THE GROWTH OF OIL AND GAS SECTOR IN NIGERIA UNDER THE BUHARI ADMINISTRATION

Since the discovery of crude oil in Nigeria’s riverine community of Oloibiri in Bayelsa State in 1956, multinational corporations have largely dominated the sector until the early 1990s when some Nigerian companies began to make inroads into the industry.

Nigeria, which is reputed to be Africa’s main oil producer and eleventh largest worldwide, currently enjoys a total pipeline grid of Five thousand and one Kilometers, while average daily production as at first quarter of 2023 stands at 1.6 million barrels.

Previous governments and administrations, however, deemed it fit to boost local participation with the implementation of the Nigerian Content Directives by the Nigerian National Petroleum Corporation (NNPC) about a decade ago, and eventually, by the promulgation of the Nigerian Oil and Gas Industry Content Development Act in 2010, which sought to promote the use of Nigerian companies and resources in the award of oil licenses, contracts and projects.

President Muhammadu Buhari, on assumption of office in 2015, took steps to confront the challenges facing the oil and gas sector in Nigeria by embarking on major reforms to address the challenge of funding bedeviling the oil sector.

Next was the passage of the Petroleum Industry Bill (PIA) into law in 2021 after many decades of debates and stalemates.

The Act made provision for good governance and accountability in the Industry as well as the creation of a commercially oriented National Petroleum Company and fostering a conducive business environment for Petroleum exploration operations.

Many key players in the industry judged this singular act as the administration’s biggest achievement in the energy sector.

Through the instrumentality of the Petroleum Industry Act, PIA, government was able to scrap the existing agencies and replaced them with new regulators, while the Nigerian National Petroleum Company Limited (NNPC) transformed to a limited liability Company.

By so doing, the NNPC with a new brand identity became the biggest, most capitalized and most profitable company in the whole of Africa.

In the natural gas sector, President Buhari’s administration pushed for the diversification of the economy and drove industrialization through domestic gas utilization, thereby officially declaring natural gas as Nigeria’s transition fuel.

This initiative heralded the launch of the National Gas Transportation Network Code, a set of rules guiding the use of gas transportation system, the Nigerian Gas Flare Commercialization Programme, as well as the declaration of January 1, 2021 to December 31, 2030 as Nigeria’s ‘Decade of Gas’.

The administration kicked started the $2.8 billion Dollars Ajaokuta–Kaduna–Kano (AKK) natural gas pipeline project. The AKK project is expected to transport up to 3,500 million cubic feet of gas a day from various gas-gathering projects and help to generate 3.6 gigawatts of power and support gas-based industries along the route when completed.

The private sector is actively involved in this drive by the Buhari administration to engender a lasting legacy in the industry by ensuring the emplacement of an attractive framework for the indigenous companies to take advantage of divestment by International Oil Companies’ assets. This move did not only ensure that the indigenous companies grew their capacity, they are now accountable for about 30 percent of national oil and gas production up from just about 2 percent in 2010.

On the issue of ease of doing business in Nigeria, the Buhari’s administration created a conducive environment for businesses to thrive as many businesses came on stream in the life of the administration. One of such is the $5 billion Dollar NLNG Train 7 project, which is one of the most ambitious construction projects in Nigeria.

Upon completion, the Nigeria LNG Train 7 project will increase the NLNG Terminal production capacity by 35 per cent from the current 22 Metric Tons per annum to 30 Metric Tons.

The Dangote Refinery, Africa’s biggest oil refinery and the world’s biggest single- train petroleum facility is also forming part of the administration’s testimonial.

The Dangote Refinery will process 650,000 barrels of crude oil per day, which will help Nigeria become a global destination in oil refining.

Aside from the big refineries, many modular refineries also came on stream and are up and running.

When the Buhari administration assumed office seven years ago, it identified the need for the development of the downstream sector, and has succeeded in monitoring and tracking of product distribution to check the menace of petroleum product diversion. This led to the relaunching of “Project White’’, an initiative geared towards monitoring and tracking of petroleum product distribution nationwide.

In the area of crude oil theft and pipeline vandalism which was a menace that bedeviled the industry, plummeting the overall crude oil output and revenue, the Buhari administration ensured that contracts for pipeline surveillance and security were signed with relevant authorities.  This led to the recovery of an appreciable quantity of stolen crude and the seizure of many vessels involved in such illegal activities in the Niger Delta area.

For the first time in 44 years, the NNPC recorded 287 billion naira in profit after tax, a major feat achieved by the Buhari administration.

Niger-Delta communities, just like the goose that lays the golden egg, require more attention in terms of infrastructure and environmental regeneration. This is due to the high incidence of oil spill mostly done by the International Oil Companies operating in those areas.

To address this, the government made spirited efforts at resolving the problems with the commencement of the Amnesty Program under which most of the Niger Delta youths were rehabilitated and sent outside the country for training and capacity building thereby bringing relative peace to the region.

However, more needs to be done in cleaning up the environment especially the Ogoni areas, worst hit by oil spillages and the consequent environmental hazards.

Attention should also be given to the provision of social amenities such as schools, hospitals, skill acquisition and recreational centers. These will no doubt help in making the environment stable, habitable and the youths meaningfully and gainfully employed for lasting peace and development.