NIGERIA OIL AND GAS BUSINESS: A TYPICAL AND CLASSICAL FAILURE 2





….from part 1, this is the concluding part...

 “The purpose of Propaganda is to make one set of people forget that other sets of people  are human” -Aldous Huxley

Let us come back home now, how much is Nigeria daily Oil production per day? According to Google, Nigeria daily production is 2.19 million bpd. But Dr. Atul, during our discussion put it like “Nigeria has capacity of 2.5 million barrel/day but their current production is lower at approximately 1,459 million bpd.  Quoting my mentor, he said,  ” See how much Nigeria is losing in terms of US$ annually and on recurring basis" I know both sources are right. Only that, the latter source is most current.

Now this is my understanding… Nigeria has oil, proven Oil deposit of about 37.50 billion barrels, with very low daily production. The reality on ground is that Nigeria has what USA has and that same resources, is given USA close to half a Trillion US$ annually. So what’s the problem with us, why are we still borrowing and what’s in there, in our Budget?

Let me start looking at it from those that believe the gimmick that PBAT government made a tough decision on “removal of subsidy”, I will tell you it is nothing but a mere contrivance. The clear pointer to prove my point is that how much was spent to mitigate the effect subsidy removal, is it not more than what was removed in the first place? The negative effect today on the general economy of the country is continuous which no-one can be ascertain when it would stop, the effect like Inflation (this is local and self-made inflation, I know there exist Global inflation). The easiest decision to make is removal without thinking of the consequences and to who that are directly affected? 

Let me share with you what the tough decision will look like!

The tough decisions are:

§     1.  How Nigeria can increase its daily Oil Production to say 5million bpd or set a reasonable and achievable  target with time on increasing our daily production.

§     2. To find every means that Oil theft is reduced to the barest minimum or total eradication

§    3. To have a transparency in Oil Business transaction so that every concern citizen can have a reliable data like we can have in case of USA Oil and Natural Gas Business as estimated earlier on.

§    4.  Fighting Corruption within the system and making sure the Entrepreneurs and Industrialist in Oil and Gas will have conducive environment to play their individual card.

§      5. Support building more Local Refinery so that there’s going to be a force to demand more production locally rather than “Produce to pay Debts”

§      6.  Experts can add their own

These are what I believe to be tough decisions,

Let us assume another 1million barrel is added to the current Nigeria oil production today and assume all our three Refineries (Port Harcourt, Warri and Kaduna) are functional with enough stock to feed and Dangote Refinery with like three other Private refineries in Nigeria alone. Therein a situation where all these refineries are stocked locally, how much do you think Petrol, Diesel, Jet Fuel, Kerosene will be sold for locals per litre? How many of our Neighboring country will benefit from it at a cheaper rate and how vibrant do you think Business will be flowing in other sector in the country? 

 Nigeria Natural Gas Potential

According Google, currently, Nigeria has by far one of the largest gas reserves at 203 trillion ft3, ranked 9th Natural Gas reserves country in the world. The natural gas reserves are estimated to be sufficient to sustain production rates up to 60 years. Don’t be surprise, the gas potential can last for more 306 years. Kindly research all these above facts.




Research gate data, gave us that Algeria is the Africa Largest exporter of Natural Gas with 52 billion m3, follow by Nigeria 29.7 billion m3 annually. Nigerians main use of Natural Gas is heating and Cooking. We also have  generating plants that are gas fired and some use in plastic production, Fertilizers etc

How are we harnessing the gas potential, what type of Technology is Algeria is using that we can’t afford to increase the potential?  How much investment do we really needed to achieve certain target of say 50Billion m3.

Like what we see on how much USA is making annually, in 2022, Nigeria exported $9.04B in Petroleum gas. On the 27th Oct. I read it through VP Shetimma that Nigeria earns around $5B from gas production, a figure that is 40% less than that of Egypt which has around 30% of Nigeria Reserves.

Is this Progress or Retrogress, in 2022 it was $9.04B, now Aug 2024, $5B. What is the cause of such down dwindling?

The tough decision to be made by our Government on Gas Production and export is just to set the target of its annual increase for certain number of years. For argument’s sake, our current export capacity is 27.9billion m3, we wanted to hit 50billion m3 in say 5years then, we can say we add 5billion m3 annually to our production. What do we need to achieve that is what we need to work on and find our way around every year, in the next 5 years we would be around 52.7billion m3.

You might say it is easier said than done but I will tell you that is what makes it tough decision. If it is easy, it won't be call tough! It takes zeal and courage to do. 

In conclusion, the point I wanted to make is that, our government should be serious about a Business that can single handedly give birth to others while in diversification. Oil and Gas today is making other countries a great nation but the reverse is the case for us in Nigeria. What the Government thought to be tough decision on Oil and Gas policy is what I believed to be the laziest decision I can ever witness. The tough decisions are those points outlined and because to achieve every bit of it needed zeal and courage because there are saboteurs that are milking from the existing status. What really makes it tough is that, the masses will not suffer and experience backwardness in business by self-inflicted inflation. 

Creating Regional Development agencies without focus on the Business that will fund their Development Plan is nothing but a mere waste of resources. Policies that will not support SMEs, MSMEs and Entrepreneur Business is a way to impoverish the masses. Like any business or Individual, the government is bound to incur more debt when she is spending beyond what she is earning.

In our own case in Nigeria, we have what it takes to achieve greatness, to have infrastructure of our own design, to have best Health System, a very good Education Standard and enough food production. But unfortunately, our Leaders are looking other way and not ready to put in the effort to harness our enormous potential in Oil and Gas. 

Note: I purposely ignored the role that NNPCL has, have and having contributed in Nigeria Oil Business failures because a Leader with direction should know what to do to make sure NNPCL accountable but something is not adding up

 

Babatunde Mutiu Kolawole (10 10)

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https://www.linkedin.com/in/babatunde-kolawole-8120001a/

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