A new study has revealed an ongoing boom in the United Kingdom’s (UK) oil sector, which is in stark contrast to Nigeria’s stagnating oil industry.
The “unprecedented growth” in investment being made in the United Kingdom (UK) industry could see the sector create between 40,000 and 50,000 new jobs in 2013, according to a new recruitment analysis by jobs website Oilandgaspeople.com.
The prognosis for job creation in the Nigerian oil and gas sector is however dire, as stakeholders predict employment in the sector will be 40 percent lower than it would have been with pre-petroleum industry bill (PIB) terms, mostly as a result of a 60 percent drop in investments.
Industry watchers say the low capacity of Nigeria’s oil sector to deliver jobs indicates poor policy formulation and insensitivity on the part of government, which appears more interested in rent collection, than in the welfare of the populace.
There were 660,000 people employed in Nigeria’s oil sector in 2012, by 2020 however, the number is expected to fall to 440,000 if the current PIB fiscal terms are maintained, stakeholders say.
The 200 plus-page Petroleum Industry Bill (PIB) includes plans to partly privatise and list the state oil firm, the Nigerian National Petroleum Corporation (NNPC) tax oil company profits at up to 50 percent for deep offshore, and give the oil minister supervisory powers over all institutions in the industry.
Industry sources however say that the prospect of attracting large investments under the proposed PIB is seriously at risk, as the fiscal terms are mostly uneconomic.
Two major reasons are responsible for the UK oil sector jobs boom, according to the report.
The study pointed to the record 27 licensing round seeing 167 new licences awarded in October 2012, as well as positive tax changes as a reason for the boom and the hike in investment levels.
Nigeria has not conducted a successful oil licensing bid round in nearly six years. The Federal Government shelved plans to conduct bid rounds in 2009 and 2010 due to the non-passage of the PIB, coupled with pending cases before the courts and arbitration involving multinational oil companies and the government.
The oil licensing rounds which were held in 2005, 2006 and 2007 saw some efforts at replacing the former discretionary award procedures with a more open and competitive process.
However, the bid rounds were fraught with complaints of irregularities, prompting the Federal Government to revoke some oil blocks awarded during the bidding rounds.
Booming development rates in the UK, as well as the potential addition of shale gas exploration, are also boosting vacancy levels, according to the study.