Nigeria’s oil sector on verge of collapse, expert warns

Pioneer managing director of Seplat Petroleum Development Company Plc and Chairman of AA Holdings, Augustine Avuru, has warned that the Nigerian oil and gas sector is on the verge of collapse, as local oil firms lack the expertise to fill the vacuum created by departing international oil companies.

Avuru, who delivered the Founder’s Day lecture at the Federal University of Petroleum Resources (FUPRE), Effurun, Delta State, said most of the foreign oil companies, like Shell, Mobil, Chevron, Eni, are divesting and selling off their assets after over 60 years of operations and leaving a huge gap in the sector, which the emerging local oil firms do not have the capacity to fill.

He said departing international oil companies (IOCs) invested massively in the areas of Research and Development (R&D) and comprehensive training school with established training modules over time.

Avuru said the training modules were sequenced in a way that a typical employee career cycle in the companies had a series of modules that preceded career advancement into a role of responsibility and that the training modules from basic, introductory modules for young intakes to advanced, specialised modules for more experienced staff. He said the new local oil firms do not have this training feature, which would take a toll on the sector soon.

He lamented that institutions, like the Petroleum Training Institute (PTI), Effurun, Delta State, which was established in 1973 by the Federal Government in fulfilment of OPEC directive to member countries to train indigenous middle-level manpower to meet the labour force demand of the oil and gas industry in Nigeria and West Africa sub-region, was promoted to a federal polytechnic, subverting the purpose of its establishment.

He said specialised institutions like the Federal University of Petroleum Resources (FUPRE) would have filled the gap but the institution has been underfunded and lack requisite assets to yield the kind of impacts delivered by training modules of the departing multinational oil companies.

“Over four decades ago, NNPC established a Research and Development (R & D) division in Port Harcourt. It was well resourced with a lot of highly educated professionals hired from across the world to man a well-equipped research laboratory. It held so much promise to serve as the industry research centre. It turned out to be a dream betrayed. It simply fizzled out. The IOCs were unaffected because, back in their home offices, they established their own research centres, in collaboration with many top universities that they funded.

“Thus, their operations in Nigeria were supported by their home office research and development projects and findings. In time, their exit from Nigeria would rob our industry of their R & D,” he said.

In the lecture titled: “Expanding the frontier of petroleum education through stakeholders’ participation,” Avuru said the Nigerian Petroleum Industry was witnessing a huge transition with most of the international oil companies “rationalising their footprints in the traditional onshore and shallow water terrains where they have operated for upwards of sixty years.”

He said there was a huge vacuum in petroleum education in Nigeria and that FUPRE must step up and fill the vacuum. He added that this would require a bold and practical transformation of the institution from what is today, in the interest of the nation and the petroleum industry. (Courtesy The Guardian)