A Review of the Nigerian Energy Industry

Are we doing the right thing and behaving like we should

02 December 2012, Sweetcrude, Lagos – I attended a CPI lecture delivered by the MD of ExxonMobil who is also the Chairman of the Oil Producers Trade Section (OPTS) of the Lagos Chamber of Commerce and Industry. The lecture was titled “Sustaining Nigeria’s position as Africa’s leading hydrocarbon exporter”. He was able to give us an insight into what actually determines being a leading producer and exporter, what investors look out for, what Nigeria must do and what future ExxonMobil sees through their global research findings. The fact that technology and energy costs was leading investors to explore alternative sources of energy (Biomass, coal, renewables, nuclear, shale gas etc) whilst our focus remained on oil and gas is a major concern. The likely hood that a revolutionary discovery may bankrupt a nation that is solely dependent on one primary source of income made me worry. Compounding issues also include the fact that Brass LNG has been on the drawing board for over 5 years whilst serious countries like Qatar, Angola and a few other nations have since then gotten Final Investment Decision (FID) on comparable projects which are now fully operational.

I discovered that Mark Ward was a part of the Project team who were involved in Exxon Mobil field development, design and construction supervision in Nigeria years before he became MD. His leadership was determined not only by his qualification but by his experience and expertise. A lesson learnt is that we must approach our leadership problem and Nigerian Content solely on the basis of merit. Nothing less !!!!. Our leadership strategy must focus on groomed and nurtured experts whilst ensuring that they are exposed to the right values and principles that determine success.

After the presentation which captured what we must do to remain a leading exporter, I figured out that we are not likely to remain a leader because of the unseriousness of the Nigerian Oil and Gas industry leadership, the lack of a strategy and the tragedy of the fact that we are not working in accordance with any plan to guarantee us energy security in a manner that creates value and maximum socio-economic impact.

I recall the fuel subsidy demonstration’s in January 2012 and the demand for an urgent over haul of the industry which was made by the masses. This resulted in the Minister appointing some highly regarded technocrats with others into three committees and I am now most pained that so many issues have been swept under the carpet by this singular act and not much has changed.

I pondered in my mind and asked myself, what exactly is our National strategy? Who is fitting into whose strategy? Why should we be positioning ourselves to become the greatest exporter of hydrocarbon when we have over 120 million Nigerians in an impoverished state because we have not quite determined how best to enhance and optimise our natural resources for the benefit of ALL. We desperately need patriotic Nigerians who are more concerned about the nation as a whole than in their individual interests. For as long as greed, avarice and corruption continue to drive our actions our systems and laws cannot work.

During the question and answer session, the PIB came up as it has done for the last X years. My major concern was that technocrats are more likely to be out of sync with the Nigerian masses whilst they are also mentally isolated from the politicians who need to be lobbied. It has now become very clear to me why things are getting worse for most Nigerians and better for a few. Nigeria is not a cohesive body of individuals that have a common focus, direction or strategy but a division of interests that plays out under the umbrella of greed and self-gratification.

Cry my beloved country!!!!. A colleague of mine likened Nigeria to a hungry man being starved by his wife, whilst in a “very good” marriage the norm is for the help-meet to feed and nurture the spouse for the common good of the family. What a confusing time to deliberate on the way forward for Nigeria and Nigerian Content. Imagine a $14.7million contract award for a Banquet Hall in Aso Rock and no one is yet to blink an eye lid. How much Nigerian content would this yield and should this be the priority of the leadership? I ask, what should we be doing and how should we be behaving to avoid the casualty of Nigeria becoming a failed state?.

Dr. Ibilola Amao is the Principal Consultant with Lonadek Oil and Gas Consultants, a firm of technical consultants with their core competence in the area of Local Content and Vendor Development. For more information or to reach Dr. Amao you can email her at lolaamao@lonadek.com or visit www.lonadek.com.

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  • We certainly ain’t doing the right thing, neither are we behaving like we should. We feel pained but constrained to note that if the index for determining state failure is anything to go by, Nigeria is already a failed state.