Nigeria's Oil and Gas Sector: Between New Realities and Opportunities

Olusesan

Oil and Gas are Nigeria’s economic cash cows. The commodities account for about 80% of Nigeria’s external earnings and form a substantial 60-70% of her Gross Domestic Product, GDP. The huge deposit of these resources in the bosom of Nigeria’s soil and the nation near monolithic exploration of oil and gas for economic growth and sustainability, have crooned Nigeria’s economy has an oil-dependent.

Besides her size and projected population explosion of 200 million people in the next two decades; Nigeria is an irresistible global bride because of the huge deposits of oil and gas resources covered by her earth and the essentiality of oil and gas in the global economic marketplace. This essentiality and the quest to rule the world from resources accruable from oil and gas explain the various scales of crises on the global space, especially in the Middle-Eastern nations. The brewing crisis on the Bakassi Peninsular is also metaphoric of what nations can do for the black gold. 

Basically, the diversity of her people, the inconsistency of her political structure and the fluctuations of prices and currencies in the international market; with its ripple effect on Nigeria, necessitate business strategies that are virile and flexible enough to change in tandem with local and global realities.

Business and Business Development within the Nigerian Oil and Gas industry range from the core deep water upstream sector to the refining and distributing downstream sector. While government through are agencies such as the Nigerian National Petroleum Corporation, NNPC and the Petroleum Products Pricing and Regulation Agency, PPPRA, and so on monitor activities in the up and downstream respectively; oil and gas exploration from the deep water to the dispensing pumps are carried out by different levels of investment interests.

The core of the activities in the sector happens in the upstream which gulps more than 70% of the total investment of the industry. These are in the areas of exploitation, exploration, extraction servicing, lifting, refining and distributions. These various aspects require different but interrelated skills, strategies and personnel. For example, Nigeria’s Power sector relies significantly on gas generated in the process of exploration and her industrial and domestic industries are also in need of fuel and diesel for their day-to-day running. All these demands culminate into business development strategies that can effectively improve supply.

Also, though there is a dearth in the manufacturing industry, this industry is significantly dependent on the extractions of chemicals from the activities of oil and gas exploration. At another level, current realities open up vistas of business opportunities in the sector that will in turn contribute to the entire outlook of the economy by generating employment and creating wealth.

First, before the recent past, the security sector contributes marginally to the overall economic outlook of the nation. But today, it has become increasingly obvious that government alone cannot cater for her citizens let alone foreign and business interests. This lacuna has tasked the economy in terms of technological advancement and personnel development. It is still ironic how Shell Petroleum spent about $50 million on Nigerian police for private services. 

Second, the need to ensure safety of lives and property open another window for strategically looking oil servicing companies. The danger of moving petroleum products on the road poses both health and domestic threat. Therefore, there is need to look into piping the products from the various deports to the end users or provide adequate security to move the products at night. This again brings to the fore the need for adequate training of personnel. For example, the rampant road accidents caused by heavy duty vehicles have prompted Dangote Group to initiate a drivers’ scheme for graduates. That unlocked a whole new sector and the ripple effect will definitely be felt on the economy.

Third, the Facility Management sector of the industry is grossly underdeveloped. This is not because there are no personnel there, but because the chuck of the personnel are expatriates and the few citizens are those who have gone to acquire the skill outside the country. The Facility Management courses available in the country are still insufficient and not grounded; hence the need to develop business in that direction in collaboration with the higher institutions of learning.

On the whole, just like the boundlessness of the deepwaters where oil and gas are explored; the business opportunities in Nigeria’s Oil and Gas sector are limitless. Though there are arguments that the resources may soon dry up; the truth remains that; just as the late Obafemi Awolowo developed the West in the green days of Cocoa produce, the government of Nigeria can through robust policies encourage business development in the sector.

I am @sesansoulmate