ANGOLA, a resource-rich former Portugese colony was in the news recently as having taken over the reigns of leadership from Nigeria as the leading crude oil producer on the African continent.
For a country which barely five years ago was embroiled in a 30-year civil war that stunted growth and left much of its infrastructure in ruins, it has come a long way indeed. Same however, cannot be said of Nigeria which though equally resource-rich, is caught up in a widening gyre that threatens to blight attempts at economic emancipation and the march towards attainment of nationhood.
Perhaps, an easy way to explain Nigeria�s dwindling oil fortunes is to lay the blame at the doorstep of intransigent separatist rebels in the Niger-Delta whose activities in the last three years have visited an unparalleled reign of violence leaving in its wake an average one million barrels per day of shut-in crude oil production; deferred execution of development projects; attraction of travel bans by foreign government on their nationals; arson; abduction; an ever increasing death toll; sorrow, tears and blood (apologies to Fela Anikulapo Kuti). However, a careful appraisal of input from industry operators revealed that the dwindling fortunes of the Nigeria oil and gas industry is purely a case of leadership failure.
Angola boasts of 22 deepwater assets out of which 19 are fully developed, while Nigeria lays claim to 44 deepwater assets out of which only four have been developed underscoring the commitment of both countries to the development of their assets. It may be pertinent to note that the Angolan assets were developed rapidly over the last three years.
However, leadership of the sector in Nigeria has failed to develop the country�s deepwater assets for reasons that are at best untenable. In a world where prolific oil finds have been predominantly uncovered in deepwater, it is no wonder then that Angola which three years ago could only produce half a million barrels of oil, successfully produced 1.95 million barrels per day in April, while Nigeria dropped to 1.9 million barrels per day.
The drop in Nigeria�s output followed a strike action by workers of Mobil Producing Nigeria Unlimited (MPNU). This resulted in the shut-in of 800,000 barrels per day, while the declaration of force majeure by Shell Production Development Company (SPDC) on supply of 169,000 barrels per day owing to vandalism on an oil supply line.
If anyone was skeptical about Angola�s rising profile and claim to leadership in the sector on the African continent, the recently concluded Offshore Technology Conference (OTC) in Houston, Texas, USA put paid to that with its opening session centred on Angola and not Nigeria. Perhaps, the theme of this year�s conference: Waves of Change, underscores the shift in global oil industry focus on the African continent.
The opening session of the OTC further underscored Angola�s rising profile, with the morning session tagged: Delivering mega projects in West Africa, focused on BP�s Block 18 in Angola with panelists which included: Matthew A. Forster, Engineering Manager, Abu Dhabi, BP; Tony Oldfield, SURF Project Director, Greater Plutonio, BP; John Peak, Greater Plutonio Subsurface Manager, BP Angola BU; Graeme Stewart, Director, Project Execution, BP; and Graham Stewart, Resource Development Manager, BP Angola BU. Sadly, no session at this year�s conference focused on Nigeria, probably an indication that the world may have given up on the shenanigans of the country�s leadership.
Speaking on the sidelines of the OTC conference, a member of Petroleum Technology Association of Nigeria (PETAN) decried the current state of affairs in the sector describing it as a shame.
�My brother I can tell you that Nigeria is a laughing stock in the comity of nations. Several investors I have spoken with out here are not interested in doing business in Nigeria at all. The world over, investors are clamouring to put their money into petroleum projects. However, while in other parts of the world, return on investment is easily determinable, same cannot be said of the Nigerian operating environment.
Look at Angola which started barely a few years ago, they now have three spool bases and Nigeria has none. There are investors ready, willing and waiting with their money to invest, but some racketeers and ten �per centers� continue to make their entry difficult. Imagine how long it is taking the government to sort financing for the joint ventures, isn�t it ludicrous?� the member who did not want his name in print queried.
Also reacting to the current state of development of the Nigeria oil and gas industry, Dr. Lola Amao, Chairperson, Organisation of Design Engineers of Nigeria (OGDEN) urged operators in the Nigerian oil and gas industry to rise to the occasion and do something fast. �The stigma of Oil and Gas becoming more of a curse than a blessing should be addressed.
The Niger-Delta restiveness and security issues must be effectively managed, the youths and militants educated to see reason. Likewise, Federal Government policies and legislation must favour value addition and encourage a sense of ownership and stake in the future of our nation. It is not news anymore to admit that our past leaders did not plan well, optimise our opportunities and maximise the possible returns on investment (finished products rather than crude).
� She recalled that in 2004, a Nigerian delegation visited Angola after representatives from Sonangol, the country�s state-run petroleum company had visited Nigeria (NNPC, NAPIMS, PETAN, OGDEN) to learn about local content. �The sincerity, simplicity and genuineness of the Angolan decision-makers and captains of industry was outstanding. The Angolans are tackling the issue of national transformation (from war time ruin) and local content in an extremely focused, visionary and strategic manner. Their drive to build a better nation and a world-class economy is highly commendable.
Two weeks ago, Angola became the leading producer of oil in Africa. Nigeria needs to respond in a proactive and constructive manner. We need to wake up and shape up. We all in the industry must become more serious, strategic and globally focused before we permanently lose the centre stage and our potential to become the hub of oil and gas activities in the Gulf of Guinea,� Dr. Amao enthused.
Dr. Amao is not the only one who opines that all is not well with the management of the Nigerian oil and gas industry.
However, she appears to be the only one who genuinely believes the situation can be salvaged. The consensus amongst a cross section of others who spoke with Vanguard on condition of anonymity owing to the sensitive nature of the subject, is that the situation in the industry may be irredeemable. They opined that �until government genuinely commits to address the situation in the Niger-Delta, the operating environment may remain hazardous and inimical to foreign investments in the short, medium and long-term.�
Corruption was also identified as a major problem militating against the development of the industry. �It is sad to note that almost one year after the establishment of the Oil and Gas Industry Committee (OGIC) report, nothing has been heard regarding its implementation.
Why is the implementation taking so long? I can assure you that the present structure of the sector especially the way and manner the Nigerian National Petroleum Corporation (NNPC) is constituted, only helps to breed corruption through bureaucratic bottlenecks.
It is clear to all of us in the industry that the NNPC produces nothing, adds value to nothing and only acts as a cost centre. Look at how long it took the NNPC to address funding constraints facing the joint venture, how then can any right thinking person expect growth and development under such circumstances?
The recommendations of the OGIC report is clear and well known to all and the expectations are that it shouldn�t take forever to implement the report. If we must move forward and continue to play a dominant role in hydrocarbons exploration and production in the Gulf of Guinea, government must as a matter of urgency, implement the OGIC report and consciously move away from undue interference in the sector