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Oil revenue shouldn’t be used to finance devt, FG told

…IOCs spoon-feeding Nigeria through JV agreements —Reps

By Michael Eboh

THE Federal Government has been advised to exercise caution in the use of oil and gas revenue to finance the country’s development.

This was even as the Chairman, House of Representatives’ Committee on Environment and Habitat, Mr. Obinna Chidoka, stated that the Federal Government had allowed itself to be spoon-fed by International Oil Companies operating in the country, who determine revenues that accrue to the country.

Speaking at a workshop on the Nigeria Natural Resource Charter, NNRC, Benchmarking Exercise Report, a former Director of the Central Bank of Nigeria, CBN, and former Vice Chancellor of the University of Uyo, said too much emphasis should not be placed on using oil revenue to finance Nigeria’s development, because it is a wasting asset and would be depleted one day.

Ekpo, who is also a member of the Expert Advisory Panel of the NNRC, said instead, the country’s oil revenues should be used to build infrastructures, as was done in other countries. “That is what we want to see, because in the next 40 years, there will not be oil, according to predictions. Forty years might look far but it is around the corner,” he declared.

He further stated that the country should focus more on local refining of crude oil, while only the surplus quantity should be exported. “First of all, we should begin to emphasis more on refining our crude at home and then whatever surplus we have, we send abroad, like we did in the 1980s.. People forget that, we used to refine our crude oil and use some.

Right now, all we do is we keep exporting crude oil.Although the petroleum industry brings us revenue, we are not even sure it is enough, because its output is informed by foreign companies. That is why I argued that beginning from now, let’s use the oil money to build infrastructure, so that years to come, we can say oil money did this. Except we do that, we will not get much.”

Also speaking, Chairman, House Committee on Environment and habitat, Mr. Obinna Chidoka, who was represented by a member of the committee, Mr. Henry Nwawuba, lamented that Nigeria had over the years not positioned itself to truly benefit from the petroleum industry.

He said, “We entered into Joint Venture agreements and we ceded the entire operations to our JV partners. We depend on the JV partners to tell us how much it cost them to operate, and what the meters are saying in terms of quantity produced.

He argued that efforts should be geared towards ensuring that the country has a JV agreement that is hinged on operations and monitoring in a way that would favour this country.

He also called on stakeholders to partner with the relevant committees of the House of Representatives, especially the Committee on Environment and the technical Committee handling the Petroleum Industry Governance Bill, PIGB, so that when the law is passed, it would be reflective of the views of all critical stakeholders in the industry.

Speaking in the same vein, Project Coordinator, NNRC, Tengi George-Ikoli, said the essence of the benchmarking exercise, which is based on 12 precepts, was aimed at getting critical stakeholders to decide on an action plan, sell ideas of the sector reforms and bring about key changes that would ensure that the report achieve its aim of advocacy.

She said the report would determine the extent to which Nigeria is complying with the 12 charters used to assess the country, adding that the report would present recommendations and suggestions on how the industry would function effectively.

On his part, Mr. Henry Adigun, Team Lead, Facility for Oil Sector Transformation, FOSTER, stated that Nigeria was still at the primary levels of the industry.

According to him, over the years, petroleum had benefitted only a minute fraction of the Nigerian population and had failed to make meaningful contribution to Nigeria’s economic growth and development.

 


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