Two recent events further underscore the centrality of Nigeria’s petroleum sector to the country’s economy, and the need for strategic approaches towards harnessing the sector for the country’s economic recovery. First was the July 2, 2024 declaration of a state of emergency on oil and gas production, to raise output to 2 million barrels per day by Mele Kyari, the Group Chief Executive Officer of Nigerian National Petroleum Corporation Ltd .
With an enormous oil and gas reserves of over 37 billion barrels of proven crude oil reserves, over 207 trillion cubic feet , and 600 tcf of proven and contingent gas reserves, Nigeria’s average oil production in the last 20 to 30 years had averaged 2.6million bpd, largely through joint ventures between the NNPCL and International Oil Companies as joint venture partners.
Still on concerns about sovereignty, countries such as Qatar, Turkiye, Saudi Arabia, Bahrain, United Arab Emirates, Germany and Italy, which host foreign military bases, have continued to record impressive economic outcomes. During some of Nigeria’s most pressing periods, such as the civil war and onset of terrorism, it was Western countries such as the United Kingdom and United States that provided many of the most needed military equipment, training and support.
From a cost-benefit perspective, it may therefore be more profitable for the current Nigerian constitutional review process to allow some level of sub-national government ownership of petroleum and mineral resources, or increased derivation, but with strict conditions on elimination of insecurity and vandalism, that should guarantee at least 3 million bpd production in 18 months.