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Economy & Politics

Post COVID: FG releases new strategic policy for survival of oil sector

The Federal Government has already started making plans for the oil and gas industry post-COVID-19.

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DPR reveals 4 major areas of focus for downstream operations of oil and gas sector, post covid-19, Engr. Sarki Auwalu, Engr. Sarki Auwalu

The Federal Government has started making plans for the oil and gas industry post-COVID-19. This was announced by the Department of Petroleum Resources (DPR) as they released the strategic plan and policy for the survival and success of the industry post-COVID-19.

This was disclosed by the Director/CEO of DPR, Engr. Sarki Auwalu, while delivering a keynote address at the webinar organized by Future Energy Leaders Nigeria (FEL) titled; Nigeria Oil & Gas Sector: Surviving and Thriving Post COVID–19.  In his address, he outlined four key areas the country will focus on to stay afloat despite troubles and threats posed by the coronavirus pandemic to the economy.

The DPR boss said that there is no better time for strategic repositioning and business optimization. He said that there are four ways this can be achieved.

READ MORE: Oil price slump continues as second wave of COVID-19 may crush the oil market

‘’The first which is cost control and management has to do with the realignment of cost of production per barrel as well as corporate, business and financial stewardship’’

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“The second is portfolio rationalization and asset optimization. For this, there would be project Screening and maturation; and Contract renegotiation,”

‘’The third step to achieve strategic repositioning and business optimization is through new business and operational resilience, which include vertical Integration model covering the refineries; operational excellence; and compliance.

“The last in that stage is a strategic partnership; contracting models; Service Provider Open Access; and shared Risks and returns.

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The oil industry regulator has lined up the following Model for surviving and thriving post-COVID-19. These include Marginal field bid round, Policy and Regulations, Business environment and investment drive and making this year the Year of Gas.

Auwalu noted that the oil and gas industry contributes about 10% to the Gross Domestic Product (GDP) and also drives the Nigerian economy.

According to him, ‘’The sector is also responsible for about 80 %of Government revenues as it is also the principal source of foreign exchange earnings and Foreign Direct Investments (FDIs).’’

“There are, expectedly, direct impacts of falling oil prices on the country, which include; change in the Budget benchmark as well as the Revised 2020 Budget.’’

He said the COVID-19 which may be with us for some time has brought about a new normal.

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Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected]

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Economy & Politics

Nigeria needs $3trillion in 30 years to reduce infrastructure deficit – Osinbajo

Vice President Yemi Osinbajo has stated that Nigeria will need $3trillion in the next 30 years to reduce its infrastructural deficit.

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Solar, FG to slash import duties on tractors, buses, others in 2020 Finance Bill, Nigeria will not issue Eurobonds, says Vice President Yemi Osinbajo, FG guarantees mortgage loan to low income buyers at low interest rate, FG inaugurates gold refinery project in a landmark event

The Vice President, Yemi Osinbajo has said Nigeria will need $3trillion in the next 30 years to reduce its infrastructural deficit.

He disclosed this while featuring at a webinar organized by the Bureau of Public Enterprises (BPE).

Osinbajo told the webinar that Nigeria needs to adopt new models of investments for infrastructural developments because relying on public expenditure alone is not sustainable.

READ: How digital transformation will impact Nigeria’s projected $8.79 billion economic expansion

The seminar discussed the roles of Public-Private Partnership (PPP) in developing Nigerian infrastructure. The Vice President said Nigeria still face a huge infrastructural deficit, despite government investment which is a roadblock to rapid economic growth.

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The Federal Government recognizes this fact, which is why we are considering other approaches to complement and boost financing for the development and maintenance of infrastructure in Nigeria.

READ: Nigeria’s Broadband subscriptions peak at 82.7m – Prof. Danbatta

“It is clear that this deficit can only be made up by private investment. Private sector is 92 per cent of GDP, while the public sector is mere 8 per cent. So, the synergy between the public and private sector through Public-Private Partnerships (PPP) is really the realistic solution.

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“The fact that only N2.49 trillion was appropriated for capital expenditure in 2020, reflects the importance of deliberate and pragmatic action to boost infrastructural spending.

READ: #EndSARS: Infrastructure and Works, Education, 3 others are prioritised in Lagos’ 2021 budget

“It seems to me to be quite clear that the financial outlay and management capability required for infrastructural development and service delivery outstrip the financial and technical resources available to government.

“In other words, the traditional method of building infrastructure through budgetary allocations is inadequate and set to become harder because of increasingly limited fiscal space,” he said.

READ: FEC okays FMBN’s request to purchase banking application software for N487.39 million

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He revealed that the FG has launched a series of PPP’s to enable Nigeria meet its infrastructure deficit needs, citing the roles of agencies like the BPE with PPP’s.

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The Federal Government has recently issued a circular on the administration of PPP projects in the country to provide the much-needed clarity.

READ: AfDB to support FERMA with $10 billion for roads, others 

“The circular re-emphasises that the BPE shall be responsible for the concession of public enterprises and infrastructure already listed in the First and Second Schedules of the Public Enterprises Act.

“The circular equally stipulates that the BPE shall act on behalf of the Federal Government, as the counterparty on all infrastructure projects being developed on a PPP basis,” he said.

READ: CBN launches Private Sector-led Accelerated Agriculture Development Scheme

He disclosed that the Infrastructure Concession Regulatory Commission (ICRC) would continue to act as the regulatory agency for PPP transactions, with directives including inspections and monitoring PPP projects.

“It is expected that this new policy direction would provide clarity to stakeholders and foster the improvement of PPP programmes in the country.

“Ministries, Departments and Agencies, as well as the multilateral agencies and our development partners are urged to support the PPP policy objectives and institutional arrangements already put up by government,” he said.

READ: FG says vehicle owners to pay N250,000 to convert from petrol to autogas

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What you should know 

  • Nairametrics reported last month that Moody Investors Services revealed that Nigeria needs to spend about $3 trillion in over 30 years to bridge the infrastructural gap experienced in the country.
  • The Minister of Works and Housing, Babatunde Raji Fashola, revealed that the Federal Government needs at least N500 billion annually for the next 3 years to develop and fix its 35,000 kilometres road network, as work continues on 13,000 kilometres of the network.
  • Nairametrics also reported last month that the FG approved the establishment of an infrastructure company that will be wholly focused on critical infrastructural investments in the country.

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Economy & Politics

National Assembly does not have power to replace constitution – Omo-Agege

The Deputy Senate President has stated that the National Assembly does not have the power to replace the constitution.

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National Assembly does not have power to replace constitution - Omo-Agege

The Deputy President of Senate, Ovie Omo-Agege, has stated that the National Assembly does not have the power to replace the constitution.

The Senator disclosed this at a meeting with the Alliance of Nigerian Patriots led by Amb. Umunna Orjiako on Wednesday. He was represented by his media aide, Mr. Yomi Odunuga.

READ: FG to inject over N198 billion on capital projects in power sector in 2021

Omo-Agege said what could be achieved was an amendment of the constitution by the National Assembly. He urged stakeholders to channel the demands of a new constitution towards constitutional amendment.

“I am not so sure that we as a Parliament have the power to replace the Constitution. We can only make amendments and it is explicit in sections 8 and 9 of the constitution on how we can do that and the requisite number of votes required.

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READ: Nigeria is the 14th largest producer of tomatoes in the world, second in Africa – NIHORT

“I say that because there are some top attorneys in this country, who for some reasons, keep saying that we don’t even need any of this, that we should just bring a new constitution. We can’t do that.

“What we are mandated to do by law is to look at those provisions and bring them up-to-date with global best practices, especially to the extent that it tallies with the views of the majority of Nigerians. So we are not in a position to replace this constitution, but we can only amend.

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READ: Commercial banks in frenzy as they seek N1.5 trillion boost

The senator also said that the Senate would look into issues like restructuring if there is a major demand for it from Nigerians and also the exclusive legislative list.

“But, like I said, most of the issues you have raised here, like zones replacing states, that’s another euphemism for going back to the regions. We will look into that if that is what majority of our people want.

“You talked about devolution of powers. The preponderance of views we have received so far is that those 68 items are very wide and need to shed some weight and move them to the Concurrent Legislative List.”

READ: Update: Buhari seeks power to freeze accounts, clamp down on money launderers

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What you should know 

  • Nairametrics reported last week, that Sokoto State Governor, Aminu Tambuwal, said any plan to restructure Nigeria and the Constitution must pass through legal due process from the National Assembly.

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Economy & Politics

Dapo Abiodun presents N339 billion budget to Ogun State Assembly

Ogun State Governor has presented a N339 billion 2021 budget to the State House of Assembly.

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The Governor of Ogun State, Prince Dapo Abiodun, presented the N339 billion budget for 2021 tagged “Budget of Recovery and Sustainability,” to the Ogun State House of Assembly.

This was disclosed by the Governor on Wednesday after he presented the budget proposal to the House. He added that the budget will remain focused on completing as many projects as possible.

READ: We are working to clear N124 billion backlog of export claims – NEPC

READ: Buhari presents N13 trillion 2021 Budget to National Assembly

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READ: Reps to support total reforms in aviation industry through legislation – Speaker

What they are saying 

Aggregate expenditure for the State Government is N339billion, with a recurrent expenditure of N162billion and capital expenditure of N177billion,” the State Governor said in his statement.

He added that the budget would be focused on project completion in the state.

READ: Sanwo-Olu presents N1.1 trillion 2020 budget

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The budget remains focused on the completion of as many ongoing projects as possible. The State House of Assembly would be presented with the most critical projects, which we must all work collectively to ensure they receive adequate funding,” he said.

READ: Lagos Rail Mass Transit: House of Assembly approves N153 billion for construction

He also said that the budget will provide suitable grounds for recovery from the obvious economic challenges of the current fiscal year, while ensuring that Ogun State’s local economy remains sustainable going forward.

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