There is palpable fear that Nigeria will continue to lose market share in the global oil and gas industry over its failure to anticipate and pro-actively respond to the possible impacts of developments in the sector in other countries.
Countries such as Ghana and Kenya with new oil discoveries, Angola with its growing petro-dollar infrastructure, Tanzania and Mozambique forging new alliances with the big investors from Europe and America, have experts here in Nigeria worried about the in-ward investment prospect for the sector in the medium to long term.
There are already projections in some quarters that demand for Nigeria’s oil and gas and its market share will shrink drastically as attention shifts elsewhere and towards the emerging Africa oil countries.
Already, the United States of America, a major importer of Nigeria’s crude oil, is turning to Canada for the supply of crude oil through a pipeline already in place.
They are also anxious that the Federal Government doesn’t seem to have taken any feasible measures that suggest there are some safety valves in place against falling oil prices.
They are however of the opinion that in the event that the price of crude slumps to $75 per barrel, it should be an opportunity for government to deregulate the sector.
As regards gas, they expressed apprehension that a sustained Europe economic crisis could negatively affect the Nigeria Liquefied Natural Gas Limited market while the proposed Brass LNG may not take off because there may not be a market for it.
Paul Michael Wihbey who is also the President of GWEST LLC, Washington DC, in a recent presentation titled: ‘Strategic Developments in the Middle East and Implications for the Nigerian Oil Industry’ highlighted the huge opportunity costs and market share for Nigerian crude oil and gas.
He said Nigeria for instance, has declined from being the third largest exporter of crude oil to the US, to being the sixth, as of February this year, with volumes falling from over one million in the late 1990s to just 350,000 barrels in February.
Seye Fadahunsi, a director of Pillar Oil, said the fact that other countries were also discovering oil, means that Nigeria has to do more to retain its market share and also create an enabling environment for investors to come and participate in the oil and gas industry without any encumbrances to their businesses.
Also commenting on the situation, the former group managing director of the Nigerian National Petroleum Corporation (NNPC), Chamber Oyibo, said “government takes too long a time before it takes decisions on good projects that it conceives, and before we know it, others would come up with similar ideas and implement them, taking over from us.”
He added that Nigeria may lose the market, especially the gas market, to countries in East Africa because of their proximity to Asian countries such as Korea , Japan and China, urging the government to expedite action on Trains 7 of the NLNG, Brass LNG and Olokola LNG, so that it would not lose the market completely.
Oladiran Fawibe, chief executive officer of International Energy Services (IES) also told Business Day that :“If we are strategic in our thinking and approach to issues, Nigeria should identify the countries where explorations are taking place, and their likely effects on our country’s oil and gas industry”.
He advised that Nigeria should assess the implications, adding that the country knows the effect of oil discovery in Ghana, not in terms of output, but the diversion of investments that have gone to Ghana. The market he said, was now more competitive and Nigeria must move fast.
Osten Olorunsola, director of the Department of Petroleum Resources, recently expressed concern that for the first time in Nigeria’s history, there was an actual decline in reserve estimates between 2011 and 2012, wondering what would happen between 2014 and 2017 in terms of oil and gas production, since no major investments have been recorded in exploration in the last five years
Source:BusinessDay
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