The urgent need for the long-awaited reforms in the Nigerian oil and gas sector was the subject of discussion by experts in a conference jointly organised by the Nigeria Natural Resources Charter, NNRC, a non-profit organization in collaboration with OrderPaper Advocacy Initiative, OAI. The event hosted key players in Nigeria’s petroleum sector who gathered to promote reforms that will make the country’s hydrocarbon resources beneficial to Nigeria and her citizenry.
The programme which focused on the implications of the country not embracing reforms, had Tengi George-Ikoli, programme coordinator, NNRC, emphasised the importance of the petroleum sector to Nigeria’s economy. She blamed the country’s inability to finance its budget and service its debt to the country inability to reform the oil sector for the good of Nigerian masses.
She said that Nigeria will be positioned for economic recovery and growth when her economy is diversified with less dependence on oil and gas. “Concerns have continued to mount over prevailing uncertainty around the stalemated reforms in Nigeria’s oil and gas industry, which many believe has a negative impact on the economy with increasing investor flight and a continually dwindling resource base for Nigeria,” she said.
The conference which was organized by the Development Dialogue Series (DDS) and OrderPaper Advocacy, non-governmental organisations, focused on policy and legislative engagements that seek to promote good governance and instituting democratic practices in Nigeria.
The Executive Director, OrderPaper, Oke Epia, said: “It is against the backdrop of the ding-dong affair between the National Assembly and President Muhammadu Buhari on the Petroleum Industry and Governance Bill, PIGB, which was recently passed again by the former after an initial rejection by the latter. It will determine ways to engage with the Federal Government on alternative reforms for the sector.”
Wumi Iledare, a professor, and vice president, training, research and development at the International Institute for Petroleum, Energy Law, and Policy, IIPELP at the University of Port Harcourt, and a keynote speaker at the event, said that the country has lost substantial revenue due obsolete laws guiding the operations of the industry. He said that the call for petroleum sector reforms is to block wastage and leakages of revenues and resources.
In its 2017 Benchmarking Exercise Report, BER, NNRC stated that the combined effect of low transparency and accountability, ineffective corporate governance, and commercial ineffectiveness among others may explain Nigeria National Petroleum Corporation’s (NNPC) inability to attract sufficient funds and have a workable funding mechanism for its operations over the years.
It further stated that a successful financial drive for NNPC strongly hinges on restructuring and strategic positioning that imbibes unalloyed transparency and accountability on one hand, and commercial effectiveness on the other. Adding that transparent operation in NNPC would foster investors’ confidence in the nation’s oil and gas sector.
Subsequently, the Report recommended that the government/NNPC should allocate resources more efficiently, stressing that NNPC should invest resources in income-generating activities such as the rehabilitation and effective management of existing refineries rather than the huge fund government commits on subsidies. The report also stated that a good corporate governance system will promote sound business judgment, reduce the influence of narrow political interests and allow for predictable planning. And that it would also make NNPC reduce losses and unlock investments to cover financing shortfalls, by adopting an effective corporate governance system that reduces political interference, prioritizes commercial objectives of the corporation, and enhance financial and operational efficiency. Stressing that the reform in ownership structure proposed in the PIGB is a step towards achieving this by encouraging private participation.
Speakers at the event include Dr. Adeoye Adefulu, partner/head, Odujinrin Adefulu’s Energy Practice , Henry Adigun of the Facility for Oil Sector Transformation (FOSTER), Israel Aye, founding and managing partner of Primera Africa Legal, Olufemi Dawole of Depots and Petroleum Products Marketers Association of Nigeria, DAPPMAN, and Joseph Nwaukwe, a renowned expert in the oil and gas sector.