Bane of Nigeria’s oil sector

With the identified shortfalls in the oil and gas industry over the years, it has become so obvious that the virtual appointment of people that lack necessary technical know-how to oversee the nation’s oil and gas industry is largely responsible for the abysmal performance recorded in the sector.

In the views of experts, over the years, the oil and gas sector has performed below average,impacting negatively on the economy . According to available statistics, taking a ten-year reading, the sector grew at the rate of 3.3 per cent in 2004; 0.5 per cent in 2005, and then a downturn of 4.5 per cent for 2006 and 2007; -6.2 per cent for 2008 and -1.3 per cent in 2009. The years 2010 through to 2014 did not fair better, either. Over these same years, comparatively, the growth rate in the non-oil sector is generally and consistently more stable than that of the oil and gas industry.

Furthermore, due to the lack of proper supervision and coordination, foreign trade has continued to play a significant role in the Nigerian economy. The argument that Nigeria is the 10th largest oil producer in the world with proven oil reserve of about 36 billion barrels; and gas reserve of about 185 Trillion Cubit Feet (TCF) among others, is given prominence more on paper and abject environmental degradation than inidentifiable dividends. This is a far cry from what is obtainable in other nations of the worldwith even lesser oil deposits. The reality on ground does not in any way correspond with the nation’s over 50 years of oil exploration vis-à-vis its attendant turnover.

This, no doubt, raises a lot of questions about the competence of those who have at one time or the other called the shots over the sector. Nigeria has witnessed managers of the industry become so powerful with so much over-bearing influence within a short period of appointment, whereas the related institutions are pathetically weak, practically rendered inactive and ineffective. The sector’s statutory obligations are conducted in utmost secrecy akin to what obtains in privatelyowned entities.

This development is contrary to the letter and spirit of transparency and accountability as espoused by the Nigeria Extractive Industries Transparency Initiative Act 2007 also known as The NEITI Act, which (provides for the establishment of NEITI, and is charged (among other things)with the responsibility for the development of a framework for transparency and accountability in the reporting and disclosure by all extractive industry companies of revenue due to or paid to the Federal Government.

From the forgoing, it is imperative that the need to secure the services of experts and technocrats who know their onions, and the nitty-gritty of a highly competitive oil and gas industry is more than justifiable. This is especially so at this crucial moment when dictates from the international market is affecting (negatively) the Nigerian economy. Similarly, the decision by the United States to cut further purchase of Nigerian crude oil is not in any way a good omen for the Country. These historic and emerging trends, coupled with the present fall in the international prices of crude oil (albeit heartbreaking and detrimental to development) constitute a blessing somewhat. Nigeria has an opportunity to take decisive steps by looking inward with a view to being pro-active, re-strategize, and proffer lasting solutions to the myriads of problems that have stunted the growth of the Nigerian oil industry since inception.

The nation, at this crucial stage, needs independent-minded technocrats (either as an individual or as a team) who need not to be spoon-fed on how best to marry the well-laid out reforms, supported with proper enabling laws and legislations, backed with the right attitude and the willingness to serve the nation meritoriously – being a complete departure from the self aggrandizements, a major hallmark of past administrations in the country. In line with the proposition to reposition the sector for better performance, the following points should be considered.
Firstly,the pursuit of the local content expansion should be embraced as an important national agenda. Government can achieve over 70 percent total contribution of the oil and gas industry to the GDP in the medium term if square pegs are put in square holes.