Mr. Wale Edun, the Minister of Finance and Coordinating Minister for the Economy, has proposed that Nigeria could generate over $13.3 billion yearly by establishing a national asset register by profiling all natural resources and assets, including oil and gas fields that have been abandoned for more than 10 to 15 years.
Edun made known in his presentation at the launch of Afrinvest’s 2023 Nigerian banking sector report on Tuesday, November 15, 2023, in Lagos.
Edun, who was represented by Armstrong Takang, Managing Director of the Ministry of Finance Incorporated, shared the view that the proposed national asset register would serve as the government’s pivotal step towards harnessing Nigeria’s untapped potential and fostering sustainable growth.
He said, “We have oil and gas assets that have been performing sub-optimally for decades, and licenses were given to people 10 to 15 years ago, but they have not invested a single dime in developing those assets.
“Whereas you have other investors that are looking to invest in those assets.
“We need to go back and determine how best to optimise those assets to deliver value for us. It will be cheaper for us to do that than relying on external borrowings,” Edun said.
“So, the message I leave with you today is, yes, we may have headwinds, we may have challenges, but I believe that if we manage our resources, our assets better by joining hands with the government to come up with proposals, we will get out of it,” the Coordinating Minister said.
Mr. Edun further emphasised that the country’s revenue-to-GDP ratio will increase to 25% in 2026 from 8% in 2023. He also added that the successful implementation of the reforms will also raise the tax-to-GDP ratio from 10% this year to 18% by 2026.
EnergyDay’s check showed that Nigeria’s weak government revenue and foreign exchange earnings, despite having proven oil reserves of approximately 37.0 billion, and 193 trillion standard cubic feet (Tscf) of proven natural gas reserves, are further exacerbated by the economic impact of abandoned oil and gas fields.
This situation is influenced by weak institutions and poor governance, which have contributed to the failure to realize the full potential of the oil reserves, resulting in devastating impacts on livelihoods and economies.
Mr. Gbenga Komolafe, Commission’s Chief Executive, Nigerian Upstream Petroleum Regulatory Commission (NUPRC) last year said 17 marginal oil fields are currently producing out of 30 fields awarded since its inception in 1999.
According to him, since its inception, the breakdown of the allocation of the fields to indigenous operators are two (2) fields awarded in 1999, 24 in 2003/2004, one (1) each in 2006 and 2007, and two (2) in 2010.
The NUPRC has concluded the 2020 Marginal Field Bid Round exercise, where 57 fields were put up for bidding, the process led to the issuance of a Petroleum Prospecting License (PPL)to the deserving awardees.