Norway, a leading country in global oil and gas technology and production, has offered huge lessons on the kind of regulatory reforms Nigeria needs to pursue to ensure it maintains competitive edge in the global dynamic oil market.
Nigeria’s oil sector, the main driver of the economy, has failed to lift millions of Nigerians out of poverty within over 50 years of oil exploration in Nigeria’s oil rich Niger Delta, due largely to poor sectoral reforms and weak governance in the sector.
This could have been solved by the Petroleum Industry Governance Bill (PIGB), and had inadvertently shifted investors’ interest into other African countries that had just discovered oil.
Norwegian Ambassador to Nigeria, Jens Petter Kjemprud, says at the ongoing Nigeria’s Oil and Gas Conference in Abuja that Nigeria’s leadership could lift so many people out of poverty if the Nigeria oil sector operates with a better governance framework, while advising it to gradually evolve policies to ensure Nigeria plays its role as the world gradually goes into clean energy production.
The Ambassador notes, “Norway is a leading country in gas and oil technology and production. Governance in the sector shows that petroleum belongs to the people, and everyone has a stake. Norway, therefore, has a transparent and democratic system and enabling laws that enable steady and predictable development in the oil sector.
“Instead of putting so much money in developing the domestic oil company, we have decided to set up a special funding that brings in some income in oil and gas production through high yielding stocks and shares in global firms.”
According to the ambassador, “Based on series of reform that we have embarked upon, we have about biggest investments in the sovereign wealth globally, and we also have about $100 million worth of investments in Nigeria stocks.
“We also invested in shares worth about 1.5 percent of the global shares in a company from the proceeds of our oil and gas. All these accumulate funds for the future generations in Norway.”
The diplomat, who acknowledged that oil and gas would still play a role in few decades, however, noted: “We are now in the middle of shifting from fossil to renewable energy resources globally. Nigeria has to start the process from oil to gas and gas to renewable energy resources.”
In terms of ensuring proper transition from fossil energy to renewable to provide electricity, he said, “Norway has started the process and we have electricity production, which constitutes about 99 percent of hydro-carbons and we produce 36 000 megawatts for 5 million people, while Nigeria has over 200 million people with less than 5,000 megawatts of electricity.”
In a similar submission, Cetriona Laing CB, the British High Commissioner to Nigeria, urged the Nigerian government to work on key issues of outstanding regulatory reforms to ensure project stability, sanctity of contracts, tax regimes and a dependable independent judiciary to ensure it harvests maximum benefits derivable from the sector.
”If Nigeria makes progress in these four areas, Nigeria would make meaningful impact in its oil and gas sector, as an attractive environment into its rich oil resources. It is a really competitive market out there, and Nigeria frankly is not doing as well as it ought to. It has to ensure it gets its Acts right to ensure investors don’t move away to elsewhere.”