Diezani-Alison-MaduNigeria has only seven years to know if it can achieve the ambition of becoming one of the 20 leading economies in the world.

The Vision 20:2020 is Nigeria’s long term development goal designed to propel the country to the league of the top 20 economies of the world by 2020.

Attainment of the vision is expected to enable the country achieve a high standard of living for its citizens and the oil and gas sector was identified as major contributor to the attainment of the ambitious goal.

According to the National Technical Working Group on Energy sector, for the country’s oil and gas to contribute significantly to the dream of becoming a major player in the global economy, the challenges facing the sector need to be tackled.

The group identified insecurity in the Niger Delta; infrastructural deficiency; shortage of qualified manpower and low indigenous participants as some of the challenges that would prevent the oil and gas sector from assisting the country in its quest for greatness.

The working group stated, “given the strong linkages between the various sectors of the economy and the centrality of energy as a major input, it is imperative that the security situation in the Niger Delta is addressed.

Infrastructure in all the major energy sub-sectors require attention while existing institutional frameworks need to be reviewed to bring their operations in line with international best practices. Dire shortages of qualified manpower both at higher and lower levels have become the bane of the industry.

“The oil and gas sector for example, has less than 1000 welders. In the entire energy sector, the Nigerian content is low, clearly pointing to its over-reliance on external sources even for some basic inputs.”

Though, many experts believed that the country is far from becoming one of the leading countries in the next seven years, the country’s oil and gas sector is gradually moving towards tackling some of the challenges identified by the energy technical working group on Vision 20:2020.

For instance, the document had lamented the low participation of indigenous operators in the country’s oil and gas sector, but the Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Ernest Nwapa said that there has been increase of local participation in the petroleum industry.

Nwapa said that due to the increase of indigenous participants in the petroleum industry, over 30,000 jobs have been created for Nigerians and several contracts awarded in the last few years.

He said that the implementation of the Act, has saved Nigeria a capital flight of about $380 billion and a job loss of two million in the oil and gas sector.

Corroborating Nwapa, the Minister of Petroleum Resources, Diezani Allison-Madueke, stated that there have been unprecedented local investments in infrastructure in the industry.

She stated, “marine vessels of various categories wholly owned by Nigerians increased from 54 in 2011 to 180 by the end of 2012. These vessels are category one type, while vessel categorisation scheme of the NCDMB made more Nigerian owned category two vessels and increased the number of Nigerian owned vessels to 208 in the first quarter of 2013.

“There have been investments in reception, storage and distribution facilities, for instance jetties, depots, trucks, vessels and modern retail outlets, an effort that has led to above 18 days PMS sufficiency.

“We have recorded an increased asset in land, swamp and offshore rigs which is a key performance indicator in business growth in Nigeria service companies. Nigeria companies are forming partnerships for deep-water rig ownership and have put in place strategy that will increase rig ownership from the current 26 to 31 by 2013.

“Indigenous investment in critical oil and gas infrastructure is creating employment for 30,000 for Nigerians, creating wealth and increasing our technical know-how for technology transfer.

“There has been an upgrade of fabrication yard which has led to new capabilities in the industry. Nigerdock fabricated and completed the Abang and Itut oil production platforms using 100 per cent Nigerian engineering and fabrication. Total investment in facilities upgrade is estimated at above $2 billion and has generated over 10,000 jobs”.

In tackling the challenge of qualified manpower, Diezani noted that with the passage of the Nigerian Content law in 2010 and the enforcement of its provisions on expatriate quota management by NCDB, in collaboration with the Ministry of Petroleum, there has been significant growth in Nigerianised position among the operating companies.

She disclosed, “the National Centre for Skills Development & Training has been established in Port-Harcourt. There has been an upgrade of the Petroleum Training Institute, Effurun, Delta State and we have established Federal Polytechnics of Oil and Gas in Ekowe and Bonny.

“Others are the establishment of the National Institute of Petroleum Policy and Strategy (NIPPS) in Kaduna, many Universities upgrade programmes and the development of ICT centres in institutions and schools to take care of the manpower needs of the oil and gas sector.

Speaking on the contribution of the ministry of petroleum in achieving vision 20:2020, she said, “Nigeria’s production currently stands at an average of 2.5 million barrels per day and proven reserves of 36 billion barrels are expected to last about forty six years. However, Nigeria has set for itself ambitious targets of achieving 4 million barrels of production by 2020.

“Given that oil and gas projects tend to engender medium-long term gestation periods particularly gas projects, this is the right time to be talking about 2020, because the decisions we make today will shape the outcomes in our 2020 future.

“Nigerian energy infrastructure has been solely financed by government because of the social and economic impact, high investment requirements and long gestation period. Over 5000km of petroleum product and gas pipelines, storage depots, refinery, power generation, transmission and distribution infrastructures were all built through direct government funding.

“Due to competing needs for government resources from other public sector services such as education, health and transportation infrastructure etc. most energy infrastructure development projects should be financed and managed through private sector participation. It is in the light of this that comprehensive energy reforms to fast track the development of energy infrastructure and deregulates the energy market for effective competition and efficient service delivery was embarked upon.

“Financing for downstream energy infrastructure such as gas pipeline is different from financing upstream oil and gas development. The former requires longer-term commitment for service delivery and hence the need for effective legal, regulatory and fiscal framework to ensure level playing field for all stakeholders.”


Information from The Guardian was used in this report.