The oil and gas sector will continue to play a critical role in Nigeria's economic growth and development. Nigeria is the 10th largest oil producer in the world with proven reserves of nearly 40 billion barrels of oil and 7th largest owner of proven gas reserves slightly less than 200 (187) trillion Cubic feet of gas. At current extraction rate, an average of 2 million barrels per day, our oil & gas reserves are expected to last more than 100 years.
 
National oil reserves have progressively declined since 2007 due to an annual Reserve Replacement Ratio (RRR) of about 70%, occasioned by technical and economic factors. In 2014, however, there was a positive increase with a little over one hundred million (100,000,000) barrels of oil added to the national reserves. This increase is very marginal and reflective of the need for effective instruments that will grow the reserves volume.

It should be noted that the current national reserves include those of blocks that have not been produced for close to thirty (30) years due to community restiveness. This implies that because the reserves in these areas, are impossible to monetise, they can only be classified as resources by responsible organizations such as the Security and Exchange Commission (SEC), Petroleum Resource Management Systems (PRMS) and others.
 
Gas reserves have previously been discovered as an asset base attached to oil finds. Numerous OPEC countries who have found ways to monetise their gas continue to thrive even within a cycle of low oil prices. As a result of the benefits, they built up repositories in their gas reserves in the 1980s. Also, the shale gas find has shaped both the oil and gas prices. For these reasons, we must emulate these gas-producing economies and put in place strategies to find new gas reserves, monetise them, and bring gas flare to the barest minimum. 

Policy Objectives

1. Expand crude oil and natural gas production by increasing reserves in the long-term and boosting 'producibility' of existing conventional fields in the short and medium term.  By 2025, Nigeria shall produce a minimum of 5 million per barrels per day.

2. Increase the contribution of the downstream sector to GDP from 0.5% to at least 2% by 2025 by increasing the quantity of petroleum being refined, consumed and exported. Also, expand domestic gas production to meet power generation and manufacturing demand. 

3. More efficient management of revenue flows from the oil and gas sector by ensuring transparency and accountability in the operation of all private and public institutions operating in the sector.

4. Strengthening of the regulatory framework to create a functional, fair and transparent upstream and downstream oil and gas market and to stir competition that will eventually improve efficiency and breed higher quality of service. The framework will be such as to ensure confidence in the system.  This shall include implementing the petroleum industrial bill (PIB), including the National Oil Policy, National Gas Policy and Downstream Gas Act.

This will enable the commercial regulation of the sector as well as improve transparent licensing and non-discriminate access to pipelines.

What We Will Do

1. Federal Government (FG) will create policies and a transparent incentive regime that will allow for purposeful growth of the national reserve base for both oil and gas.

Specifically, investors will be incentivised to:

• · Tap the unexploited resources in the mature Niger Delta Basin through deliberate policies that will encourage in-fill drilling, enhanced oil recovery, improved oil recovery, pressure maintenance, full field delineation and development, development of far-flung assets, uncovering the hitherto unexplored deep-laying resources, unitization of resources and so on.
• · Explore the Frontier Basins: The inland basins have abundant untapped volumes of oil and gas. This is confirmed by the discovery of gas in Anambra, Benue Trough and Chad Basins.
• · The greatest challenge being faced by prospective investors seems to be the non-availability of good quality speculative seismic data. Government will, therefore, incentivize multi-client data gathering companies to collaborate with the Department of Petroleum Resources (DPR) to encourage multi-client data gathering operations in these zones through the provision of incentives, that may lead to increased exploration activities.

2. To boost 'producibility' and increase reserves, the government will reconsider the introduction of the Marginal Fields bid round which began with, but was suspended by, the immediate past administration.  Also, to encourage more exploration and boost the nation's 'producibility', Blocks' Bid Round will be considered.

3. In order to improve domestic supply of refined petroleum products government will incentivize those investors that are willing to cite modular refineries in the North to source crude from neighbouring Niger and Chad via pipeline to be constructed under Public Private Partnership.

4. Promote Gas-Power Sector linkages: There is a dire need for more linkages between the Gas and Power sector. Policy direction will strengthen the provision of gas assets for power consumption.  This implies that we shall revisit the last government policy of unending pipeline-to-power plant construction.

5. To manage revenue flows more efficiently and ensure to transparency and accountability, we shall embark on the digitalization of the internal processes of the NNPC. Similarly, we shall ensure timely publication of revenue earnings from Petroleum operations by CBN and Federal Ministry of Finance. 

6. We shall deal decisively with security issues, pipeline vandalism and crude oil theft. We shall, deploy modern technology in pipeline surveillance as an optimal way of controlling the menace of vandalism and crude theft.

7. We shall intensify our engagement with local communities in the oil production zones to understand their grievances and workout best ways to ameliorate their social and economic conditions.