Vice President receives oil and gas report
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Feb 1, 2005, 17:15

The National Committee on Oil and Gas Policy on 31 January turned in a draft report to Vice President Atiku Abubakar at the State House in Abuja.

At the occasion the Vice President indicated Government’s preference for the local refining of petroleum products to boost the country’s revenue base.

Admitting that the diversification of the downstream sector of the oil and gas industry is long overdue, Abubakar said that local refining would boost value added export.

He also stated that the Committee was set up by the National Economic Council (NEC) to:

• Ease the bottlenecks observed in the oil and gas sector
• Assess the issues and problems of the sector thoroughly
• Make recommendations on an oil and gas policy, joint venture cash calls, the crude oil account operated by the NNPC and the issue of subsidy in the oil sector.

The Committee Chairman, Dr Bright Okogu suggested that Government should continue to keep up with its cash call obligations as it has done in recent years, so as to ensure that the integrity of upstream assets is maintained and the target reserve level is attained.

The Committee also asked Government not to sell its entire stake in the upstream sector in order to solve cash call payment problems and limit itself to royalty and tax collection. This, the Committee contended, would not be in the long-term interest of the country.

Other recommendations of the Committee are:

• Commercialisation of the Nigerian National Petroleum Corporation (NNPC), which should be granted autonomy to enable it develop its own balance sheet
• That Government sustains the drive for deregulation and makes efforts to channel savings from this policy to key social and infrastructural sectors of the economy
• Refurbishing, commercialisation and privatisation of refineries
• Encouragement of the establishment of private refineries
• That Government should develop an effective communication strategy to sensitise the public on the rationale for subsidy withdrawal
• That products like kerosene be subsidised but coloured to discourage diversion
• That an integrated and seamless oil and gas policy is needed for the country to help eliminate ambiguities in the operation of the industry.

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