Nigeria's local content capacity is regularly overlooked. Our home-grown companies are cast in the shadow of the multinational oil majors like Royal Dutch Shell Plc, Exxon Mobil Corp., Chevron Corp., Total SA and Eni SpA, which currently produce about 90 percent of our crude. But change is afoot and the current administration is beginning to recognise the ability of domestic talent to keep pace with the big boys.
In fact, the current administration is taking a long, hard look at the way our domestic oil and gas sector operates in its entirety. I have written before about the need for a complete redesign in the outdated legal, regulatory and institutional structures that hold sway over our oil and gas sector. The government is at least now recognising that the inefficiencies that permeate throughout the way businesses in the oil industry operate cannot be allowed to continue.
Speaking yesterday in Abuja, a leading figure in the NNPC (Nigerian National Petroleum Corporation), recognised that ‘a government/ business enterprise such as the NNPC, and by wider application, the oil and gas industry as a whole, will benefit from a constructive legislative-executive interplay that stimulates government agencies to thrive and support our national aspirations.' It is not only the acknowledgement that is encouraging, but the language in which it has been delivered: ambition.
And that ambition is not just pie in the sky. Nigeria's place on the world stage, as well as domestically, is truly is beginning to flourish. I have long believed that it is not for lack of expertise that indigenous oil and gas players are not given a fair shot, but rather a governance infrastructure that is not geared to their strengths. Other authors have noted, and I agree with most, that if we can recognise the role that domestic players can fill, whilst encouraging their success through refreshed business infrastructure (such as that proposed by the much-delayed Petroleum Industry Governance Bill/PIB), then those ambitions may well be fulfilled in short order.
One need only look to the ambitions of those local companies themselves to see what is possible. I read in the news this week about, Nigerian independent exploration firm, Oranto Petroleum's announcement that it is to invest $500 million USD to develop Block B3 in South Sudan. Oranto has agreed an exploration and production sharing agreement with South Sudan's Ministry of Petroleum and is launching an immediate exploration campaign.
It's a brave move from Oranto, as South Sudan is hardly the most peaceful nation in Africa. But Nigerians know the disruptive effects of militancy and know the crippling impact it can have on economic development. Whilst investment fled in times of strife in Nigeria, Nigerians know that it is precisely now that conflict-ridden areas need that investment the most. Oranto is playing the long game and Nigeria and South Sudan alike will feel the benefit.
Seeing Africa's youngest country forge bonds with Africa's most ambitious country is no bad thing. And it offers a glimpse into the future for the potential of domestic businesses. Seeing Oranto flex its muscles overseas might just give other indigenous Nigerian firms some good ideas about their prospects on the continent . . . provided the government doesn't bottle it on the PIB.