Andrew Pollock, British High Commissioner in Nigeria, says the passing of the fiscal side of the Petroleum Industry Bill (PIB) would encourage oil companies to move into investment in deepwater, with potential of between £80 billion and £100 billion.
He added that foot-dragging over the bill was costing the country dearly.
Pocock, who spoke at the Centenary Lecture and Reception of the Nigerian British Chamber of Commerce (NBCC) and United Kingdom Trade and Investment, (UKTI) in Lagos on Tuesday, said while economic transformation which is expected to happen through gas and power transformation is increasingly becoming a mirage, the passage of the bill is anticipated to increase participation of International Oil Companies (IOCs) in the deepwater sub-sector, which will inevitably free gas to the economy, particularly to the power sector, which is currently being cramped by a shotage of the product.
According to Pocock, the passage of the long awaited bill will also reduce cost of production among many firms, which use gas as their source of energy, and consequently raise the standard of living among Nigerians.
Pocock, who was the special guest of honour at the event said, “Chevron, Shell and a number of companies want to move into deep water.
“We are looking at £80 billion to £100 billion that can happen. But the companies need to be given the physical guarantees. They need to have the licenses they require and the environment. Those things are not complicated. Those things will involve passage of PIB which has been with the National Assembly.”
According to the British High Commissioner, creating the right environment through the PIB passage would increase the Nigerian government’s revenue through taxes and royalties and cause economic transformation.
“If this happens, the transformation effect will be exponential. Think of the impact of gas availability on the power sector. If everybody has power in this country, people will move into businesses. The pent-up opportunities will be limitless,” he added.
Nigeria requires gas- to- power transformation to steer the industrial sector at this point when the country needs economic diversification from oil. The manufacturing sector, which is expected to deepen the economy, is stumped by high energy cost, caused by poor public electricity supply to industrial zones and factories, which results in high energy spend and inability of local commodities to compete effectively in the international market. This partly accounts for why Nigeria remains largely import-dependent.
’’We have between eight and 16 hours of power outages in the country at the moment. Why are we surprised that most manufacturing firms post high operating costs here? Most industrial nations have their manufacturing sectors contribute between 20 and 25 percent to the Gross Domestic Product (GDP), but ours is just not near this ,’’ said Seni Adetu, immediate past chief executive officer(CEO), Guinness Nigeria Plc, recently. Adetu also said the company had to spend $3 million on its gas connection.
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Another effect of non- deepwater guarantees is that it places Nigeria at the receiving end of trade relations. Uncompetitiveness of local manufacturing results in lower exports from Nigeria and larger imports into the country.
For instance, imports from China, the UK, and
France into Nigeria are always larger than exports from Nigeria.
Olusegun Aganga, minister of industry, trade and investment, said the time has come for Nigeria to export processed commodities rather than export raw materials, stressing that the government is desirous of
increasing its level of Gross Domestic Product (GDP) by five points.
Aganga, who was represented by Rasheed Olaoluwa, chief executive officer, Bank of Industry (BoI), said the United Kingdom should take advantage of the abundant natural and human resources in the country by embarking on training programmes that will enhance the quality of manpower and products.
“There are seven critical enablers that will make the Nigerian Industrial Revolution Programme(NIRP) successful. These include the investment climate, access to affordable finance, standards, local patronage, skills, infrastructure and innovation,” he said.
Ernest Shonekan, former head of interim government, said there are abundant business opportunities in both countries, urging that both countries should reap from the large economies of scale.
“British investors need to explore the Nigerian market for more businesses. If anything, the large population of Nigeria, its vast agricultural land and solid minerals are indications of the vast business opportunities waiting to be tapped,” he said.
ODINAKA ANUDU
