The Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Mr. Simbi Wabote, has said that the pull back of investments on hydrocarbon development projects by the oil majors and international financial institutions “is indeed a challenge for oil producing countries such as Nigeria”.Speaking at the 9th Anniversary Lecture of Realnews magazine on Thursday in Lagos, Wabote noted that revenues obtained from the sale of the hydrocarbon resources would remain “key drivers of the economies of the African oil and gas producing countries”.
Delivering the lecture entitled “Nigeria in the Unfolding Integration of the African Market: The Oil and Gas Perspective”, Wabote stated that Africa’s industrialization agenda is at the heart of the African Continental Free Trade Agreement (AFCFTA) and fossil fuels remains a very significant part of the energy mix required for industrializing the continent.
Wabote explained that resolving the impending challenge of investments in the oil and gas industry are the key areas of focus that can be used to address this challenge, include the collaborative platform provided by AFCFTA to provide funding and the technology required to operate and develop hydrocarbon projects.
“The second is to have in place an investment-friendly law such as the Petroleum Industry Act (PIA) 2021. This will come in handy to attract much needed funds for project developments when the effect of the premature halting of new hydrocarbon projects lead to supply shortages with attendant unbearable price hikes,” he said.
According to him, there is the need to increase in-country hydrocarbon resource utilization. “For crude oil, this can be realized through massive refining and production of petrochemicals.
“In realization of the enormous prospects that gas holds as a cleaner, more efficient fuel in Nigeria, President Muhammadu Buhari declared year 2021 to 2031 as the Decade of Gas.
“As variously espoused by President Buhari and the Minister of State for Petroleum Resources, Chief Timipre Sylva, at various fora, the future of Nigeria’s hydrocarbon industry is in GAS.
“Thus, I am extremely pleased that the Ministry of Petroleum Resources, under the sterling leadership of President Muhammadu Buhari and the Honorable Minister of State for Petroleum Resources, have commenced implementation of several initiatives that seeks to develop the gas sector in line with the ‘’Decade of Gas” declaration.
He disclosed that the Africa’s oil map reveals the rapid spread of the discovery of hydrocarbon, especially in the last two decades. “Between 2005 and 2015 alone, we had Ghana, Sierra Leone, Liberia, Mozambique, Kenya, Tanzania, and Senegal as new additions to the league of countries with hydrocarbon resources. Evidently, Africa is practically sitting in oil and gas reservoirs.
“In this year alone, Namibia announced discovery of 120 billion barrels of oil comparable to the Permian Basin in Texas, USA. Other discoveries include the 2 billion barrels discovered in Cote D’Ivoire, 700million barrels in Ghana, and 250million barrels in Angola.
“With proven crude oil reserve of 37 billion barrels of oil which is the 11th largest in the world and proven gas reserve of 206 TCF, which is the 9th largest in the world, Nigeria is also well known as a strategic player in the global oil and gas industry.
He added that it is estimated that even if the current gas consumption level in Nigeria is doubled, the gas reserves could still last for 50 years and that Nigeria is highly dependent on revenues from the oil and gas industry to power its economy.
With the huge existing, newly discovered, and the yet to be discovered hydrocarbon resources across the African continent, it is pertinent to evaluate the implication of the unfolding integration of African market on the Nigerian oil and gas industry.
On the 1st of January 2021, the whole of Africa became one single market courtesy of the AfCFTA effectively creating the world’s largest free trade area connecting 1.3billion people on the continent with a combined GDP of about $3.4trillion.
The agreement is meant to address the low intra-regional trade in Africa estimated at 17% compared to 69% obtainable in Europe and 59% obtainable in Asia.
Some of the key thrusts and targeted benefits of AFCFTA include: Free movement of people, goods, and capital, removal of tariff and non-tariff trade barriers, investing in cross-border infrastructure, streamlining trade, investment, and monetary policies.
According to him, AFCFTA remains a game changer in turning the fortunes of the continent around as the economic and social benefits cut across multiple sectors such as trade, education, health, finance, agriculture, transportation, manufacturing, and even the oil and gas industry.