Fresh insights as to why the oil majors are gradually scaling down their operations and planning their exit from the country has been unraveled.
Investigation by The Nation revealed that among the oil majors, including Royal Dutch Shell, ExxonMobil, Total and Eni, are cutting billions in spending after taking hits to their profits, thus shifting money to renewable fuels and focusing only on the most cost-effective markets.
Checks by The Nation further revealed that the country was able to attract only $3 billion, or 4%, out of the $70 billion committed on new projects in Africa between 2015 and 2019, a development experts say, does not bode well for economy which relies on oil receipts to survive.
Nigeria’s loss has been the gains of other African countries such as Angola, Sao Tome and Principe, where some of the IOCs have made major investments in recent years.
In Sao Tome & Principe for instance, is now being heavily courted by oil companies from far and near. Notably, a consortium of US firms, including Chevron Texaco and ExxonMobil where among the first to secure oil license along with a Norwegian company, EER, which netted over $70million with many other prospects.
Confirming this development, Delta State Commissioner for Environment, Hon. Onogba Christian, while fielding question from our correspondent on the sidelines of the “Stakeholders Forum on The Environment” facilitated by the Institute of Directors Nigeria (IoD) Port Harcourt chapter, said oil majors like Shell, Chevron and others may have been compelled by the present socioeconomic realities that has made the current operating environment bad for their business to plan their exit from the country.
Specifically, he said: “The first ominous signs that presented itself was the deliberate efforts by the international oil companies (IOCs) to relocate their headquarters outside the Niger Delta region. When that happened few years back, it was a bad signal.
“Of course, you cannot lay all the blame on the IOCs entirely because no businessman wants to invest in an area where insecurity is a big issue. The problem really has to do with the issue third party interference, poor legislation among other factors which are genuine reasons to affect investment decisions, he stressed.
To address this issue, the government, he maintained, must ensure that there is an enabling environment for business to thrive. “I’m convinced that once there is a level of assurance that their investments can be guaranteed many of these oil managers that have exited the country will come back,” Christain assured.