61st Independence Anniversary: Role of Oil and Gas Sector in Nigeria's Development

Justice Derefaka

61st Independence Anniversary: Role of Oil and Gas Sector in Nigeria's Development 

By Justice Derefaka

I can claim that the Nigerian oil and gas business has had a direct and indirect impact on the local economy for the past 61 years, with oil and gas prices directly affecting the country's overall health. Oil and gas are vital not just to Nigerian citizens and businesses, but also to the country's international standing. 

Every year, the oil and gas industry invests hundreds of billions of dollars in Nigeria, boosting economic growth. To complement our efforts, we create jobs in a variety of other industries. We offer competitive salaries and support to Nigerian families as they work their way up the economic ladder. 

Our country's lifeline is oil and gas. Since the mid-1950s, oil has been the world's most important source of energy. Its products are essential to our civilization, providing energy to power industry, heat homes, and gasoline for vehicles and planes that transport goods and people across the country and around the world. 

It also enhances our lives by being necessary for the manufacturing of numerous common necessities. Refined oil is used to make practically all chemical products, including plastics, fertilizers, detergents, paints, and even pharmaceuticals, as well as a variety of other items you might not expect. 

Here are some examples of what we owe to the Nigerian oil snd gas sector, every day of our lives:

At school: rulers, crayons, ink and cartridges, glue, coverings on books, binders...

For your health: coatings for pills, binding agent for creams, disposable syringes...

In the home: contact lenses, cosmetics, clothing, fabrics, nail polish, deodorants, shampoo, paint, upholstery and carpets, detergents for washing up and laundry, dry-cleaning fluid...

Out shopping: shopping bags, credit cards, egg cartons, plastic milk bottles

While cooking: non-stick pans, cling film, storage containers.

For building: roofing tiles, pipes, insulating material, paint

On the move: petrol and diesel for cars and lorries, emergency services and trains, asphalt road surfaces

In the office: computer hardware, phones and faxes, diskettes, pens, chairs, printing ink.

At your leisure: CDs, videos, cassette tapes, camera film, artists' paint, bicycle handlebar grips, tyres, crash helmets, football boots, trainers, shin pads, windsurfers, roller blades

Garden: fertilisers, pesticides, garden furniture.

Through its extensive supply chain, the oil & gas industry employs hundreds of thousands of people and makes a major contribution to the Nigerian economy in terms of tax revenues, technologies and exports. Tens of thousands of people work in the oil and gas industry.

As a result, a shortage of oil and natural gas would bring the country (and the world) to a halt. Despite the existence of "renewable" and "sustainable" energy programs, none have been able to provide a considerable amount of energy to the world. Oil and natural gas are the lifeblood of the planet, and without them, many countries would be unable to function on a daily basis. Nigeria is included in this. 

We would swiftly become reliant on foreign supplies if Nigerian oil and natural gas output ceased. And if that happens, the domestic economy will be directly influenced by the price of oil and gas exports. 

Nigeria's economic outlook has been greatly enhanced by the oil and gas industry. Nigeria's oil and gas business is flourishing, allowing the government to export crude oil and natural gas rather than importing it, creating an energy market that would bring money into the country rather than send it out. 

Our community involvement programs through capacity-building – that is, making investments to enhance the essential building blocks of a prosperous society – are at the heart of the oil and gas sector's contribution. Education and training, job development, and health care are just a few of the building pieces that contribute to a healthy society and a good business climate. 

The value of a core business investment is protected and leveraged through capacity-building. All of these factors, taken together – strong company investment, local jobs and content, and community development – are essential for long-term economic success. 

Nigeria's future is inextricably linked to the strength and health of its oil and gas industry. Fortunately, the oil and gas business has been increasing for some time, and we will perform much better with the PIA 2021. 

Let me also say this about the oil and gas business and sustainability: sustainable development is not an option in a world that is becoming more connected and interdependent than ever before. It's a requirement. 

At any time, the contributions of the oil and gas industry to sustainability would be an interesting issue. But it's especially pertinent now, as the global energy market undergoes significant transformation. 

The Sustainable Development Goals (SDGs) are part of the 193 United Nations Member States' September 2015 agreement, "Transforming our World: the 2030 Agenda for Sustainable Development." 

The 17 Sustainable Development Goals (SDGs) are the world's comprehensive strategy for social inclusion, environmental sustainability, and economic development. But, in my opinion, achieving the 17 SDGs by 2030 would necessitate unprecedented engagement and coordination across governments, non-governmental organizations, development partners, the commercial sector, and communities.

 While governments have primary responsibility for prioritizing and implementing methods to achieving the 17 SDGs, the private sector and civil society will play a crucial role in putting our national plans into action. In fact, the government is likely to rely heavily on businesses and investors to help them deliver. 

Nigeria's oil and gas industry has the ability to contribute to all 17 Sustainable Development Goals either by improving good contributions or avoiding or decreasing negative consequences, with proper planning and implementation. 

On a different note, The delivery of reliable, inexpensive energy is one of today's largest problems, both to rising demand and increasingly complicated working settings. 

To begin with, you and I both understand that investment is the bedrock of every long-term firm or economy. Long-term growth necessitates both current operations and future potential. Our sector is also making massive expenditures, fueled in part by rising demand and limited supply. 

These investments have been made over the past 60 years and continue to be made today across the whole oil and gas value chain, including exploration, production, refining, and transportation. As proven throughout time, these investments provide a fantastic basis for stimulating broader economic growth.

 Second, with the backing of the Nigerian Content Act and the PTDF, these investments have been leveraged into the formation of a trained and competent workforce for Nigeria.

 Third, over the years, IOCs and indigenous oil businesses have carefully directed their investment toward the development of local supply chains, which increases job possibilities and supports the Nigerian economy. 

Furthermore, leveraging oil and gas core investment to create jobs in local markets in Nigeria has proved a tremendous multiplier effect throughout our local economy over the years and continues to do so, as well as providing corporations with a devoted Nigerian workforce. 

Simultaneously, countries of the world, such as Nigeria, where energy resources are concentrated, are frequently in desperate need of long-term economic growth. 

Our sector has a responsibility and it is promoting long-term development in methods that are both energy efficient and contribute to the economic and human development of our beautiful nation Nigeria. This is a significant challenge in a society where the population is expanding and the wealth gap is widening. 

In addition, there is a clear link between the Nigerian oil and gas business and the United Nations' 17 Sustainable Development Goals (SDGs), with a shared understanding of how the industry can best promote the achievement of the 17-SDGs. 

The Nigerian oil and gas sector is dedicated to responsible and sustainable business practices, as well as working as a critical partner in reaching the UN's 17 Sustainable Development Goals. 

Economic growth, local content and capacity building, community participation, anti-corruption, health and safety, greenhouse gas (GHG) reduction, and environmental protection are all areas where the oil and gas industry is already making considerable efforts.

 Indeed, as a matter of corporate practice, many Nigerian companies have committed significant resources and efforts to achieving sustainable development. They are not only furthering the UN's 17 Sustainable Development Goals, but they are also developing norms and practices that go far beyond legislative requirements. 

While the examples provided show the various ways the sector is already working to contribute to sustainable development, there is still much more that can and must be done. 

A particular challenge for the industry is its role in climate change. While the oil and gas has enabled industrialization and human development, their use has also contributed to the rise in atmospheric carbon dioxide, which in turn has contributed to a warming of the climate system. 

By endorsing the 2030 Agenda, the world agreed to deliver the 17-SDGs while also addressing the risks of climate change. And the Nigerian oil and gas sector is on top of this as well. 

My emphasis here is that the oil and gas industry must be and is already a key part of the solution to addressing climate change. 

While there is no single pathway to a net-zero GHG emissions future, the Industry at the highest level has presented a number of actions that could contribute to the transition in order to stabilize atmospheric GHG concentrations and global temperatures in line with the Paris climate agreement.

Overall, oil and gas production can foster economic and social development by providing access to affordable energy, opportunities for decent employment, business and skills development, increased fiscal revenues, and improved infrastructure. However, oil and gas development has historically contributed to some of the challenges that the 17-SDGs seek to address.

Let me sum up: as an industry, and as we go beyond this 61st Independence Day celebration, we are uniquely and powerfully positioned to deliver what millions of people in Nigeria and the worldwide long for -- investment . . . jobs. . . a stable environment . . . healthy communities . . . and a vibrant economy.

I am an optimist. I believe that the Nigerian petroleum industry can help millions of people realize a more healthy, environmentally sound and prosperous life. But that cannot happen unless there is responsible and accountable leadership from everyone in the energy value chain – Nigeria as a producing country, consuming countries, national and international companies, policy makers and ‘resource host-communities’.

This leadership must be rooted in action, not words. It is only through accountable, responsible leadership that the economic benefits of the oil, gas and indeed the energy we discover and produce will flow to all stakeholders.

Working together, we can all help build a sustainable future for many millions of people – a future in which all of us can be proud. And I’m glad that the present administration of President Buhari alongside the leadership of the ministry of Petroleum Resources and the agencies Under able leadership of the Hon Minister of State for Petroleum Resources- HE. Chief Timipre is taking that lead and actively showing proofs.

Engr. Justice O. Derefaka

Technical Adviser (TA) on Gas Business & Policy Implementation to The Honorable Minister of State, Petroleum Resources.