By Dr Abba Muyiwa Oseni
The oil industry thrives on investor and partner confidence, which in turn translates into investment and production growth. It is that simple. No confidence leads to no investment which leads to stagnant and declining production.
As of today, the oil industry in Nigeria is on life support and will die in short order if urgent steps are not taken effective immediately to alter course.
The anchor of the industry in Nigeria is the NNPC. They act as a partner to the international oil companies as well as indigenous oil producers. They also are an operator through their wholly owned subsidiary the NPDC.
Unfortunately, NNPC has been an utter disaster over the past 4 years. The objective indices show an NNPC bereft of any meaningful leadership; a corporation drifting from day to day with no strategic imagination or vision; a corporation driven by the trader mindset of the GMD and essentially an entity with no purpose beyond being a conduit for grand theft by a tiny cabal of mostly northern elites.
This state of affairs is untenable. Mele Kyari assumed office and inherited a production baseline of 2.4 million barrels per day on average. At the same time, Abu Dhabi’s ADNOC was producing in the average range of 3 million barrels per day. Today, NNPC is struggling to do 1.5 million barrels per day and ADNOC is at 4.5 million barrels per day on track to hit 5 million barrels a day by next year.
Mele Kyari will sing and give excuses about COVID 19, but he forgets that COVID 19 hit everyone but serious oil companies are back to pre COVID production levels and exceeding those levels. Mele Kyari will sing and shout about oil theft, but he forgets that oil theft and pipeline vandalism have been part of Nigeria’s operating environment since 1999. Nigeria has produced 2.6 million barrels historically in spite of oil theft and vandalism.
The issues that confront BAT and Nigerians are stark. Our currency is declining in value solely because NNPC is not supplying enough dollar revenue from the sale of crude oil. It is that simple. Unless NNPC increases production and delivers more dollars to the treasury, we will see the naira continue to plummet against the dollar.
BAT is our President and Commander in Chief. Ultimately, the buck stops on his table. If the NNPC ship and the Nigerian state sink under his watch, it will be a matter of immortal shame to his presidency.
Dr Oseni is a public analyst and commentator
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