Eshiobo Shola (Immediate past president, Institute of Chartered Economists of Nigeria)
I think the northern governors and the Presidency are motivated to resume oil exploration in the North because of what the militants are doing in the South-South. But, honestly, the country does not have enough money to pursue that venture. We have done this before, but the exercise proved extremely expensive.
If they actually want to do something in that region, they should have continued with the oil wells they dug before rather than prospecting for new ones.
Meanwhile, the current state of the economy does not even support that. We need to encourage agriculture. Food is very expensive now; the country spends several billions of naira on food importation on a monthly basis.
Every country that has a buoyant economy has a very strong agriculture. More resources should be channelled to agriculture rather than oil exploration.
If we are self-sufficient in food, we would survive any economic hardship.
But no matter how much oil we export, we would continue to be poor if we rely on imported food to feed the country.
Dr. Dauda Garba (Nigeria Programme Coordinator, Natural Resource Governance Institute)
Is it wise to use the scarce resources we have for oil exploration in the North at this challenging time?
This is the major question. But I think we need to be forward-looking in terms of prospecting for more reserves for future use.
The challenge every country that is into oil business faces is how to ingeniously get companies to do the exploration.
One of the ways to do this is by creating the necessary incentives that would attract companies to invest in exploration.
If you go into Nigerian history, you would find out that it was through the incentives the late military Head of State, Sani Abacha, created in the 1990s that we discovered much of the oil produced in the country today.
It is on this basis that I would argue that we should use the necessary incentives to add to the national oil reserves.
But I would not advise the government to limit the exploration to the North. It should include the Niger Delta and other parts of the country. The reserves would be useful to the country when oil prices rise in the future.
I don’t think we should use the little money we have for exploration.
We should use incentives to encourage companies to do it. When we create reserves, we would be making up for the losses of today.
Afe Mayowa (A former President, Nigerian Association of Petroleum Explorationists)
The exploration is a commendable effort. It took 50 years to explore and find oil in the Niger Delta. There was no prospect of oil in the region the first time Shell came. So, it had to leave.
But with improved technology, oil was found. In fact, for a long time there was no prospect of oil in the fields where we currently produce.
With improved technology and knowledge, we can find oil in the North. And this is the right time to prospect for oil in different parts of the country. The prospect would be brighter when we are producing in Lagos, Maiduguri and the Niger Delta.
I believe that would also reduce the agitation by oil-producing communities. So, I don’t see anything wrong with what the government is doing in the Chad Basin.
Abimbola Olanrewaju (Tower Securities and Investment Company Limited)
First, the Federal Government may have information many of us are not privy to. In that regard, one may not dismiss the effort as a waste. If the government thinks the investment would be beneficial to the country in the future, then the effort is justified.
But considering what we have seen so far, the search for oil in the North is more of an emotional thing than an economic decision. The North wants to be seen to be supportive of the national economy. The exploration does not put into consideration economic factors. For an economic project to be justifiable, its benefits should surpass the cost.
The President seems to be too emotional about the exercise. When you see such actions, you should know that economic factors are not given a priority. Politicians, unlike economists, do not analyse projects on the basis of economic factors.
I am sure that a lot of money is being put into the project. If they put a lot of money in exploration at the expense of agriculture and other critical sectors, there would be a problem. The government should know that our problem has never been about whether the resources are sufficient or not. The problem has been about the poor management of those resources.
Johnson Chukwu (CEO, Cowry Asset Management Limited)
I don’t think the government should commit much resource to oil exploration in the North. Even if you would find oil in the North, you may not find a commercially-viable quantity. Most likely, they would have marginal fields. You may only find oil that would create some political balancing in the oil and gas sector. And the cost of production would be exorbitant.
I think the government is motivated by the discovery of oil in Niger Republic, which shares the same seismic location with the North. If you find oil in the North, it would only create some balancing. So, it is not something that the government should devote many resources to.
There is nothing wrong with seismic investigation. There are countries that never thought they had oil some decades ago. The likes of Ghana, Kenya and Cameroon never thought they could find oil in their territories. But now, they are oil-producing countries. This could have motivated the North. But the government should know that it may not find a commercially-viable quantity.
Zaka Bala (Energy expert)
In a centralised system of government, the natural resources that are located in the country’s territory belong to the entire country. So, it is the duty of the government to ascertain all the natural resources that are in the country. But if an exploration is done for a sectional or political reason, there is a problem. And that would not be good for the country.
Mineral resources should be seen as national assets. If they are national assets, exploration should be done in the interest of the entire nation. But if it is done because of a sectional interest and to make a political statement or counter the political output of one part of the country, the exploration would be injurious to the country.
In the case of Nigeria, our crude should be considered as a national asset; its management should be approached from this perspective. If we want to fight a criminal group, we should fight it on the basis that it is a threat to the nation and not because it is located in eastern, western or northern part of the country. A similar mindset should be imbibed when dealing with oil and gas issues.
Any host community of a national asset should only be considered in terms of corporate social responsibility and the principle of derivation. Apart from that, crude anywhere in Nigeria should be considered as a national asset.
Another point we should look at is that Nigeria has seven basins. All the basins belong to Nigeria and all the resources found in any of the basins belong to Nigeria. Today, we only explore the Niger Delta Basin.
If there is an effort to explore any of the basins, it should be done in the nation’s interest. Any attempt to sectionalise or politicise the exploration would be injurious to Nigeria’s future. If the exploration in the North is aimed at advancing a sectional interest, there is problem about it. Click to signup for FREE news updates, latest information and hottest gists everyday
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