Why Tinubu will outperform Buhari in the oil industry – African Energy Chamber

Lagos Mag
Lagos Mag  - Content Writer
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According to the African Energy Chamber, President-elect Bola Ahmed Tinubu of Nigeria may choose a different oil strategy than President Buhari did. This was disclosed by the AEC in a report released on May 9.

Nigeria should reasonably anticipate some legislative changes that will impact the oil business in 2023, according to AEC. The commissioning of the Dangote Refinery, which is anticipated to lessen Nigeria’s dependency on foreign fuels and possibly encourage the growth of other sectors, is one of the reasons listed, the group added. The group suggested that Tinubu’s oil policy will differ from Buhari’s in important ways.

The reasons the AEC gave for this assumption include: 

Dangote refinery  

Tinubu’s inauguration will occur a week after the commissioning of the Dangote Refinery, the 650,000-barrel per day (bpd) oil-processing plant. The plant is expected to reduce reliance on imported fuels.

Recall that Nairametrics has also reported that the refinery’s production of critical products like naphtha and polypropylene will stimulate the development of other industries, such as cosmetics, plastics, and textiles. 

A shift in upstream operations 

According to the AEC, conditions are shifting in the upstream sector and Nigeria appears to be making some headway in reducing crude oil production losses due to theft, sabotage, and pipeline vandalism.

The group says Nigeria is on track to bring output levels back up to the 2021 level of 1.3 million barrels per day (bpd) in 2023, an increase from 1.18 million bpd in 2022.

So, Tinubu’s administration will have some relief from falling oil production rates, as long as the status quo keeps improving. A part of the report stated: 

  • “In short, Nigeria appears to be headed towards lower fuel imports and higher oil production this year.” 

What you should know

The African Energy Chamber also highlights the fact that the outbreak of war between Russia and Ukraine in February 2022 presented an opportunity for Nigeria – as with other major producer nations – to reap the benefits of high oil prices, but the country’s oil production continued to be hampered by crude oil theft and pipeline damage.  

  • However, in an effort to curb crude oil theft and vandalism, the federal government announced a new approach in collaboration with host communities to protect critical pipeline systems, with a pipeline surveillance contract awarded to protect oil assets. 
  • It is important to note that in December 2022, Bala Wunti, the Chief Upstream Investment Officer at the NNPC Upstream Investment Management Services (NUIMS) said that in the fight against crude oil theft, the government makes use of a new security architecture that is anchored on rectangular architecture, reliant on a command-and-control center technology that brings together the security and intelligence agencies, the regulators, and the community.

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