GDP : Oil sector dropped behind Agriculture, Trade, Telecommunications, others says Simbi
The oil sector has steadily dropped behind Agriculture, Trade, Telecommunications/ICT, and Real Estate in terms of sectors to the contribution to the nation’s Gross Domestic Product (GDP) .
This position was made known by the Executive Secretary of the Nigerian Content Development and Monitoring Board(NCDMB) Engr Simbi Wabote in a welcome address at the ongoing Nigerian Oil and Gas Opportunity Fair (NOGOF) in Yenagoa, Bayelsa State.
According to him “these are signs of a dying sector, and we must all join hands to stop the decline so that we can return oil and gas contribution to GDP to double digits levels similar to other major oil producing countries”
Engr Simbi also noted that “for instance, Norway has doubled its GDP in the last 2 years from $171.2 Billion to $367 Billion with the oil and gas sector contributing about 20% followed by their hydropower.
“Although Norway is in a different clime from Nigeria, we share some similarities when we look at the huge deposits of natural resources coupled with a skilled labour force and the adoption of new technology that made Norway a prosperous country during the twentieth and twenty-first centuries.”
He urged the industry stakeholders to to take opportunities of the NOGOF to increase productivity in the oil and gas sector.
He also revealed that the NCDMB has trained youths and offered financial support to companies with the aim of empowering them to enhance their capacities.
On the NOGOF , he said “we have designed NOGOF with the following objectives in mind:
a. Showcase opportunities in the Upstream, Midstream and Downstream sectors of the Petroleum Industry
b. Provide opportunity for foreign and local investors to build synergies in the Nigerian oil and gas industry.
c. Provide Nigerian companies and prospective investors an opportunity to showcase their capabilities.
d. Provide stakeholders with information on upcoming projects to enable Nigerian companies/manufacturers tailor their business development strategies.
e. Identify high impact activities with potential for in-country value addition with a 5-year outlook to deepen the practice of Nigerian Content.”
Executive Secretary noted that “ in view of these objectives, let me share five (5) broad categories of opportunities which I would like to highlight in this welcome address as we prepare to go into the various opportunity and technical sessions today and tomorrow.
These categories are:
• Policy Driven Opportunities
• People Driven Opportunities
• Fund Driven Opportunities
• Infrastructure Driven Opportunities and
• Situational Opportunities
. “Opportunities driven by policies, guidelines, regulations, and statutes are attractive to investors as there is clarity on the framework governing their business endeavours.
“Several policies have been formulated and implemented by the Government in their quest to stimulate economic growth and development.
“For instance, in 2021, Mr President declared the Decade of Gas which among others seek to stimulate the development and utilization of gas resources for increased domestic utilization and export towards generating more revenue for the nation.
“Other policies such as the automotive gas policy advocates for the use of CNG as an alternative fuel for vehicles and this has also created a vista of opportunities in the supply and installation of conversion kits in vehicles to enable it use of CNG.
“Several industries have also installed kits to enable their power generating plants to utilize CNG and in some cases LNG instead of diesel to manage cost.
“These policy initiatives have led to creation of several businesses and a surge in local utilisation of gas. For example, the annual consumption of LPG increased from 360,000tonnes in 2015 to 1.4million tonnes in 2022.
“While this growth is commendable, it is instructive to note that about half of the local LPG requirement is imported. In addition, the consumption level is still far below the 4million tonnes consumption by the year 2025 as targeted by the National Gas Expansion Program (NGEP)
“These gaps in volumes and consumption spread present opportunities in local processing, storage depots, trucking, cylinders manufacturing, distribution pipelines, conversion kits, and many other opportunities.
“The Nigerian Gas Flare Commercialisation Programme (NGFCP) is another policy that is aimed at promoting the development and utilization of gas. It also focuses on reducing greenhouse gas emissions in line with global efforts which are aimed at addressing climate change.
“The key thing to note here is that every policy, regulation, or statute holds an array of opportunities that can be harnessed and utilized to achieve significant benefits.
“The Petroleum Industry Act (PIA) 2021, is one of the most audacious attempts that have been made to overhaul our petroleum sector.
“The Act has now provided investors with more clarity on the business environment, and it is expected that the 2-year-old PIA will soon start to yield the desired results.
:The NOGICD Act (2010) provides opportunity to investors by stating in Sections 3 and 12 of the Act that First Consideration shall be given to Nigerian goods and services by operators and their contractors in the implementation of their projects.
“The African Continental Free Trade Area (AfCFTA) is another broad-based policy that provides opportunities for the oil and gas industry in Nigeria.
“The AfCFTA creates the single largest Free Trade market in the world for goods and services in Africa, and this has numerous opportunities including market, sources of raw materials, export of manpower, etc.
In his remarks as the Special Guest Bayelsa State Governor, Senator Duoye Diri, said the Niger Delta region is still unhappy with the three per cent allocation of the operating cost of oil companies to host communities, provided in the Petroleum Industry Act (2022).
This is as he said that the region that produces ‘the golden egg’ must not be allowed to be in jeopardy.
The governor was represented by the Commissioner for Mineral Resources, Dr Ebiere Jones.
He noted that the PIA ‘did not pay attention to the role of state governments in the realisation of the Act’.
“The authorities are only saying it that details will be in the regulations. But, I don’t know whether the regulation is superior to the Act itself.
“As the state government, we are ensuring that we provide a conducive environment for the operators in the oil and gas industry.
“When we organise youth programmes, they are tailored in a way that these youths understand the need for collaboration in the oil companies. This is because, without that, there can never be prosperity. The oil industry is the major focus of the economy,” he said.
He also stated that the last three years in the state were more peaceful than the previous three because of the efforts of the State government.
“We also want to appreciate the Federal Government and the National Assembly for the PIA.
“However, the Act is cued in a way that the people from the Niger Delta are not happy. That it is only three per cent of overheads that has been allocated to oil-producing communities, while a whopping 30 per cent of NNPCL profits in oil and gas will be going for exploration of frontier basin areas.
“There are a lot of issues that Mr Simbi Wabote, the Executive Secretary of the Nigeria Content Development and Monitoring Board mentioned in terms of opportunities but, we must ensure that whatever opportunities we have are tailored towards the energy needs of the country.”
He went further to say that the implementation programmes were taking time, adding that it was only the Shell Petroleum Development Company that has assured the host community of their community development trust fund.
“We think that as a government, the implementation is slow. This is because you have deprived those little development industries of these opportunities,” he added.
The fair is continued on the third day with technical sessions ..
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