The Head of Energy Research, Ecobank Plc, Dolapo Oni, said on Monday that Nigeria would require a minimum of $30bn (about N9.47tn) annual investments to bridge the infrastructure gap that exists in the economy.
Oni made the remark at a Retreat/Workshop organised by the National Association of Energy Correspondents in Lagos.
He argued that in order for global energy needs to be met, a whopping $300bn would be needed and for Nigeria to meet its infrastructure deficit, it requires an annual investment of $30bn.
According to him, if Nigeria needs to bring its infrastructural development to date, it requires an annual investment of $30bn.
He said, “Past governments have placed emphasis on building reserves which stands at about 36billion barrels, but emphasis should be placed on the monetization of reserves, rather than building the reserves.
“This is because no one knows how soon the world would stop relying on crude oil as a main source of energy.
“Nigeria’s reserves can last for the next 55 years, but in next 55 years, would the world still be in need of our oil.”
He said Nigeria’s output had stagnated since the 1980s and he harped on the need to expand production beyond 2.2 million barrels per day, which he considered to be too small, when compared with Nigeria’s population.
Being the seventh country with the largest gas reserves in the world, Oni charged the government to develop policies that would encourage investment in gas development.
He said, “No incentives for gas development. Nigeria has not been producing non-associated gas but associated gas. It means gas discovered during crude oil exploration.
“Although, Nigeria’s gas output has grown faster than its crude oil output, but it is not being monetized very well.”
He lamented the under-utilization of the refineries which have been operating below 50 per cent capacity for years.
He said, “Refineries have been so badly managed and it may be difficult to bring it to optimal capacity. The main challenge the refineries had was inadequate supply of crude oil.
“Refineries must be adequately supplied with crude oil. This is another challenge I think Dangote refineries would face except it sources its own crude from abroad, without reliance on Nigerian crude.”
Oni urged the Nigerian government to make sure that the Petroleum Industry Governance Bill was passed into law.
He reminded the regulators and stakeholders in Nigerian oil and gas sector that the West African region now had more crude oil producers, unlike what we had in the past when only Nigeria and Angola dominated the African region.
He said, “In the past, Nigeria was a major player in global oil market. In those times, when a force majeure is declared due to perhaps an attack on the Forcados pipeline or the Bonny terminal, crude oil price will react in the global market.
“That means that there will be an increase in crude oil price following such declaration, but nowadays, nothing happens.
“This is because most refiners have found refuge in other crude oil producing nations with a more stable environment. Ghana is expected to add additional 100,000 barrels per day production because the Jubilee Field is coming up soon.
“Niger is producing oil, Angola is increasing production and every time Nigerians blow up their pipelines, new markets are created for these competitors.
“Asian refiners that love sweet crude grade from Nigeria are now upgrading their refineries to accommodate heavy crude.”
Oni stressed that Nigeria should get its fiscal framework right and pass the PIGB in order for investors to bring the much-needed fund to explore new frontiers.
He added that what Nigeria needs to attract investors is regulation.