Nigerian promise and the Petroleum Industry Bill
The Nigerian Petroleum Industry Bill holds a great deal of promise for Nigeria and international oil companies; for renewed investment, new drilling concessions and improved commercial relationships. There is further promise for a more sustainable model of development in the Gulf of Guinea. Nigeria is very important to what happens in west Africa as a whole and is still the most significant player on the continent of Africa; @shereehanna tells us why in the African Business Review
After more than 50 years of production, Nigeria – the tenth largest oil producer in the world – still has proven reserves of 37bn barrels, three times that of its nearest rival Angola. Its natural gas reserves are estimated to be in the region of 190tn cubic feet. The country produces up to 2.5m barrels per day of the sweet, light crude that fetches the highest prices on the world market.
Nigeria’s national and international oil companies (IOCs) are waiting patiently for the Petroleum Industry Bill before they can risk new investments there. Nigeria has a poor reputation for translating oil taxes into infrastucture and social development projects and growth in output has stagnated while the Federal Government and state administrations debate the Petroleum Industry Bill (PIB), drafted by the Petroleum Minister Diezani Alison-Madueke.
Onlookers ask can oil companies and their commercial investments fix all the problems we see in Nigeria, probably not we say. Maritime crime has fallen dramatically in 2012 and 2013 of the coast of Somalia and investment opportunities have become more obvious in Mozambique, Tanzania and Somalia, but those developments have some way to go to catch up with Nigeria’s growth since the 1970’s but? In 2013 parts of the Gulf of Guinea were designated a High Risk Area by insurance companies in London, replacing the Gulf of Aden as the most dangerous place for mariners off the coasts of Africa. There are many reasons for these increased incidences of violent crime but most of them are funded by illegal bunkering and illegal oil profits in the Niger Delta: drugs, people and weapons trafficking in West_Africa_TOCTA_2013_EN .
What we should never forget is that Nigerians have a massive wealth of know-how and not just for technical and operational problems in their own but other African countries’ extractive industries too. Nigerians know that their problems are specifically African and in a wealthy oil based economy like Nigeria they are complicated. Its fairly obvious that some of the oil related security problems in Nigeria lie in regional politics where career politicians are still tempted to use illegal bunkering as a lever rather than a focus for change or sustainable investment. We occasionally see the convenient transfer of blame to international oil companies like SHELL Petroleum Development company for the serious oil pollution in the rivers of the Niger Delta. The Nigerian Navy is often attacked for not doing enough to stop illegal movements of crude oil along the coast of the Gulf of Guinea but it would be helpful to investors as the PIB comes closer to being enacted to encourage better commentary and discussion about Nigeria’s regional and national politics and not to focus so often on simplified security, technical or legal solutions to more complex problems.