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.
‘’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’’
“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.”
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.
Insecurity: FG to implement town hall meetings to reach a national consensus
The meetings are set to address the twin issues of insecurity and its concomitant effect on national unity and cohesion.
The Federal Government announced the launch of town hall meetings to address the twin issues of insecurity and its concomitant effect on national unity and cohesion.
This was disclosed by the Minister of Information, Lai Mohammed, at the Town Hall Meeting in Kaduna on Thursday, themed “Setting Benchmarks for Enhanced Security and National Unity in Nigeria.”
What the Minister is saying
“The correct starting point towards addressing these myriads of problems is the building of an “elite consensus” on the security, unity, indissolubility, and peaceful existence of Nigeria.
“Such elite consensus had worked in the past. Can we make it work now and proffer solutions in order to stave off the threats to our unity as a nation?” he said.
The Minister disclosed that the meetings are necessary to bring all critical stakeholders together to deliberate on the issues and possibly reach a consensus on the way forward.
“We expect this Town Hall meeting to develop concrete, implementable resolutions because a lot of talks and postulations had taken place with little or no requisite outcome.”
In case you missed it
- Former Vice President, Atiku Abubakar warned that the rising insecurity in Nigeria is a result of rising youth unemployment. He urged Nigeria to tackle out-of-school children cases, pay a monthly stipend to poorer families, incorporate youths who are above school age into massive public works programmes and others.
- Senator Ali Ndume insisted that the Federal Government needs to increase its total military spending to be able to tackle the rising insecurity in Nigeria which has seen a number of school students in 2021 kidnapped by bandits.
IMF lifts 2021 global GDP growth to 6%
The group also warned that economic recoveries are diverging dangerously across and within countries.
The International Monetary Fund has lifted its global growth outlook to 6% in 2021 (0.5% point upgrade) and 4.4% in 2022 (0.2 percentage point upgrade), after an estimated historic contraction of -3.3% in 2020 due to the effects of the COVID-19 pandemic. This disclosure was made on the organisation’s website on Tuesday.
The group also warned that economic recoveries are diverging dangerously across and within countries, as economies with slower vaccine rollout, more limited policy support, and more reliance on tourism do less well.
What the IMF is saying
“The upgrades in global growth for 2021 and 2022 are mainly due to upgrades for advanced economies, particularly to a sizeable upgrade for the United States (1.3 percentage points) that is expected to grow at 6.4 percent this year.
This makes the United States the only large economy projected to surpass the level of GDP it was forecast to have in 2022 in the absence of this pandemic.
China is projected to grow this year at 8.4 percent. While China’s economy had already returned to pre-pandemic GDP in 2020, many other countries are not expected to do so until 2023.”
On divergent recoveries
The IMF stated that divergent recovery paths are likely to create wider gaps in living standards across countries compared to pre-pandemic expectations.
“The average annual loss in per capita GDP over 2020–24, relative to pre-pandemic forecasts, is projected to be 5.7 percent in low-income countries and 4.7 percent in emerging markets, while in advanced economies the losses are expected to be smaller at 2.3 percent,” they said.
“Faster progress with vaccinations can uplift the forecast, while a more prolonged pandemic with virus variants that evade vaccines can lead to a sharp downgrade. Multispeed recoveries could pose financial risks if interest rates in the United States rise further in unexpected ways.“
For Africa, IMF forecasts economic growth of 3.4% in 2021 and 4% by 2022, Nigeria is expected to grow by 2.5% in 2021 and 2.3% by 2022, while South Africa is projected to hit growths of 3.1% and 2.0% for the respective years in focus.
In case you missed it
The International Monetary Fund (IMF) identified some factors that hamper the economic recovery of low-income countries from the devastating impact of the coronavirus pandemic, factors including access to vaccines, limited policy space to respond to the crisis, the lack of means for extra spending, pre-existing vulnerabilities such as high levels of public debt in many low-income countries and sometimes weak, negative, total factor productivity performance in some low-income countries. These factors continue to act as a drag on growth.
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