The Nigerian Academy of Engineering (NAEng) has commended President Bola Tinubu for issuing three executive orders aimed at reforming the oil and gas sector. These directives introduce fiscal incentives, reduce contracting costs and promote cost efficiency in local content requirements.
The president of NAEng, Prof. Azikiwe Onwualu praised the directives, stating that they would attract both foreign and local investors, ultimately leading to significant growth in the industry and increased foreign exchange earnings for Nigeria. He emphasised the importance of fully implementing these directives to improve project delivery speed, reduce waste and lower project costs.
According to Onwualu, these reforms come at a crucial time when Nigeria’s foreign reserves are projected to decrease by $8 billion in 2024. By promoting investment and efficiency in the oil and gas sector, the directives offer hope for bolstering the nation’s economy.
NAEng also recommended extending these policies to support gas exploration efforts and enhance accountability. They suggested offering economic incentives to increase oil production levels from new and existing fields facing natural decline. Additionally, they urged prompt action on approving the acquisition of assets from exiting international oil companies (IOCs) by indigenous entities to encourage investment and prevent capital flight.
However, the Academy emphasised the urgent need to diversify the economy and reduce dependence on crude oil exports. With global efforts to combat climate change, there is a looming threat of decreased demand for crude oil in the future. Onwualu expressed concerns about Nigeria’s heavy reliance on crude oil for foreign exchange earnings and urged proactive measures to prepare for potential economic challenges.
Former president Buhari’s commitment to achieving net zero carbon neutrality by 2060, as outlined in Nigeria’s Energy Transition Plan, underscored the importance of diversifying the economy away from oil dependency. NAEng stressed the need for strategic planning and policy implementation to navigate the transition towards a more sustainable and diversified economy.
NAEng’s commendation of President Tinubu’s oil and gas reforms reflects a recognition of the potential benefits for Nigeria’s economy. However, they underscored the importance of addressing broader economic challenges and transitioning towards a more sustainable and resilient economic model in the face of global trends and commitments to combat climate change.
