Several commentators have been bold enough to comment in public that the government is making a huge mistake in handing over new contracts in the oil and gas sector to untried companies.
While there is a valid argument for maintaining strong relations with the established companies operating in the country, it should be a strategic imperative of any government to give priority to indigenous companies by opening up the Nigerian oil industry to more Nigerian businesses. Oil & Gas is currently the mainstay of the nation’s economy and is also a key to unlocking the other great area of untapped wealth, Agriculture, which benefits from fertiliser production, a by-product of the refining business.
Nigeria currently produces 2.6 million bpd, but the full capacity is potentially much greater, and the current output is still way below the government’s original target of hitting 4 million bpd by 2010.
The government has for the first time in the country’s history requested an increase in its OPEC quota. However, with the majority of oil fields operating in joint ventures with overseas companies over 50 years after oil was first discovered the ability of Nigeria to control its own destiny remains limited.