addition, we are going to hold a number of engagements with the office of the vice president. All of us must work collaboratively to support the success of NMU. Again we need to inject more funds if we want this university to stand and take off on a solid note.”
Acting Governor of Delta state, Barr. Kingsley Otuaro while commending all stakeholders for ensuring the establishment of NMU, noted its fruition is a collective aspiration of the Gbaramatu kingdom and people of the Niger Delta. Vice Chancellor, Engr. Professor Maureen Etebu urged the students to strive for excellence.
She recalled the efforts made by various entities, including the Vice president and the Minister of Petroleum Resources, Dr. Ibe Kachikwu, to ensure the establishment of the learning citadel.
