19 March 2014, Abuja – The Federal Government, yesterday, disclosed that the steps it took to alleviate the sufferings of Nigerians during the period of fuel scarcity helped save the country from plunging into a crisis situation.
Speaking during the Nigerian Oil and Gas, NOG, conference, in Abuja yesterday, Mrs. Diezani Alison-Madueke, Minister of Petroleum Resources, emphasised that the scarcity was caused by sabotage, diversion, hoarding, panic buying and rumours of imminent pump price increase.
She noted that the Federal Government will soon focus on reforming the downstream sub-sector, saying that government control of the sector has had an unpleasant impact on the economic fortunes of the country.
According to her, the subsidy policy cannot be sustained any longer because it did not benefit the poor it was targeting but rather it is benefiting the rich.
According to her, “The industry needs to move to the next level by increasing revenue and curbing oil theft and pipeline vandalism.
“The PIB is still with the National Assembly and we hope that it will be passed very soon. However, we have been confronted with the menace of pipeline vandalism for decades and it has become much more prevalent in the last few years.”
Also speaking, Group Managing Director, NNPC, Mr. Andrew Yakubu, said the success of its activities during the period of the scarcity was due to the effective collaboration with other stakeholders in the petroleum sector.
He said, “As you were aware, it is the collaboration of so many stakeholders. We did our bit and what we did as far as NNPC is concerned, is to support the entire country from our own quota. If we didn’t do what we did, we would have been in more crises”.
He said the NNPC collaborated with the independent and major marketers, as well as the Department of Petroleum Resources, DPR, Petroleum Products Pricing and Regulatory Agency, PPPRA, in achieving its aim.
On the planned reform of the downstream sector, Yakubu said the passage of the Petroleum Industry Bill, PIB, will remove the uncertainty surrounding the future fiscal framework in the oil and gas sector.
According to him, the passage of the PIB will promote transparency, accountability and good governance and level the playing field for players in the Nigerian oil industry, adding that this will doubtless attract the much-needed investment in the Nigerian petroleum sector.
Furthermore, the NNPC and the DPR also raised concerns over Nigeria’s declining reserves, saying that efforts should be geared towards growing the country’s crude oil production and reserves.
According to Mr. George Osahon, Director, Department of Petroleum Resources, DPR, the country’ s crude reserves have dropped to about 35 billion barrels of crude, noting that the declining reserves is a major concern to the country, considering the important role played by oil and gas in the economy.
To boost the country’s reserves, according to Osahon, efforts should be made in the development of small or marginal fields, bitumen exploration and exploitation and enhanced recovery methods.
He further stated that Nigeria should focus on frontier exploration in deepwater and inland basin, while regular licensing rounds should be conducted to ensure continued exploration and production activities.
Yakubu, on the other hand, said the quest to grow the country’s reserves should be encouraged, through stemming the scourge of pipeline vandalism and increasing production from small or marginal fields operators, as this will help mitigate production decline from large fields.
He further emphasised the need to attract capital investment in the oil sector, and the need to grow production and revenue by expanding the scope of participation.
– Michael Eboh and Chris Ochayi, Vanguard