The decision by the Federal Government of Nigeria to scrap the country’s National Oil Company (NNPC), and rather create NNPC Limited has been hailed by Dr Jide Agunbiade, a Director at National Oilwell Varco, the largest oil and gas equipment manufacturing company in the world headquartered in Houston Texas, USA.
President Muhammadu Buhari, on September 2020, proposed the scrapping of the NNPC for the creation of NNPC Limited, in the new Petroleum Industry Bill 2020 submitted to the National Assembly.
Sharing his opinion on the Nigerian Petroleum Industry in an article, Dr Agunbiade, who has over 20 years’ experience in the global oil and gas company, was hopeful that the creation of NNPC Limited would mark a turning point for the petroleum industry in Nigeria.
In his view, he said that the challenges that the sector has faced for many years would be addressed and remedied through that.
Nigeria Accelerates Plans To Encourage Downstream Investment
According to him, an assessment of the Nigerian petroleum industry revealed that the NNPC has been one of the inefficient government institutions in Nigeria, with heavy political interference, ambiguities, corruption and nepotism.
“Recent investigations and probes into government corruption in Nigeria reveals that a substantial part of governments’ corruption, originates from the activities that relate to the management of the oil and gas proceeds, supposed to be channeled towards the growth and development of the nation.”
He argued that despite the monetary resources remitted to its coffers, NNPC had since been facing challenges in funding its upstream operations and obligations.
“NNPC has also failed to effectively manage the downstream sector, which is characterised by moribund refineries, scarcities, inconsistent and uncompetitive fuel prices. Despite the abundance of petroleum commodities in Nigeria, the country’s largest import is from the petroleum products, which increases the supply and reduces the value of the Naira in the foreign currency market,” he said.
“Consequently, NNPC has lost its international goodwill because of its inconsistency and political interferences, and this has caused doubt and high business risk in the Nigerian oil industry.
“Though an oil rich country, Nigeria is the world’s headquarters of poverty, which explains further the poor management of the oil resources in the country.
“Nigerian petroleum industry has also been negatively impacted by a number of external factors such as a surplus of global crude supply, leading to global oil price decline, competition from renewable energy, the devastating impact of the Covid-19 pandemic on the global oil economy, as well as the 2020 fracturing of the OPEC+ alliance (with Russia) leading to a sharp decline in oil prices in 2020. Many of these challenges, though near to medium term, have the potential to continue for the longer term,” he concluded.
Source:www.energynewsafrica.com
