The Federal Executive Council (FEC) Meeting held on Wednesday 19th July, 2017 in Abuja, ended on a high note as the cabinet meeting presided by Ag. President Yemi Osinbajo, approved the National Petroleum Policy.
Speaking to State House correspondents at the end of the meeting, the Honorable Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu stated that it is a very comprehensive 100-page document that deals with all the spectrum in the industry.
Dr. Kachikwu further reiterated that apart from the fact of fluidity in pricing and uncertainty in terms of the price regime in crude, the Ministry of Petroleum Resources is pushing for a refining processing environment and moving away from exporting to refining petroleum products.
The National Petroleum Policy defines the strategy of the Federal Government with respect to Nigeria’s oil resources.
It establishes the medium to long-term targets for oil reserves growth, and utilization and record strategies to be pursued to ensure the successful implementation of the policy in accordance with Nigeria’s national socio-economic development priorities.
It articulates the vision of the Federal Government of Nigeria for the petroleum (specifically oil) sector, sets goals and strategies, promotes a level playing field between State Owned-Enterprises and the private sector, proposes fundamental reforms to improve the operational efficiency and performance of NNPC and proposes a long-needed overhaul and modernization of the existing petroleum industry legislation. It is intended to remove the barriers affecting investment and development of the sector. The policy will be reviewed and updated periodically to ensure consistency in Government policy objectives at all times.
The main aspects of the petroleum policy are:
1. Governance (Legal and Regulatory Framework)
a. Institutional Reforms
b. Regulatory Framework
c. Commercial Framework
d. Fiscal Framework
e. Sector Financing
f. PSC – Plus Cost Structures
2. Industry Structure
a. Clean Break from the Past
b. Establishment of a new National Oil Company of Nigeria (NOCN)
c. Restructuring of NNPC: Into autonomous business units
d. Gain more of the value from downstream export markets
e. Procurement for Projects: Fundamental overhaul to bring efficiency, transparency and cost control
f. Asset Management: Work existing assets much harder, professional and modern asset management methods to be introduced, cost control methods need to improve substantially
3. Upstream – Developing Resources
a. Maximising Production of Hydrocarbons within Nigeria
b. Maximise additions to reserves and future production
c. Diversify resource base, and identify low cost resources
d. Allocation of Oil Licences and Leases
e. Minimise Environmental Footprint: “Name and Shame” + “Polluter Pays”
f. Balance Petroleum Resources with Renewable Energy
4. Midstream Operations – Infrastructure (transportation and processing)
a. Develop Operating Oil Product Midstream Facilities
a. Refining: Strong refining sector a basic requirement of Petroleum Policy
b. Jetties: Potential areas of risk, physical and commercial
a. Proposed Commercial Framework for Midstream Oil
5. Downstream – Infrastructure and Markets
a. Commercialisation and Liberalisation of Downstream
b. Petroleum Products Pricing Policy
6. Developing National Human Resources
a. Problems of developing local content in a depressed economy
b. Nigeria must be able to Export Skills
c. Developing local content and implementing Local Content Act
d. Install institutional capacity building
e. Introduce a maintenance and safety culture
7. Communications: Internal and external communications strategy
8. Roadmap and Action Plan
a. Action plan for short term (months)
b. Implementation Plan for medium term (1-2 years)
c. Implementation Plan for long term (over two years)
d. Critical milestones