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Oil, gas sector contributes less than 10% to Nigeria’s GDP

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Oil, gas sector contributes less than 10% to Nigeria's GDP

Oil, gas sector contributes less than 10% to Nigeria’s GDP

The oil and gas sector, long perceived as Nigeria’s economic backbone, has contributed less than 10% to the country’s Gross Domestic Product (GDP), revealed Ofoegbu Kelechi, Executive Commissioner, Corporate Service Administration at the Nigerian Upstream Petroleum Regulatory Commission (NUPRC). Kelechi’s remarks came during the ongoing Nigeria Oil and Gas Week in Abuja, highlighting the sector’s underwhelming impact on the nation’s economy.

A Call for a Broader Perspective

Speaking at a panel session themed “Showcasing Opportunities, Driving Investment, Meeting Energy Demand,” with a sub-theme “Nigerian Content as an Enabler,” Kelechi underscored the need to view Nigerian content not as an end but a means to an economic renaissance. He emphasized that genuine impact would be felt only when the sector significantly enhances the lives and economy of Nigeria.

“As a regulatory body, we see Nigerian content as creating and retaining value. Our role is to build capacity, award licenses, leases, and permits, and facilitate access to funding and technology. This approach ensures that participants in the upstream sector can develop their assets and contribute meaningfully to the economy,” Kelechi stated.

Transformative Initiatives

Under the Nigerian Petroleum Industry Act (PIA), the NUPRC has shifted from merely awarding licenses to actively enabling business growth. Kelechi explained that the commission’s mandate includes promoting an enabling environment for investment in upstream petroleum operations, with Nigerian content being a critical pillar of this strategy.

“The board doesn’t just hand over licenses and walk away. We provide ongoing support to awardees, helping them access funding, technology, and strengthen governance. This support is crucial for them to develop their assigned blocks and transactions,” Kelechi added.

The Nigerian Gas Commercialisation Program

Kelechi highlighted the Nigerian Gas Commercialisation Program as an example of the NUPRC’s hands-on approach. “We’ve awarded flare sites and are actively helping awardees develop these sites, reflecting our commitment to turning regulatory oversight into business enablement,” he said.

Focus on Capacity Building and Technology

The NUPRC’s strategy involves significant capacity building and technology adoption. “We focus on the end game: achieving higher numbers in terms of contributions to GDP and real economic impact. Until we see these results, we cannot rest on our laurels,” Kelechi emphasized.

 A Shift from the Past

Kelechi pointed out that the former Department of Petroleum Resources (DPR) operated primarily as a license-awarding institution. In contrast, the NUPRC, established under the PIA, sees itself as a business enabler. “Our role is not just regulatory but also developmental. We aim to create an environment that fosters investment and growth in the upstream sector,” he said.

The Path Forward

While celebrating past achievements, Kelechi urged stakeholders to remain focused on the ultimate goal: substantial economic and social impact. “We must ensure that our efforts translate into tangible benefits for the Nigerian people. This is the true measure of success for our industry,” he concluded.

Industry Reactions and Future Prospects

Industry experts and stakeholders have lauded the NUPRC’s proactive approach. The focus on capacity building, technology adoption, and continuous support for awardees is seen as a crucial step toward revitalizing the sector and boosting its GDP contribution.

However, challenges remain. The sector must address issues such as regulatory bottlenecks, funding constraints, and infrastructural deficits to realize its full potential. The NUPRC’s emphasis on enabling business growth and fostering a conducive investment environment is expected to play a significant role in overcoming these hurdles.

 

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