The oil and gas sector which account for more than 80 per cent of government revenue has maintained a consistent decline. The National Bureau of Statistics (NBS) in its second quarter 2018 Nigerian gross domestic product (GDP) report said daily oil production averaged 1.84 million barrels, from about 2 million barrels in the preceding quarter.
The MPC demanded the urgent passage of the Petroleum Industry Bill (PIB) in order to boost the nation's economic development and increase the oil sector contribution to overall GDP. But, the PIB passage has lingered for nearly 18 years since 2000. The long delay jeopardizes Nigeria to experience Venezuela's oily crisis story.
There is a basis to compare Nigeria and Venezuela. Nigeria, like Venezuela, is one of the world's leading producers of hydrocarbon in OPEC. Until recently, Nigeria topped the oil producers in Africa, in terms of proven crude oil reserves.
Venezuela's over 300 billion barrels of proven crude oil reserve, the world's largest, accounts for 25 per cent of the combined 1.2 trillion barrels estimated reserves of the 15-member Organisation of Petroleum Exporting Countries (OPEC).
Despite rising crude oil prices at the international export market above $80 per barrel, Venezuela is in deep distress. Latest data from TradingEconomics.com show the figure dropped further to about 1.4 million barrels in August 2018, with inflation climbing from over 82,000 per cent in July 2018 to over 200,000 per cent.
Experts familiar with the distressing Venezuelan experience say this could have been averted if successive administrations were more circumspect, transparent and accountable in the management of the resource. But, an opaque governance structure transferred the wealth from the industry into the hands of a few individuals in the corridors of power. The country's oil wealth hardly impacted the lives of the majority of the population.
Latest OPEC data on the world's crude oil reserves reveals that out of about 1.2 billion barrels of all OPEC member countries, Nigeria accounts for 3.1 per cent (37.45 billion barrels). In terms of daily oil production capacity, OPEC crude oil production data show Nigeria still towers above other African countries, with about 1.73 million barrels as at August 2018.
Regardless, Nigeria's current production capacity still falls below its projected 2.3 million barrels target in successive federal budgets since 2016, during which only 1.56 million barrels per day were realised, in 2017 (1.76mbpd) and 1.73 mbpd as at August 2018, according to OPEC records.
The decline is not affecting production alone. New investments have been reduced markedly.
Chairman/Managing Director, Chevron Nigeria Limited, Clay Neff, said new investment's in Nigeria's oil and gas industry declined by about $21billion (20 per cent) before the arrival of Buhari administration. In 2018, the NBS stated that capital importation dropped from $85.62 million in its first quarter to about $24.85 million in the second quarter
The NBS said the new level is the least in seven consecutive quarters, since 2016. The drop represents a decline of 90.64 per cent, from $171.63 million recorded in the third quarter of 2016. To sum up, experts say, the industry lost over $150 billion over the last decade from revenue losses and lack of investment.
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