Nigeria Says Oil Sector Still Dominated By Foreigners Despite Government’s Efforts

Bigeria’s federal government, at the the 2023 Nigerian Oil and Gas Opportunity Fair (NOGOF), lamented that despite efforts to increase the level of domesticate firms’ participation in the oil and gas industry in Nigeria, the sector still remains largely dominated by foreign entities.

Speaking at the NOGOF 2023, the Minister of Interior, Mr Rauf Aregbesola, who was a guest at the event, noted that for Nigeria to gain from its resources, it must ensure domestication and value-addition.

However, THISDAY recalls that since the enactment of the Local Content Act in 2010, Nigeria has made steady progress from 5 per cent to about 54 per cent in recent times, in terms of in-country expertise and is set to hit 70 per cent in 2027.

Aregbesola, who was represented by the Comptroller of Corrections, Nigerian Correctional Service, Rivers State, Felix Lawrence, stressed that Nigeria must therefore take research in the oil and gas industry seriously, before the expected extinction of fossil fuels.

“Oil is a dominant player in the nation’s economy. Sadly, we have not gone far in the domestication and ownership of this major industry and we have not been able to leverage it for industrialisation or economic development that oil should have brought.

“In spite of all the effort of the government, the sector is still dominated by foreign firms in exploration and extraction and refining. With Nigeria just at the level of services and marketing, the bulk of the petroleum products, including lubricants, is largely imported within the value-added chain.

“The time has come for Nigeria’s stakeholders and the oil industry to begin to take ownership to domesticate every aspect of the industry, technology and the requisite knowledge base. Our indigenous companies should begin to invest in acquisition, technology processing and research in all aspects of petroleum,” he stated.

The research institutes, Aregbesola maintained, should be well funded, not by governments alone, but by other stakeholders who should also ponder over how to expand the knowledge base and create or adapt specific technology to Nigeria’s specific needs in the oil industry.

“The oil industry should get off the dependency syndrome. Yes, we welcome foreign players. We want more investors, but we should be in the driver’s seat because it is to own gain. We should not only take our destiny in our hands, we should dominate the oil and gas industry in Sub-Saharan Africa. We should deploy gas to produce electricity for domestic consumption.

 “And we will be making 10 times revenue on finished products than on primary products, which will create more wealth and prosperity for the nation.

“Lastly, as the world transitions to electric motor vehicles, we should also be able to plan for the alternative use of oil in a way that will not disrupt our economy and when the day eventually arrives, we should be able to have an alternative,” he noted.

Also speaking on a panel at the three-day event, the Executive Vice President, Gas, Power and New Energy, NNPC, Mohammed Ahmed, when questioned on the state of the federal government’s autogas scheme, urged Nigerians to approach the government for answers.

He argued that post-Petroleum Industry Act (PIA), the NNPC is now a limited liability company and is not in a position to speak for the federal government on the autogas programme.

On December 1, 2020, President Muhammadu Buhari launched the National Autogas Scheme, promising Nigerians that the nation had finally made an alternative move to maximise its rich natural gas reserves by enhancing in-country consumption.

According to the president, by 2021, the country would have converted 1 million cars to cushion the impact of petroleum subsidy removal, which the government said, has gulped trillions of naira.

But hopes that the scheme would succeed have since dimmed, as not much has been heard about it. In all, it was supposed to create about 12.5 million direct and indirect jobs for Nigerians.

“To the point of autogas, nothing has stopped, it’s work in progress. Its people like you who are supposed to invest that are not investing. If you can establish a conversion field, then people are ready to supply the gas. But when you do not have the infrastructure, it won’t be built.

“I also want to put it on record, the NNPC of pre-PIA is not the NNPC of today. Yesterday it was NNPC, today it is NNPCL.  What does that mean? It means we are now a Limited Liability Company.

“A limited liability cannot speak on behalf of the government. So, I believe that if you want to get good clarification on some of these challenges, the appropriate channel would be the ministry of petroleum resources,” he said.

He added: “But to assuage your fears, the vehicles that were promised to be brought in have to be manufactured and I believe that everything is being done about that. By and large, note that subsidy or no subsidy, we need to migrate to the use of gas.

“Simply put, the federal government cannot continue to pay for your fuel and I can say this comfortably that it is your fuel, not for those in the villages because they do not have two to three cars. So, who are we subsidising? he queried.

Also, the Managing Director of the Nigerian Exploration and Production Company (NEPL), an NNPC subsidiary, Ali Zarah, said the unit was focusing on delivering 60 oil wells between 2023 and 2024.

He explained that there are now local companies taking over from their foreign counterparts, thanks to the NCDMB, stressing that the organisation will continue to support the activities of the local content board.

“Our drilling campaign alone, we are going to deliver over 60 wells between now and 2024. This creates opportunities for rig provision, ancillary services and a host of other things to do,” he noted.

He further stressed that the NEPL has continued to empower its host communities, and now operates safely while observing all environmental regulations.

Emmanuel Addeh in Abuja and Olusegun Samuel in Yenagoa

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