Offer Incentives To Boost Oil, Gas Production –Engineering Academy Tells FG

Philip Daniel Yatai
Mar, Fri, 2024

Metro

Offer incentives to boost oil, gas production –Engineering Academy tells FG

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By Angela Atabo

The Nigerian Academy of Engineering (NAEng), has urged the Federal Government to offer incentives to oil and gas producers to increase their production levels.

According to NAEng, the measure, if rigorously pursued, will guarantee added production which can translate to more forex earnings with attendant positive impacts on the nation’s economy.

The NAEng President Prof. Azikiwe Onwualu, made the call at news conference, organised by the NAEng on Friday in Abuja.

“In connection to offering the economic incentives to producers, NAEng also recommends that steps be taken to conclude the approval or otherwise of the acquisition of assets,

“These are assets of existing International Oil Companies (IOCs) by indigenous entities who have negotiated with them.

“Further delay may discourage investment by the new owners and by others who may be interested in bringing in capital’’, he said.

Onwualu said that with respect to the downstream sector,

With respect to the downstream sector, the Academy recommended that government should consider divesting at least 51 per cent of its equity in the refineries, oil marketing and distribution facilities.

He said this would provide capital from the private sector for the upgrade of the refineries and also introduce independent governance for efficient operation.

He added that it would also lead to more sustainable high capacity utilisation of the refineries for the good of the nation.

The President said this would further result in foreign exchange savings as reliably operating refineries would provide products for local consumption as well as for export.

“We commend the directives recently given by President Bola Tinubu on Oil and Gas companies tax incentives, exemption, remission order 2024, Reduction of petroleum sector contracting costs and timelines,2024 and Local content compliance requirement.

“They likely to attract interest from both foreign and local investors which will ultimately have a significant impact on the growth of the oil and gas industry and result in major foreign exchange earnings increase for Nigeria.

“When properly and fully implemented, these directives should have a positive impact in the short to medium time frame.

“They are also expected to restore the vibrancy in our oil and gas industry, leading to increased activity levels in the industry’’, he said.

Onwualu further suggested that the government should consider directives on rapid improvement of the gas reserve base so that more of the often-quoted gas volumes would be certified and become bankable.

He said that concerted efforts should also be directed at the exploration for more gas deposits and the appraisal of existing finds.

He said the suggestion was based on the view that gas rather than oil was the internationally preferred source of energy.

The President said that increased activities in the natural gas sub-sector would undoubtedly also fast track the growth of the midstream segment of the petroleum industry and result in high gas utilisation and commercialisation.

“The NAEng believes that the fastest way to achieve economic development of Nigeria is to consciously develop and apply engineering and technological innovations.

“This is towards providing sustainable solutions to problems in different sectors of the economy in a systematic and coordinated manner.

“ The NAEng remains committed to assisting the Nigerian Government to achieve rapid national growth by tackling problems that are amenable to engineering solutions,’’ Onwualu said. (NAN)

Edited by Uche Anunne

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