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Political tension hampers investment in Nigeria’s oil, gas industry

By BusinessNews Staff on February 11, 2015

As oil and gas industry operators contend with the non-passage of the Petroleum Industry Bill (PIB), which has created uncertainty in the operating environment, the political tension associated with the 2015 general elections is also taking heavy toll on investment in the industry, THISDAY has learnt.

Oil industry sources, hinted at the weekend that both local and foreign investors are having a re-think on their investment plans for 2015 as threats by the various actors in Nigeria’s politics have created post-election uncertainty, instilling fears in the minds of operators.
Investigations revealed that investors are concerned that there may be post-election crisis that could disrupt operations in the oil and gas sector, considering the threats by both the opposition and actors sympathetic with the ruling party.

Some of the stakeholders, who spoke to THISDAY, said no serious investment decision would be finalised in the sector until after the middle of this year, when political environment might have stablised.

Speaking on the issue, the Chairman of International Energy Services Limited, Dr. DiranFawibe told THISDAY that there is uncertainty in the air, which has made some local and foreign operators to adopt a wait-and-see attitude on their investment plans.

“There is uncertainty as to what is going to happen after the elections and whether the peace of the oil and gas industry will be affected. For instance, the ex-militants are threatening trouble that if President Goodluck Jonathan does not win the election, they will disrupt the oil and gas industry. When that kind of threat is coming up, it creates uncertainty and investors will wait for the outcome of the election before taking some investment decisions,” he said.

“The other party is also issuing threats that if President Jonathan wins, it then means that the election has been rigged. This kind of thing affects the confidence of investors in the economy. Some Nigerian investors have adopted wait-and-see attitude, let alone foreign investors,” Fawibe added.

Another operator, who did not want his name in print, also told THISDAY that be post-election crisis, will not be completely ruled out, no matter the outcome of the elections.

“There will be crisis, no matter who wins but the crisis will be targeted at the oil and gas industry if President Jonathan loses the elections. Somebody has said that they will take back their oil if Jonathan loses and you know what that means. The opposition, we learnt, have threatened to form a parallel government if Jonathan is declared the winner. So, there is tension in the land and the operators are watching,” he said.
Before the presidential election was postponed to March 28, the ex-militants of the Niger Delta militants had threatened to take up arms again if Jonathan failed to win in the presidential election initially scheduled for February 14..

The former militants, who spoke when they met with the Bayelsa State Governor Seriake Dickson, said Jonathan’s re-election was not negotiable.

A leader of the ex-militants, popularly known as Boyloaf also used the opportunity of the meeting to flay the attack on the President in some northern states, saying nobody or group of persons had the monopoly of violence.

Boyloaf, who contended that there was nothing like one Nigeria, said the only thing binding Nigeria’s unity was the oil.

He was of the belief that Jonathan would win the election, adding however, that if the North out of desperation for power took power from their kinsman, the people of the Niger Delta would take their oil back.

[ThisDay]

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