Nigeria’s failure to invest in the upstream sector of the petroleum industry has caused her to lose $100billion between 2008 and 2012 according to BusinessDay investigations. This has made the passage of the Petroleum Industry Bill (PIB) more expedient than ever.
Similarly, the country’s crude oil production target for the end of 2012, was given as 2.5 million barrels per day, but she could only reaslise about 2.1 million barrels per day, leaving a shortfall of about 0.5 million barrels per day, which is equivalent to about $10 billion, and to worsen the situation the daily production nose-dived to 1.9 million barrels per day in March this year.
Industry experts say those lost revenues could have been invested in infrastructural development which would have had a spin-off effect on the economy. It could have provided better roads, hospitals, good schools and a string of other businesses that could have improved the lives of Nigerians.
They also say it is this type of deficiency that the Petroleum Industry Bill (PIB) would have addressed if it was passed, and it could have also relieved the government from the burden of cash obligation under the joint venture arrangement.
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The delay in passing the PIB may make Nigeria lose its market position since there are several new discoveries around the world, and in particular Africa. This is because investors would prefer areas where the environment is conducive for investment.
For instance, a country like Angola is currently attracting more investments in the oil and gas sector. It was also reported that Ghana recorded more production than it budgeted as a result of favourable investment climate.
Industry experts also say that job creation would have solved the problem of insecurity in oil facilities in the Niger Delta region.
Another big challenge that investors are facing in the country is that of the contracting circle which takes about 36 months in the country as against the situation in Angola which is just about six months. It takes about three years from the time an investment plan is initiated to when it executed. This has scared some investors away from doing business in the country.
