Lubricating Nigeria’s economy through the ‘drill or drop’ policy, By Akpandem James

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Therefore under-production and under-delivery in the petroleum sector could pose major upsets in a struggling economy whose major source of foreign exchange earnings is proceeds from hydrocarbon exploitation. A transactional approach to the challenges of the oil and gas industry is not likely to help matters. It could send the economy into a tailspin and re-enact the 2016 scenario, with long-term implications.

As a matter of fact, the country’s economy has been structurally weak for decades; but to jettison that narrative and build a resilient economy that is globally competitive, it bears repetition that concerted efforts are mandatory to deal with the challenges in the petroleum sector while enabling the drivers of other sectors like agriculture, manufacturing, mining, services, construction and tourism.

Just as there was a need for strong regulations, there was also an urgent need for an effective accounting system through a metering process that would indicate online real-time daily production levels, the volume being sold and where the proceeds are going.

It has been observed that within the last one year, decisive steps have been taken to boost production levels. This includes the Presidential Executive Orders issued in March this year, which aim principally at improving the efficiency and attractiveness of Nigeria’s oil and gas sector, incentivising oil and gas development and ensuring that local content bottlenecks do not hinder oil and gas development.

However, growing reserves in terms of fields’ allocation is just one move towards increased productivity, but the major issue is driving the productive capacity of the fields. Unfortunately, some operators who had been allocated mining leases in the past are still sitting on them years after without getting them into production. This is pure sabotage, especially for a country facing severe revenue challenges.

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