It took several years to arrive at the unbundling of Nigeria’s petroleum and allied oil industry. The requisite legislation is in place and there has been perceptible movements, but policy dissonance and uncertainties continue to stymie forward planning. Nigeria’ prevailing forex imbroglio has further compounded prevalent challenges.
Nigeria’s four major oil refineries are still mothballed. So all operational hopes, energy and aspirations are foisted on the Dangote Refinery, and whatever residual output international oil companies (IOCs) can muster. But there is a Catch-22. In the policy realm, the FGN has been reticent and not exactly proactive in emphasizing protection of foreign investors’ interests. This was a point no other candidate except Peter Obi canvassed during the 2023 presidential campaign; Obi always stressed commitment “to enforce the legal framework protecting foreign investors and their indigenous partners” with a view to “tamper monopoly and capital flight.”
Presently, with the $20bn Dangote refinery not fully operational, the IOCs are surreptitiously leaving Nigeria’s oil industry. They are cutting their losses and heading home, perhaps, uncertain as to how they will fare when Dangote’s refinery is fully up and running. Most fear the FGN will default to “traditional protectionism,” given its almost 30% investment, and its hedging on the indigenously-owned refinery as its option of last resort. This development ought to trouble Nigerian policymakers.
The names of some exiting and divesting companies are already in the public domain. Yet, many more are on the drawing board or are deliberately being kept under wraps. Beyond, Exxon Mobil, Addax of China, and Eni of Norway, there are certainly more OIC on their way out from Nigeria.
Whereas this development may yet prove beneficial to Nigeria in the long term, given good prospects of ending import of refined petroluem that is presently fraught with subsidy controversy and criminality; Nigeria may well become a net exporter of refined petroluem. But there are too many ifs, all hinged on policies that are equally fraught with dissonance. How the exiting companies will settle or resolve their obligations to mitigate and clean up blighted environments in areas where they had operations, remains another sticky issue. Full disclosure will be imperative. While it will be precipitate to suggest that the exiting companies are trying to avoid their real and vicarious liabilities; the sector deserves continued introspective monitoring.
Mr. Obaze is the former Secretary to the State Government of Anambra State, Nigeria from 2012 to 2015 - MD & CEO, Oseloka H. Obaze. Mr. Obaze also served as a former United Nations official, from 1991-2012, and as a former member of the Nigerian Diplomatic Service, from 1982-1991.
Selonnes Consult Ltd. is a Strategic Policy, Good Governance and Management Consulting Firm, founded by Mr. Oseloka H. Obaze who served as Secretary to Anambra State Government from 2012-2015; a United Nations official from 1991-2012 and a Nigerian Foreign Service Officer from 1982-1991.