OPINION: So far, so good. Efforts to re-allocate 57 of Nigeria's marginal oilfields to indigenous players are under way, with foreign and local companies teaming up in the race for the finishing line this autumn.
The gas flare-down initiative looks set to generate annual revenue of $1 billion and feed 2.5 gigawatts of gas-fuelled power into the grid, with help from third parties able to monetise gas in remote locations.
Across the Niger Delta, local players developing Shell-divested acreage say they will step up efforts as soon the Covid-19 pandemic recedes.
Seplat has reduced costs ahead of a major gas drive, Aiteo is restructuring and the Neconde Consortium says industry is champing at the bit, waiting for enactment of reform laws to revive upstream fortunes.
Yet there is reason for unease since Nigeria's 2020 budget halved its crude benchmark to $30 per barrel.
Even before Covid 19, local independents were accounting for 90% of the $8 billion debt owed by oil and gas producers, mostly to local banks.
Looming recession is an issue and graft makes meeting this challenge even harder.
With the Niger Delta Development Commission accused of allowing $215 million to go missing this year alone, auditors are following a billion-dollar paper trail going back two decades, leaving producing regions feeling shortchanged and rekindling militant anger.
Elected on an anti-graft ticket, President Muhammadu Buhari has made a difference, but is touchy when accused of not doing enough. His office dismissed Transparency International’s decision to lower Nigeria's ranking on its corruption index as "opposition propaganda".
Buhari breathed a sigh of relief last weekend when a UK court granted an extension on a high-profile case in which Nigeria is seeking to set aside a $9.6 billion arbitral award in favour of Irish engineering firm Process & Industrial Developments (P&ID).
This week saw Buhari’s flagship Ajeokuta Gas Pipeline project embroiled in a similar swirl of accusations, the outcome of which is unclear.
Infamy and mistrust may prove key hurdles to recovery if Nigeria allows itself to remain a hostage to its own reputation.
(This is an Upstream opinion article.)
