Nigeria has lost $50 billion worth of investment in the oil and gas industry as a result of the non-passage of the Petroleum Industry Governance Bill (PIGB).
According to a report obtained by LEADERSHIP recently, the investment, which was lost in the last 16 years, would have culminated in additional crude oil production of 1.5 million barrels per day for the country.
The report revealed that the loss has significantly affected the growth of the nation’s shipping sector.
The report, which is the latest maritime forecast by the Nigerian Maritime Administration and Safety Agency (NIMASA), stated that the PIGB would allow for more oil production, which means more crude oil tankers for export.
“Nigeria exports 100 per cent of its crude oil by sea, so, an additional 500bpd of crude oil production in the next one or two yeas will amount to 182,500,000 barrels per year or 25,347,222 MTS of cargo per annum. This volume of cargo will require a minimum of 91voyagies of a very large Crude carrier (VLCC) vessel to lift, which will generate a lot of activities in the maritime industry”, the report noted.
The report stated further that the Nigerian oil industry relies heavily on the maritime industry for its smooth operations and whatever happens in the oil and gas industry affects the shipping industry.
It continued: “It is estimated that Nigeria has lost over $50 billion worth of investment in the oil and gas industry since the last 16 years which could have culminated in additional 1.5 million barrels per day crude oil production for the country, which has continued to heighten the agitation for the passage of the PIB.
“Also, shipping has always been of strategic importance to the oil and gas industry. Not only is over 70 per cent of all crude oil production transported by ships, more and more oil productions activities are now being carried out offshore. This shows that the oil industry relies heavily on the maritime industry for its smooth operations.
Whatever happens in the oil and gas industry is likely to affect the shipping industry and vice versa”, the report said, adding that the passage of the PIGB would lead to increased Cabotage Activities and demand for crude oil tankers.
“The likely impacts of the PIGB include increased cabotage activities and increase in investment in the industry. This means more production activities and more production activities mean more shipping logistics requirement. The Cabotage trade in Nigeria is 95 per cent within the industry. So, we are likely to see an increase in investment if the act meets the expectations of industry practitioners.
“Another impact also includes increased demand for crude oil tankers due to more investments in the oil and gas industry. There will be more oil production and more oil production means more crude oil tankers for export. Increased importation of oil and gas production equipment will be fuelled by the immediate impact of an increased investment in the oil and gas industry.
“This will see more vessels calling Nigerian ports, more revenue for the government and more business for auxiliary services providers in the industry. We also expect oil rig count to steadily increase on account of improved oil production and demand. Also, greater investments in oil and gas will translate to more demand for offshore support vessels.
“We recommend and anticipate that the federal government would do to more to attract additional investments into the maritime industry, while incorporating newer expansionary strategies for ocean- based industries and the exploitation of the vast resources of the ocean into its broad vision of national economic regeneration”.