Give Nigerian Oil Industry a Break


By Uchenna Kalu

Bashing the oil and gas industry, especially in Nigeria, is our favorite sport. We love to binge on negative stories about the industry. People have become celebrities based on their ability to paint the Nigerian oil and gas industry in the most sullied picture. Pick up any Nigerian newspaper any day and you’ll discover that over 95 per cent of the oil and gas stories are negative. The remaining five percent that appear positive are, perhaps, stories that were sponsored by industry operators themselves. It is ironic that the industry, as powerful and rich as it is, is the one that will scurry and hide, afraid to speak up in its own defense. The negative narrative about the oil and gas industry have been served the populace for so long that it has become so scary to challenge, even by the so-called powerful oil industry itself.

The question is, why the perennial bashing? Is the industry in anyway a force for good? Can we give the industry a break for once?
One of the key driving forces of this negative narrative about the oil and gas industry is a well known damaging human emotion: envy. Let’s face it; the oil industry has an image that is synonymous with riches and unimaginable wealth. In almost all societies, especially one with a predominant poor population, wishing the rich bad or at least blaming them for every conceivable problem is the norm. In this type of atmosphere anything you pin on the rich sticks. That exactly is the spot occupied by the Nigerian oil and gas industry. Any negative story is true; should be true; must be true. Any attempt to present a balanced and fair story is considered an attempt at cover up. Any little issue is weaved into a David versus Goliath tale. The one accusing the industry of misdeed is considered the David, even if he is not; and the oil industry is considered Goliath, even when they are not. The rule here is that the industry is rich and powerful so they must be doing something wrong. Nobody is interested in looking at the facts of any case.
A second and a more powerful component of this anti-oil industry force is the government. The thing with the government angle is that, unlike the general populace, it knows the truth. But, as everyone knows, governments the world over tell the truth sparingly; when it suits its agenda. The most powerful government agenda is reelection and government needs the people for that. In Nigeria, the government regulates the oil industry in addition to being a player through the Nigerian National Petroleum Corporation (NNPC). However, government hardly owns up to its own failures but easily finds a way to shift the blame to the perennial fall guy, the oil and gas industry.
An example is the provision of infrastructure such as roads in oil bearing communities. Whose responsibility is that? The answer is the government, the one that collects taxes from the industry. But this duty is often neglected. Operators in those locations are made to bear the brunt for failure to take responsibility.
True, sometimes mishaps do occur. Nobody likes their business operations to break down and suffer losses as a result. More than that, nobody loves the losses to extend to their neighbours’ property. But when there is any mishap such as oil spillage, this is exactly what happens. The oil industry has developed mechanisms to manage such mishap and mitigate to the greatest extent possible the impact on their neighboring communities. Beyond that, oil and gas companies pay compensations to the people affected to help cushion the impact. That is the right thing to do. But what you see at times is that some in the communities exaggerate the impact to get more in compensation. If they did not get as much as they had hoped, they go to town with all sorts of stories that fit the prevalent evil industry narrative.
The truth of the matter is that the oil and gas industry in Nigeria is a force for good. It is a well known fact that revenue from the oil and gas industry accounts for over 90 per cent of Nigeria’s earnings. Every year, the country pegs its budget estimates on expected oil revenue. This means that the capital and recurrent expenditures of the three tiers of government can hardly be funded without the revenue from the oil and gas industry. Think about this for a moment: the same people you are trying so hard to denigrate are the ones putting food on your table, so to speak. How about giving them a little credit for their effort?
The corporate social responsibility (CSR) programs undertaken by the oil and gas industry have had an overwhelming impact on the populace in education, healthcare, roads and economic empowerment. The oil and gas industry has done more than any other, as is expected of it. In some states, many schools are built, equipped and maintained by operators based in the state. Scholarship programs are provided from primary to post graduate university levels.
Hospitals have been built and equipped, indigenes of oil bearing communities have been trained in different skills and starter packages provided, cultural programs and festivals have been sponsored.  The thing about all of these is that they are entirely government duties since these companies pay taxes and royalties to government in compliance with the law.
One thing that many fail to understand is that any oil and gas company out there is in it for business and nothing more. The cost of doing the basic exploratory work runs into millions of dollars. The cost does not always ensure success. All the money could have gone down the drain literally if the exploration is not successful. Not many people are willing to stake their money in this type of business. Even when the oil or gas is found the cost of production is equally astronomical. No wonder the NNPC is always unable to meet its cash call obligation to its joint venture partnership with international oil companies.
Sometimes the terrain is equally hostile: deepwater, underground, etc. the point is that the business of oil and gas exploration and production is not easy but people have decided to take up the risk. If the risk is so enormous, should we not allow them the benefit of their fair returns when the venture proves successful? It is fair to do so.
In conclusion, the oil and gas industry is not this vast evil empire. It is an interesting line of business, though difficult. It is a force for good in the lives of Nigerians and will continue to be so in the years ahead. Branding the entire industry as the enemy for no just cause is not right. Perhaps giving a benefit of the doubt is the right way to go.

–Uchenna wrote from Lagos