‘Do not be solely dependent on oil; develop other sectors to avoid oil curse’ – Nigerian businessman

Feb 25, 2024 ExxonMobil, News, Oil & Gas

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By Shervin Belgrave

Kaieteur News – Adewale “Wale” Tinubu, the Chief Executive Officer (CEO) of one of Nigeria’s largest “indigenous” oil companies, Oando PLC, said that “God took some extra time” when he was giving Guyana oil.

Tinubu made the statement at the recently concluded Guyana Energy Conference and Supply Chain Expo that was held at the Guyana Marriott Hotel, Kingston while cautioning Guyana to pay attention to all its sectors even as oil production increases.

“It’s almost as if God was a natural resource man, he took extra time to make sure that all his dreams came through when it came to giving Guyana this natural resource,” Wale Tinubu told the attendees on day two of the conference.

In 2015 American oil giant, ExxonMobil discovered some 11 billion barrels of oil in the Stabroek Block; a lucrative oil block located some 120 miles offshore Guyana. The block is a massive one that encompasses a total area of 6.6 million acres-a size that is equivalent to 1, 150 Gulf of Mexico blocks and a large portion of it is still unexplored so there might be more massive and lucrative discoveries in the future.

Not only is the find significant in terms of the billions of barrels discovered but the quality of the crude in the Stabroek Block is of high quality and its production cost is among the cheapest in the world. Oil majors describe the oil in the Stabroek Block as “Light Sweet Crude”.

Pundits along with Guyana’s President Mohamed Irfaan Ali and Vice President Bharrat Jagdeo acknowledged that the country has been short-changed by signing a lopsided oil deal for the Stabreok Block. They all agree that the contract favours the American oil company more than Guyana.

While Tinubu did not comment on Guyana’s oil deal during his presentation at the Energy Conference, he praised the country’s local content policy as one of the most robust in the world and gave his opinion of a winning oil and gas strategy.

He explained that “it includes everything but oil” while explaining that Nigeria had hydrocarbons (oil and gas) for the 60 to 70 years and while there was some benefit, the country suffered a lot because of its over reliance on the sector.

“As you would see my conclusion is not necessarily technical; it is never really about the oil industry, it’s really about everything else but the oil industry,” the Nigerian businessman said.

After explaining some of the challenges that African oil and gas companies face including the lack of financing from European and North American banks, he talked about some of the dangers a country can face when it is not prepared for the industry, pointing specifically to inflation.

“As the oil sector extracts oil, the oil sector pools in a lot of investment and the oil sector requires a lot of resources and they will pay anything to ensure that they get the resource they need and it creates an inflation within society,” Tinubu said while adding, “I will give you a very simple example, I started the industry with a 1945 tanker called Carolina, it was the only tanker that I could have chartered. It was old…but that was all I could afford and the only job I got was to take diesel fuel to the fishing trawlers and then one day somebody told me that the oil guys are shooting seismic offshore Nigeria. They were just launching the thing and the fuel I sold for 30 cents per liter I could sell it for a $1 a litre and I took the fuel over there.”

The African businessman said, “And all of a sudden I took all the fuel I was delivering. I said goodbye fishing trawlers. I am not interested in your lobster and your shrimp anymore.”

The business man explained that by chasing more money for his fuel, he partially contributed to killing the lobster and shrimp industry in his country because there was no more fuel for the fishermen. All was being consumed by the oil and gas sector.

Over years, he said, that the seafood sector declined significantly.

“Similarly the same thing happened with a lot of our other resources. We were the number one producer of cocoa in the world… number one and two in ground nuts, number two in palm and now we import palm oil into the country. We are like number six or seven in cocoa but the whole focus of our economy had become oil,” he stated.

Tinubu noted that Nigeria had earned lots of money from oil and failed to develop its other sectors.

“So it is critical that if you want to have a winning strategy in oil, you have to focus on ensuring that every other natural competitive advantage you have in Guyana is driven using your oil wealth to drive it,” Tinubu advised at the energy conference. 

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• Guyana, Guyana ExxonMobil, Nigeria, Oil and Gas, Wale Tinubu

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