Two issues marred the achievements of the Muhammadu Buhari administration in the oil and gas industry. The administration succeeded in the passage of the Petroleum Industry Act (PIA) 2021 but escalated scales of oil theft and the consequential low oil production in the upstream sector and reoccurring incidence of petrol scarcity during the administration net out the merits of the PIA. The Bola Tinubu-led administration is inheriting many issues in the oil and gas industry, including large-scale oil theft, an unattractive investment climate, a perennial subsidy regime, and a susceptible distribution network, among others that require decisive actions for the prosperity of his administration.
The new administration has attractive plans for the industry. According to the administration’s Renewed Hope document, these plans include:
- To increase crude oil production to 2.6mmb/d by 2027 and 4mmb/d by 2030;
- Increase the indigenous share of crude oil production to over 1mmb/d by 2027;
- Achieve full deregulation of midstream gas prices within 6 months, increase gas production by 20%, and complete critical gas infrastructure projects by 2027;
- Accelerate full implementation of the PIA and implement additional favourable policies to attract investment in Deepwater assets within 6 months.
- Achieve stability of petroleum product supply by fully deregulating the downstream sector and ensuring that local refinery capacity will meet domestic consumption needs; and
- Secure Public-Private Partnerships (PPP) and international partnerships towards financing infrastructure development.
Analysts insist that the choice of appointment of the Minister of Petroleum Resources will signal how the industry will perform under the new administration. Notwithstanding the appointment, a quick intervention of the administration is required to tame the scale of oil theft and divestment by taking a different approach, including institutional reforms, advanced technology, and integrated oil and gas production in the upstream sector, and developing a cautious plan to phase out the subsidy regime and secure local supply in the downstream oil sector, leveraging the Dangote refinery and the national refineries.
