By Ediri EJOH

Until the Federal Government creates incentives and progressive regulations with less tax burdens, ensuring clarity in its roadmap for the petroleum industry, and resolving crisis of militancy, the quest to escape current downturn crippling the economy as well as the industry may be farther than envisaged.

These were the views of experts who spoke to Sweetcrude.

Speaking on investment required in the petroleum industry to grow reserves, Petroleum Economist and President, Nigerian Association for Energy Economics, NAEE, Professor Wumi Iledare, said Nigeria needs to keep the future in perspective to avoid the collapse of the industry activities under a volatile and low crude oil price.

He explained that government has to create incentives to grow reserves using fiscal incentives and progressive regulations with less tax burdens on the industry.

His words, “Honestly, in the short run, there is no specific amount that must be invested in the petroleum industry to turn things around in the economy right away.

“That notwithstanding, historically, about 13 to 15 billion dollars, on average, since 2010 has been the estimated joint venture and about six billion dollars production sharing contract upstream budget.

“Perhaps the government can follow the recommendations in the governance bill not through direct selling of the entire interests of the government in the Joint Venture asset but public offerings just like Seplat Petroleum Plc is doing to raise money to fund the development of its assets”.

Also speaking, a senior official with one of the international oil companies, who pleaded anonymity, urged for clarity in the Federal Government’s roadmap and policies for the petroleum industry. He explained that the lack of clarity in the sector has cost the economy a lot of losses.

“Where we are at the moment is a very critical state and needs critical decisions that will drive the industry. We need a clear road map for the petroleum industry and policies. These policies are such that will obey contract agreements, JV funding, PSCs agreement and ensure security of investments, which we are currently battling with in the country”.

He however added that efforts should be geared towards ensuring that there is stability in production after which plans should be put in place to attract investors into the sector.