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Energy Experts Give Reasons For N’Delta Under-Development

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Some experts in the oil and gas industry have identified style of governance, bad policies and lack of transparency, among the many challenges hindering development of Nigeria’s oil rich Niger Delta.
The experts spoke after a documentary screening on the “Impact of Corruption and Conflict on Investments, in Energy Rich Niger Delta Communities’’, in Abuja, on Friday.
The documentary screening was organised by an NGO, African Initiative for Transparency, Accountability and Responsible Leadership (AfriTAL).
The Tide source reports that the documentary focused on two communities of Ogidigben and Gelegele in Delta and Edo States respectively, where various government projects there failed and the people still live in abject poverty.
Rev. Fr Edward Obi, a catholic priest and an environment activist said the style of governance adopted in the country’s oil sector was unfortunately riddled with holes.
“We are in a country where people sit in their offices and make decisions that affect people without consulting them.
“It is a bad style of governance and it is seriously affecting the environmental regulation of the oil and gas industry,’’ Obi said.
According to him, government has never been transparent in running the oil and gas sector, adding that the communities are hardly involved or educated on government plans.
“Till now, I do not think that government is considering using other voices that the people listen to.
“If you go to these rural communities, you see many churches irrespective of how under developed they are.
“People in these communities go there, they listen and respect what they are taught there, these kind of leaders that teach these people can be used as agents to educate members of the communities on what government’s plans are.
“When the people understand all what government wants to do, the project they plan, the benefits to the community and the people, they will welcome it and the desired results will be achieved.
Dr Solomon Adeleye, another oil and gas expert said that corruption in Nigeria was often perceived as affecting government and governance, but it had never been considered to be adversely affecting communities.
He said that government must adopt a different style to manage the oil and gas sector to enable it drive growth and development.
“Nigeria is more of a gas nation than oil, it is very important that government does not use the same pattern it used in managing crude oil to run the gas sector.
“They must do away with things that made it impossible for government to achieve results and focus on current trends and opportunities to ensure growth and development,’’ Adeleye said.
He said currently, there were about 25 per cent of Nigerians that were unemployed and with three per cent population growth, so efforts must be made to create more jobs especially in the gas sector.
Also, Mrs Faith Nwadisi of Women in Extractive Industry said there was need to bring women on the table while discussing issues in the oil and gas sector.
Referring to the screened documentary, she said that the role of women was not reflected there, noting that women bore 90 per cent of the negative impact of oil on communities.

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No Subsidy In Oil, Gas Sector — NMDPRA

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The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has said there are no subsidies in the oil and gas sector as Nigeria operates a completely deregulated market.
The Director, Public Affairs Department, NMDPRA, George Ene-Italy, made this known in an interview with newsmen, in Abuja, at the Weekend.
Reacting to the recent reports that the Federal Government has removed subsidies or increased the price of Compressed Natural Gas (CBG), Ene-Italy said, “What we have is a baseline price for our gas resources, including CNG as dictated by the Petroleum Industry Act”.
He insisted that as long as the prevailing CNG market price conforms to the baseline, then the pricing is legitimate.
 Furthermore, the Presidential –  Compressed Natural Gas Initiative (P-CNGI) had said that no directive or policy had been issued by the Federal Government to alter CNG pump prices.
The P-CNGI boss, Michael Oluwagbemi, emphasised that the recent pump price adjustments announced by certain operators were purely private-sector decisions and not the outcome of any government directive or policy.
For absolute clarity, it said that while pricing matters fell under the purview of the appropriate regulatory agencies, no directive or policy had been issued by the Federal Government to alter CNG pump prices.
The P-CNGI said its mandate, as directed by President Bola Tinubu, was to catalyse the development of the CNG mobility market and ensure the adoption of a cheaper, cleaner, and more sustainable alternative fuel and diesel nationwide.
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‘Nigeria’s GDP’ll Hit $357bn, If Power Supply Gets To 8,000MW’

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The Managing Director, Financial Derivatives Company Limited (FDC),  Bismarck Rewane, has said that Nigeria’s Gross Domestic Product (GDP) could rise to $357b  if electricity supply would increase from the present 4.500MW to 8,000MW.
Rewane also noted that Nigeria has spent not less than $30 billion in the power sector in 26 years only to increase the country’s power generation by mere 500MW, from 4,500 MW in 1999 to 5,000MW in 2025 though the sector has installed capacity to generate 13,000 MW.
In his presentation at the Lagos Business School (LBS) Executive Breakfast Session, titled “Nigeria Bailout or Lights Out: The Power Sector in a Free Fall”, Rewane insisted that the way out for the power sector that has N4.3 trillion indebtedness to banks would be either a bailout or lights out for Nigeria with its attendant consequences.
He said, “According to the World Bank, a 1.0 per cent increase in electricity consumption is associated with a 0.5 to 0.6 per cent rise in GDP.
“If power supply rises to 8000MW, from current 4500MW, the bailout shifts money from government into investment, raising consumption and productivity. And, due to multiplier effects, GDP could rise to $357 billion.”
The FDC’s Chief Executive said “in the last 30 years, Nigeria has invested not less than $30 billon to solve an intractable power supply problem.
“The initiatives, which started in 1999 when the power generated from the grid was as low as 4,500MW, have proved to be a failure at best.
“Twenty-six years later, and after five presidential administrations, the country is still generating 5,000MW. Nigeria is ranked as being in the lowest percentile of electricity per capita in the world.
“The way out is a bailout, or it is lights out for Nigeria”, he warned.
He traced the origin of the huge debts of the power sector to its privatisation under President Goodluck Jonathan’s administration, when many of the investors thought they had hit a jackpot, only to find out to their consternation that they had bought a poisoned chalice.
Rewane, who defined a bailout as “injection of money into a business or institution that would otherwise face an imminent collapse”, noted that the bailout may be injected as loans, subsidies, guarantees or equity for the purpose of stabilising markets, protect jobs and restore confidence.
He said, “The President has promised to consider a financial bailout for the Gencos and Discos. With a total indebtedness of N4.3 trillion to the banking system, the debt has shackled growth in the sector.”
Rewane warned that without implementing the bailouts for the power sector, the GENCOs and DISCOs would shut down at the risk of nationwide blackout.
Rewane, however, noted that implementing a bailout for the power sector could have a positive effect on the country’s economy if Nigeria’s actual power generation could rise from today’s 4,500 MW to around 8,000 and 10,000 MW.
The immediate gains, according to him, would include improved power generation and distribution capacity, more reliable electricity supply to homes and businesses as well as cost reflective tariffs.
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NEITI Blames Oil, Gas Sector Theft On Mass Layoff 

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The Nigeria Extractive Industries Transparency Initiative (NEITI) has blamed the increasing crude oil theft across the nation on the persistent layoff of skilled workers in the oil and gas sector.
The Executive Secretary, NEITI, Orji Ogbonnaya Orji, stated this during an interview with newsmen in Abuja.
Orji said from investigations, many of the retrenched workers, who possess rare technical skills in pipeline management and welding, often turn to illicit networks that steal crude from pipelines and offshore facilities.
In his words, “You can’t steal oil without skill. The pipelines are sometimes deep underwater. Nigerians trained in welding and pipeline management get laid off, and when they are jobless, they become available to those who want to steal crude”.
He explained that oil theft requires extraordinary expertise and is not the work of “ordinary people in the creeks”, stressing that most of those involved were once trained by the same industry they now undermine.
According to him, many retrenched workers have formed consortia and offer their services to oil thieves, further complicating efforts to secure production facilities.
“This is why we told the Nigerian Content Development and Monitoring Board (NCDMB) to take this seriously. The laying off of skilled labour in oil and gas must stop”, he added.
While noting that oil theft has reduced in recent times due to tighter security coordination, Orji warned, however, that the failure to address its root causes, including unemployment among technically trained oil workers would continue to expose the country to losses.
According to him, between 2021 and 2023, Nigeria lost 687.65 million barrels of crude to theft, according to NEITI’s latest report. Orji said though theft dropped by 73 per cent in 2023, with 7.6 million barrels stolen compared to 36.6 million barrels in 2022, the figure still translates to billions of dollars in lost revenues.
Orji emphasised that beyond revenue, crude oil theft also undermines national security, as proceeds are used to finance terrorism and money laundering.
“It’s more expensive to keep losing crude than to build the kind of monitoring infrastructure Saudi Arabia has. Nigeria has what it takes to do the same”, he stated.
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