Ever since oil was discovered in Nigeria in 1908 and its sudsequent exploration, it has taken a broad view, determined to play an important role in the oil industry, not just within the sub-region but globally.
Overtime, oil money quickly became almost the single source of income powering the economy and successive rulers aware of this, actively engaged in production, development, storage, transportation and marketing of oil reserves to make more money .
Unlike other oil producing countries that diversified into downstream market, investing in refineries, rebuilding and modernising their refineries? and retail outlets, both home and abroad , refining has become a major problem in Nigeria.
The country can neither expand her output of refined products on a continual basis, nor have the opportunity to sell petrochemicals and byproducts of refining processes around the world.
As bad as that seems, the Nigerian petroleum sector is continually bedeviled by many challenges that have hampered its growth.
Dissecting the problem, the Group Chief Executive of Oando Plc, Mr. Wale Tinubu, said all the sub-sectors in the industry? need reorganisation to make them perform better.
He pointed out that the downstream sector has remained stagnant due to price regulation of products, poor refining capacity, high demurrage charges on imported product, among others.
He emphasised the need for government to deregulate the downstream fully , fix infrastructure and eliminate bureaucratic red tapes that lead to delay in project approval .
In the midstream, Tinubu noted that poor implementation of good policies by government and lack of infrastructure such as pipelines were rapidly behind the rot in the sector .
It is against this backdrop that? reforms in the Nigerian National Petroleum Corporation (NNPC) is imperative for the survival of the oil and gas sector as the survival depends on transparency and accountability.
Omowumi Iledare, a Professor of Petroleum Economics and Policy Research Director, United States Central Gulf and Energy Information Division, said that industry reforms ought to provide simple text information on all contracts.
He explained that the final reform must make the Niger Delta communities principal stakeholders with direct rewards from operators extracting oil in the area in a very transparent manner.
Listing the implications of lack of transparency and accountability of petroleum revenue flow, he said that greed and power struggle among competing elites to control oil revenue sometimes lead to instability of government.
?Others, he said, include inequitable distribution of petroleum wealth, which exacerbates violence as well as ineffective national laws, unenforceable contracts, weak regulatory regimes, and inefficient business environment.
Iledare, however, lamented that these reforms have become dependent on the very political class, whose abuses and excesses ,the reforms are designed to contain, for their effectiveness.
According to him, transparency encourages competition as it enhances industry performance, adding that it discourages fraudulent behaviour and promotes effectiveness, equity, ethics, and efficiency.
“Good governance promotes institutional accountability as accountability empowers institutions to grant rewards and sanctions without interference. It makes national laws effective, increase enforceability of contracts, and strengthens regulatory regimes. It also creates an efficient business environment,” he said.