Of NNPC road shows and reluctant investors

Paul Arkwright, the British High Commissioner, called on the NNPC to organize a road show in London to create awareness on the possible investment opportunities available in the Nigerian oil and gas sector.

Arkwright made this call when Ndu Ughamadu, the group general manager, group public affairs of the NNPC, paid a courtesy visit to the Chancery of British High Commission in Abuja last week.

Recall that last year, the NNPC organised at least two investments road shows in India and China where memorandum of understandings (MoUs) were signed and significant investments proposed.

The China road show featured the signing of MoU’s worth $80 billion according to the NNPC. The national oil company further stated that the incoming investments signed with Chinese companies will primarily be in Nigeria’s oil and gas infrastructure, pipelines, refineries, power facility refurbishments and upstream sectors.

Ibe Kachikwu who led a delegation of top management staff of the NNPC and select stakeholders from the private sector to showcase the investment opportunities in Nigeria’s oil sector, met with over 200 Chinese investors and tried to commit them to funding and other partnerships that would improve the fortunes of the oil sector in Nigeria.

While the Indian occasion did not carry the toga of a road show, the objective was the same. The Federal Government said it agreed on a cash-raising oil deal with India for $15 billion by the end of the year. The deal would see the Indian government make an upfront payment to Nigeria for crude purchases.

However the full benefits from these agreements are yet to be realised. While there are whispers of activity, only marginal gains have been recorded. Last year, Indian oil companies got significant representation in the 2017 Nigeria crude term allocations.

In May this year, Nigeria awarded the Ajaokuta-Kaduna-Kano (AKK) natural gas pipeline project to a consortium of Chinese firms led by the Chinese Petroleum Engineering at the cost of $949 million representing 80 percent of cost of construction.

NNPC said the objective of the pipeline was to address the current operational challenges experienced in the power sector limiting the ability of gas generation companies (Gencos) from increasing their output to due to difficulty transporting gas from the Niger Delta to power plants around the country.

The overtures from Britain will not amount to much unless critical reforms are undertaken in the oil and gas sector. Nigeria has passed a PIB governance bill which basically is for administrative purposes (though experts pick holes in it), the country is yet to pass a fiscal bill which is the stimulus for much needed investments.

After being marooned for over a decade, the PIB is yet to be given the urgency it demands. Yet the oil sector is begging for urgent reforms. The Natural Resource Governance Institute, (NRGI), a transparency watchdog, last month, published its 2017 Resource Governance Index – a measure of transparent management of the extractive sector – and ranked Nigeria 55th out of 89 countries who manage their resources well. For discerning government officials, this would be a national emergency.

ISAAC ANYAOGU