Stakeholders poke holes in Nigeria’s push for hydrocarbon maximization | The Guardian Nigeria News


• Insisting on investing in pioneering exploration can backfire
Stakeholders from the Natural Resource Governance Institute (NRGI) are concerned about Nigeria’s reliance on the oil and gas sector, warning that the federation’s current efforts to continue exploring oil and gas resources against the abandonment of fossil fuels remain imperfect.

NRGI, in a new report entitled “Ending Nigeria’s Oil Dependency: Not If, But When…and How”, made available to the Guardian, insisted that the Federal Government’s short-term plans to maximize oil oil and gas presented obvious challenges.

NRGI also said that rehabilitation of refineries, investments in the Dangote refinery, frontier exploration and payment of fuel subsidies could jeopardize Nigeria’s future if alternative costs are not properly assessed.

NRGI’s West Africa (Anglophone) Regional Director, Nafi Chinery, and NRGI’s Senior Nigerian Program Governance Officer, Tengi George Ikoli, said in the report that investments in frontier explorations, as provided by the Petroleum Industry Act (PIA), could pose certain risks in the event of a lockdown. income that may not produce the desired returns.

Despite being one of the major oil and gas producing countries, revenues from Nigeria’s sector have done little to improve infrastructure development and the standard of living of citizens. Instead of improving, the states and federal government would be close to bankruptcy, as borrowing was already hovering around 50 trillion naira and the country remained one of the countries with the highest number of poor people.

As the rest of the world shifts away from fossil fuels, Nigeria, like other African leaders, has insisted on continued exploration for hydrocarbon resources, saying the focus will shift to gas resources.

The NGRI, while noting that gas as a “transitional fuel” requires large capital investments and needs more time to generate benefits, said Nigeria needed a plan and a clear path on how it intended to transition to other energy options with traceable milestones.

“Furthermore, while natural gas exports are expected to supplement foreign exchange earnings from oil in the near term, lower long-term investment may mean that these gains will not last.

“Buffers need to be put in place to account for this, otherwise increasing investment in cleaner fuels could put natural gas projects at risk of becoming ‘stranded assets’ – with revenues sinking before realizing any It is critical that the federal government make strategic spending decisions, as the role of oil in meeting global energy demand continually declines over time,” the stakeholders said.

Calling for urgent action to diversify away from oil and gas, the NGRI noted the difficulty Nigeria faces in meeting its production targets, divestment by international oil companies as importers of Nigerian petroleum products also seek greener options.

According to the report, the federal government should accelerate revenue diversification through trade and domestic production, leveraging other sources of foreign currency.

He said it was possible to attract foreign exchange earnings by supporting catalysts that add greater value to local products, providing greater support to the manufacturing sector, developing Nigeria’s critical minerals in the mining sector to leverage the green economy, boosting regional trade through the African Continental Free Trade Agreement (AfCFTA) 2020.

The report also called on the Federal Ministry of Finance, Budget and National Planning to design a comprehensive and inclusive plan with concrete and measurable milestones in collaboration with relevant ministries, departments and agencies that takes into account the Nigerian context and takes into account both risks and opportunities to reduce dependence on oil. This plan must then be implemented collaboratively.

“Nigerians should be asked for advice on the best approach to weaning the country from its dependence on oil. They should agree on a timetable and pace of reform, and identify priority areas of interest.

“In the upcoming 2023 election campaigns, presidential and gubernatorial candidates; oil-producing states, in particular, must be held by citizens to set out plans to build fiscal resilience away from oil dependency. Civil society, accountability actors and the public must maintain dialogue and make economic diversification a major theme of the 2023 elections – on the campaign trail, in candidate pledges and party platforms,” the report notes. .

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