In 2021, the Nigerian oil and gas industry witnessed unarguably the level of activities that had not been witnessed in a long while. From the enactment of the Petroleum Industry Act to the declaration of the ‘Decade of Gas’, the sector remained a major hub as Nigeria began to make haste to get as much oil out of the ground before the world moves on from the consumption of fossil fuels.
To this end, the commission noted that it had put in place all necessary machinery to progress the bid round exercise to conclusion in line with the Petroleum Industry Act 2021 . With completion set for between 18 and 44 months under a three-phase arrangement, the rehabilitation was awarded to Milan-based Tecnimont SpA.
After about two decades in the doldrums, the PIA has now seen the light of the day and is expected to create an enabling investment environment and codify the regulatory, administrative and fiscal framework for the industry. Minister of State, Petroleum, Timipre Sylva, recently described the phenomenon as an existential threat to the oil and gas industry. On the global stage, the energy transition will pose a major obstacle to the funding of oil and gas projects worldwide.
With Nigeria currently refining zero products, the Dangote refinery which will have an annual refining capacity of 10.4 million tonnes of petrol, in addition to about 4.6mt of diesel and 4mt of jet fuel, among others, is expected to significantly alter the fuel supply dynamics as well as boost the economy.
This will have ripple effects on almost every facet of the Nigerian economy, coupled with organised labour’s threat to embark on a massive strike action which could markedly disrupt Nigeria’s already ailing economy.President Muhammadu Buhari remains the defacto Minister of Petroleum Resources, but the newly rechristened Nigerian National Petroleum Company Limited, by its critical importance, is expected to drive the execution of government’s policies in the oil and gas industry.
Shell and Mobil for instance are in talks with the Nigerian authorities on how best to go about selling off their onshore and shallow water assets in preparation for a final exit from exploitation of fossils in the coming years. In May last year, Shell’s Chief Executive Officer, Ben van Beurden, while speaking at the company’s annual general meeting, said that Shell could no longer afford to be exposed to the risk of theft and sabotage in Nigeria.