A Review of the Nigerian Energy Industry

Buhari’s election sends positive signals for nation’s oil industry

General Mohammadu Buhari, Nigeria's President-elect.
General Mohammadu Buhari, Nigeria’s President-elect.

*Stalled oil projects could be revived
*Militant groups say Buhari “right choice

Oscarline Onwuemenyi,
with agency reports

02 April 2015, Sweetcrude, Abuja – The reaction from the Nigerian oil industry to the election of former military ruler Muhammadu Buhari has been overwhelmingly positive, with some officials predicting that some suspended oil projects could be revived and even the once-feared militant group, the Movement for the Emancipation of the Niger Delta, MEND, welcoming the result.

Buhari, who ruled Nigeria between 1983 and 1985, secured 15.4 million votes to defeat incumbent Goodluck Jonathan who secured 12.8 million votes, the head of the Independent National Electoral Commission, Prof. Jega said Wednesday.

Industry sources, who had previously feared that a Buhari victory could trigger violence in the oil-rich Niger Delta region, said the fact that the election, adjudged by local and foreign observers to be mostly transparent, had doused the expected tension.

According to the Managing Director of Danvic Petroleum International Corp., Mr. Mayowa Afe, “That the election was fairly peaceful and the results declared without any rancor has helped to clear the uncertainty that trailed the election and will restore investors’ confidence in Nigeria.”

An industry analyst, Victor Eromosele, added, “That the election is seen to have been fairly peaceful should remove fears of likely unrest in the country, the oil region especially. Expect to see many of suspended projects back on track soon.”

The rescinding fears over a new outbreak of violence in the oil-producing Niger Delta region was further bolstered after militant group, the Movement for the Emancipation of the Niger-Delta, MEND, which terrorized Nigeria’s oil industry for years, Wednesday described the emergence of Buhari as the “right choice.”

“The Nigerian people have spoken and elected Muhammadu Buhari to be the next President of Nigeria,” MEND said in an emailed statement signed by the group’s spokesman under the usual pseudonym Jomo Gbomo.

“In doing so, we have not only made the right choice of a new leadership, we have also reaffirmed the strength of our democracy,” it said.

Officials from western oil companies, however, expressed cautious optimism over the emergence of a new administration, and urged Buhari, who is expected to be sworn in May 29, to move quickly to tackle crude oil theft.

“There is still palpable tension in the oil region, like in (southern) Rivers state. However, one would expect that the incoming administration will give priority attention to stop oil theft as promised,” said an official who declined to be named.

While state oil firm Nigerian National Petroleum Corp. declined official reaction, some at the company expressed optimism.

“We are expecting, for once, a change in administration of the corporation. I can tell you that the NNPC was headed in wrong direction, but I think with the emergence of a new government, that will be reversed,” an NNPC source said.

Meanwhile, traders active in both the Nigerian crude and gasoline markets said Wednesday they did not expect any immediate change in the sector following the change in leadership, though differences in approach were likely to emerge in due course.

“I don’t think Buhari’s election will have any effect in the short term. On the other hand, longer-term the composition of the government will have an uncertain impact in the Nigerian market,” a European trader said.

“So far we haven’t seen anything out of the ordinary in the market,” another trader said.

A third trader said he expected “oil equilibriums” to change in the coming months as leading officials in the Nigerian oil sector are replaced. But in terms of Nigerian gasoline imports, a source said the importing companies were “well established” and it would be “difficult to replace them.”

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