Communique of MEMAN Webinar on Optimising the Nigerian Oil and Gas Industry

The Major Energies Marketers Association of Nigeria (MEMAN), in collaboration with DAPPMAN, CORAN, ARDA, PETROAN, hosted a virtual webinar on the theme “Optimising the Nigerian Oil and Gas Industry.” The event brought together key stakeholders from various sectors of the oil and gas industry to discuss challenges, opportunities, and strategic initiatives for enhancing the sector’s efficiency and sustainability.

Key Discussion Points

1. Regulatory Challenges and Deregulation:
   • Participants discussed the implications of recent price hikes in petroleum products and emphasized the need for full market deregulation. A market-driven pricing mechanism was advocated to promote competitiveness and operational efficiency. The removal of government controls on pricing was seen as essential to foster a more dynamic and responsive industry.
2. Energy Transition and Diversification:
   • The discussions underscored the importance of transitioning towards cleaner energy sources, including Compressed Natural Gas (CNG) and Liquefied Petroleum Gas (LPG). Investments in renewable energy infrastructure and modular refineries were highlighted as critical steps for enhancing domestic refining capacity and reducing reliance on imports.
3. Opportunities for Investment:
   • Attracting both local and foreign investments was identified as a priority to support infrastructure development in the sector. A clear regulatory framework and targeted incentives were seen as necessary to encourage investment and foster growth.
4. Proposed Petroleum Committee:
   • A proposal was made for establishing a new committee structure in the petroleum sector, inspired by the Bankers’ Committee in Nigeria. This structure would include:
     • Midstream and Downstream Industry Coordination Committee: Focused on enhancing collaboration within these sectors, chaired by the Authority Chief Executive (ACE) of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
     • Industry Interface Committee: To manage interactions between the upstream and downstream sectors, co-chaired by the ACE and the CCE.
     • Petroleum Industry Consultative Assembly: A comprehensive assembly bringing together stakeholders from across the oil and gas sectors, chaired by the Minister of State for Petroleum (Oil).

The aim of these committees is to foster collaboration, ensure regulatory compliance, facilitate conflict resolution, and provide strategic oversight, akin to the role played by the Bankers’ Committee in the banking sector.

5. Collaboration and Coordination:
   • The creation of industry-wide consultative committees was suggested to enhance collaboration, innovation, and conflict resolution. Addressing supply chain inefficiencies and infrastructure deficits was deemed crucial for long-term sustainability.
6. Customer-Centric Approaches:
   • Emphasizing a customer-focused approach, participants highlighted the need to adapt to changing consumer preferences, such as the rising demand for electric vehicles and alternative energy sources.
7. Full Deregulation and Market Liberalization:
   • The call for complete deregulation and market liberalization was reiterated. The benefits include improved efficiency, enhanced product availability, and increased private sector participation.
8. Infrastructure and Distribution:
   • Significant investment in infrastructure is needed to enhance distribution and storage of petroleum products. The adoption of new technologies was advocated to optimize supply chains, reduce smuggling, and prevent adulteration.
9. Support for Local Refineries:
   • There was a strong emphasis on supporting local refineries to decrease dependency on imported petroleum products. Freedom for marketers to purchase crude oil from local and international sources and for refineries to enter into processing agreements with retail companies was also proposed.
10. Environmental and Social Governance (ESG) Practices:
    • Implementing sustainable practices, such as reducing gas flaring, promoting renewable energy use, and investing in carbon capture and storage technologies, was emphasized to align with global sustainability goals.
11. Regulatory and Policy Framework:
    • The need for a clearer and more supportive regulatory environment was stressed, with references to the Petroleum Industry Act (PIA) and its provisions. Better implementation of policies is necessary to facilitate easier licensing, investment, and refinery operations.
12. Promotion of Local Production of Plastics:

• The webinar also highlighted Nigeria’s potential to become a significant producer of plastics and petrochemical products. Stakeholders discussed leveraging the country’s abundant natural gas resources to develop a robust petrochemical industry. This would reduce imports, create jobs, and support the local economy. Emphasis was placed on establishing the necessary infrastructure, such as petrochemical complexes, and adopting policies that encourage local manufacturing and value addition. The shift toward producing plastics domestically aligns with the broader strategy of industrial diversification and economic resilience.

Conclusion:

The webinar concluded with a commitment from all stakeholders to work collaboratively toward optimizing the Nigerian oil and gas industry. Emphasis was placed on the need for strategic investments, policy reforms, and innovative practices that align with global standards and sustainability goals. The proposed establishment of the Petroleum Committee will serve as a key platform for fostering collaboration and guiding the sector through its ongoing transition.