Under the terms of the policy, which was approved last week, the Federal Government will ensure timely and competitive access to petroleum assets, to ensure optimum exploration, development and commercialisation of Nigeria’s oil and gas endowment.
In efforts to douse restiveness in the oil-rich Niger Delta, enhance ownership of hydrocarbon resources, and fast track development in the areas, the Federal Government has promised to ensure that host communities participated in transparent and competitive licence allocation, albeit through local community vehicle.
This is part of the plans contained in the new National Petroleum Policy, made available to The Guardian, which also assured of creating an enabling business environment along the value chain.
Discontent over the ownership and utilisation of oil wealth since the discovery of oil in commercial quantity in 1956, gave rise to continuous agitations leading to militancy activities to push for resource control and wealth redistribution.
Given the prolonged years of violent confrontations by various groups leading, which saw Nigeria’s crude oil production down to a mere 800,000 barrels per day (bpd) mid-last year from a previous peak of 2.5million bpd. Government was therefore left with no alternative than to negotiate with stakeholders in the Niger Delta with a view to charting a mutually beneficial way forward.
Accordingly, the National Petroleum Policy articulates the vision of the Federal Government of Nigeria for the petroleum sector, sets goals and strategies, promotes a level playing field between state owned enterprises and the private sector.
Under the terms of the policy, which was approved last week, the Federal Government will ensure timely and competitive access to petroleum assets, to ensure optimum exploration, development and commercialisation of Nigeria’s oil and gas endowment.
The policy identified ineffective regulation, Joint Venture funding challenges, high cost operating environment, unsustainable importation of petroleum products, and limited refining capacity as some of the challenges in the Nigeria’s petroleum industry. Others include dilapidated midstream oil network plagued by systemic inefficiencies and vandalism across critical areas.
As a result, the policy will establish the medium to long-term targets for oil reserves growth and utilisation, and record national social-economic development priorities, which would be reviewed and updated periodically to ensure consistency in government policy objectives at all times.
The policy objective for the midstream is to attract as much investment as possible into petroleum refining transportation and storage, and for the downstream, create additional value for Nigeria through refining of oil, and further processing into significant end products for industries such as complex petrochemicals and plastics.
It stated: “Through the policy, the Federal Government seeks to gain more than monetary value for oil. The vision is to ensure oil fuels national development. Government seeks to achieve this by implementing sustainable reforms in the sector taking into cognisance the global dynamics for the petroleum sector and resources, and the peculiarity of the Nigerian petroleum industry.
“The policy recognises the negative impacts of the oil industry to the livelihood and local communities. The government seeks to address these impacts through regulatory measures such as refineries, gas flare commercialisation and community engagement.”
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