Economy

NNPC Baru, NEITI’s Adio speak of Nigeria’s potentials

Written by Maritime First

…Fail to provide ‘bridge’ for actualization***

Two highly revered industry gurus, Dr Maikanti Baru of the NNPC, and   NEITI’s Executive Secretary, Waziri Adio on Thursday highlighted some great opportunitIes before the nation, which is currently unharnessed in both the Oil and gas, as well as in the Solid mineral sectors. Ironically, both failed to indicate how their discoveries would be actualized. 

The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr Maikanti Baru noted that over $48 billion investment opportunities were in the Nigerian oil and gas sector.

Baru disclosed this in a statement issued by the NNPC Spokesman, Mr Ndu Ughamadu, in Abuja; urging investors to utilise the over 48 billion dollars investment opportunities available in the upcoming capital projects within Nigeria’s Oil and Gas Industry.

Baru, according to Ughamadu disclosed this at a Panel Session on the topic “Insights on Future Exploration Hotspots: Opportunities for Africa’s Oil & Gas Industry” under the sub-theme “The New Frontier for Africa’s Oil & Gas” at the 2019 International Petroleum (IP) Week conference  in London.

The IP Week is a global oil and gas platform where executives and other energy professionals discuss the big issues affecting the sector.

It is organised annually by the London-based Energy Institute.

Baru said that the NNPC’s Frontier Exploration Service was currently drilling the Kolmani River-2 Well where desktop estimates revealed that about 400 bcf of gas was expected to be encountered.

He stressed that several new frontiers for exploration opportunities abound in Nigeria, even as offshore discoveries in the country had mostly been limited to between 1,000 – 1,500m of water depth. But again, he was silent on what Nigeria was doing to effectively call it into prudent use.

“Beyond these water depths, the new frontiers of ultra-deep waters need to be tested. And that is where we need the investors,” he told the audience.

He noted that unless issues related to Legal and Regulatory uncertainties, lack of infrastructure, skilled manpower shortage, transparency and accountability were addressed among key stakeholders, the continent’s oil and gas industry might not achieve its full potential.

He observed that over 41 billion barrels of oil and 319 trillion cubic feet of gas were yet to be discovered in sub-Saharan Africa alone, while between 2008 and 2017, exploratory success in the sub-region was at least 45 per cent.

According to him, there has been a surge in the capital expenditure (CAPEX) across Africa’s oil and gas sector, with close to 194 billion dollars earmarked to be spent between 2018 and 2025 on 93 upcoming oil and gas fields in Africa.

“Out of this 194 billion dollars , Nigeria accounts for 48.04 billion dollars (over 24.8%) of the total CAPEX coming into upcoming projects in Africa over 2018 to 2025, with over 20 planned projects,” Baru said.

The GMD observed that 23.8 per cent of the CAPEX in Africa would be spent in Mozambique, 11.3 per cent in Angola while about 29.2 per cent would be spent in Tanzania, Senegal, Mauritania, Uganda, Egypt, Algeria and Kenya combined.

Baru noted that with over 14 oil producing countries, Africa currently accounts for 7.5 per cent (barrels of crude oil) and 7.1 per cent (488 Tcf of gas) of global proven oil and gas reserves.

On production, he said the continent accounted for 8.7 per cent (8.1 million barrels per day) of global oil production and 6.1 per cent (21.8 bscfd) of global gas production.

He highlighted further that the continent, consumes 4Million barrels of oil per day and 13.7 bscfd of gas (equivalent to 4.1% and 3.9% of global oil and consumption )

Meanwhile, the Executive Secretary of the Nigeria Extractive Industries Transparency Initiative, (NEITI), Mr. Waziri Adio as noted that the solid mineral sector, which presently is not being tapped to its fullest, has the potential to grow Nigeria’s economy, create jobs and address a number of social issues. Incidentally, he failed to explain how.

Adio made his observation at the launch of a report: ‘Improving Transparency and Governance in Nigeria’s Mining Sector,’ designed to enhance the contribution of the solid minerals sector to Nigeria’s revenue and Gross Domestic Product, (GDP) in Abuja on Thursday.

According to him, NEITI, in launching the report, is seeing how it can bring on board, what needs to be done and how it should be done; and added that NEITI wanted to go beyond audits and do things that would impact lives of the citizenry.

“There is no doubt that Nigeria has lot of potentials in the solid minerals sector, but having potentials is not enough.

“Potentials by itself would not translate to improve revenue for improved fortunes for countries and for its people.

“Our country definitely needs other streams of income, but we are not doing that.

“This sector is one that has all the potentials to generate more revenue for our country, create more jobs for our people, to even expand our industry base. Rather than continue to talk about the problems all the time, we want to do something that would build on ongoing reforms in the sector.

“The Ministry of Mines and Steel Development is doing enormous work to reposition the sector.

“To align with that, we want to see how we can bring certain perspectives, not just on the potentials and problems, which we all know, but what needs to be done and how.” he said.

Presenting the report, the Editorial Consultant and Professor of Geology, University of Ibadan, Mr Gbenga Okunlola, said that in comparison with other countries with similar potential, Nigeria’s mining sector was still largely underdeveloped.

The NEITI report , he said  until recently, when there had been a slight improvement, the mining sector’s contribution to the GDP had not been more than 0.5 per cent, a reversal from the historically higher percentages of about 4-5 per cent in the 1960s and 1970s.

“The misfortune of the solid minerals sector started with the Indigenisation Decree of 1972, which saw massive withdrawal of foreign investments in the mining industry from the country, leaving the bulk of private sector mining operations in the hands of small scale local miners.

“These factors were largely responsible for production decline in the sector, particularly in the metallic minerals sub-sectors, starting in the late 1970s.

“The report indicated that the mining industry had the potential to sharply contribute to the country’s GDP, but was currently under-performing, responsible for 0.33 per cent of employment in Nigeria, 0.02 per cent of the country’s exports and 0.3 per cent of the country’s GDP, ” he quoted the report.

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Maritime First