Nigeria Needs Over $40 Billion Or N8.0 Trillion To Rapidly Diversify Her Export In Order To Arrest Long Term Impact Of Declining Oil Prices On Her Economy.
Nigeria needs over $40 billion or N8.0 trillion to rapidly diversify her export in order to arrest long term impact of the declining oil prices on her economy, declare participants at the 2015 panel session on Nigerian gas industry. The panel session was organized by the Petroleum Technology Association of Nigeria (PETAN) during the ongoing Offshore Technology Conference (OTC) in Houston, Texas, United States. Whereas government calls on investors to take advantage of policy incentives in the gas sector to lead investments in diversification, operators in the industry demand government to guarantee fiscal clarity, policy and regulatory frameworks as well as adequate response to joint venture cash calls in order for the industry to meet set targets in the petroleum industry.
According to the Group Executive Director in charge of Gas and Power at the Nigerian National Petroleum Corporation (NNPC), Dr. David Ige, the nation is to brace for annual $10 billion drop in revenue, a situation, according to him, would leave a long term dent on the economy. He however pointed out that while oil and gas exporting countries lament the fall in prices, industrialized nations that depend o imported fuel have turned out to be the biggest beneficiaries of oil oversupply and associated price fall. For industrialized countries, he said, oil and gas have become abundant at cheaper prices as required for greater economic performance. Dr. Ige said that government’s gas programmes as captured in the Nigerian Gas Masterplan targets to position Nigeria’s industrial sector to transform the low oil and gas price regime to economic growth advantage.
For Nigeria to escape the wave of price swings in the oil market, he said, the country must diversify its exports by converting her huge natural gas resources to industrial raw materials and finished products. The volume of investments required to make the country a hub for petrochemical, plastic and fertilizer industries would require the country to save about $40 billion annually for export diversification. With the right investments under the prevailing incentives for gas monetization, he said, industries like steel, power, cement and fertilizer, petrochemicals and others will contribute to the nation’s gross domestic product growth by over six percent annually. He declared that the Nigerian gas industry still needed infrastructural and supply development in order to meet to projected demand, explaining that new gas lines are required to link emerging demand centres across the country.The infrastructural deficits in the nation’s gas industry, he pointed out, presents huge commercial opportunities for investors in the Nigerian gas environment.