In 1908, a German company known as the Nigerian Bitumen Company recorded the first oil prospecting in our nation. The prospecting activities continued until suddenly, out of a web of a complex series of events, Archduke Franz Ferdinand of Austria-Hungary in Sarajevo, Bosnia, was assassinated in 1914. On June 28, the First World War started. The belligerence ended the activities of oil prospecting in Nigeria.
In 1937, the second attempt at prospecting was struck by a company known as Shell DโArcy. Again, another round of global belligerence, the Second World War broke out in 1939. And the company ceased operations in 1940. But in 1956, Nigeria struck gold. Shell company, joined by British Petroleum, formed Shell BP Company. Crude oil in its beaucoup barrels burst out of the Oloibiri grounds in Bayelsa State for the first time. Therefrom, it became obvious that Nigeria was getting out of poverty into abundant wealth. This is our crude oil history.
The Black gold quickly became an addiction. Those who called the shots at the leadership level in Nigeria at that time in history got addicted to the proceeds of crude oil. From then till today, people who hang around the fibres of power in Nigeria have gotten addicted to crude oil and the carousel of very virulent corruption around it. The carousel of crude oil corruption in Nigeria is an endless spin. Crude oil is a behemoth dirty business engaged by vile men and vain viragos with power and connections to government. Mere men cannot pull off a corruption escapade without having a mole in the piazza of power.
This shade of crude oil. Corruption takes various forms, including policy corruption, embezzlement of oil revenues, illegal oil bunkering, and opaque contract and licensing processes. In the next few weeks, I will be expressing about the chicanery and foul business shenanigans around the business of turning crude oil into a refined precious stone of weighty worth. I will be delving into the brisk businesses of Nigeriaโs refineries, and why I believe the business should be left strictly in the hands of shrewd commonsensical businessmen and women instead of government representatives who have proven to be greed freaks and hyenas of titanic thievery.
What is the main purpose of a refinery? Petroleum refineries convert crude oil into petroleum products for use as fuels for transportation, heating, paving roads, and generating electricity and as feedstocks for making chemicals. Refining breaks crude oil down into its various components, which are then selectively reconfigured into new products. From the days of the historical hit of goldmine is Oloibiri, Nigeria has been running three massive refineries located in Port Harcourt, Warri, and Kaduna. The cost of building these refineries has been bodaciously behemoth; so also has the haemorrhaging involved in keeping them alive and profitable for the Nigerian nation. The carousel of corruption around keeping the machinery running smoothly spins haywire without bridle.
Wasteful and endless revamping of the refineries once led to a complete shutdown in 2021 with little or no fuel production. With an estimated whooping $ 25bn sunk into the dead-today, dying-tomorrow machinery, they have become like the grave that keeps asking for more dead bodies but is never satisfied. Despite the infusion of whooping sums meant to rehabilitate the refineries, they were producing at less than 30 per cent capacity. It is why Nigeria has relied on fuel imports that it subsidises, to keep pump prices low.
Africaโs richest man and president of the Dangote Group, Aliko Dangote, recently voiced his frustration regarding the wasteful rehabilitation efforts of our comatose refineries. Dangote thinks that our three refineries may have died ingloriously and buried ashamedly. The billionaire businessman pointed out that despite the $18bn ($20bn by other estimations) fruitless rehabilitation journey, โthey are still not working. And I donโt think, and I doubt very much if they will workโ. The oil magnate who has now shouldered Nigeriaโs pain with his own recently launched well-oiled and professionally managed refinery thinks that the duty of refining our crude must be placed on the shoulders of private individuals who are not crude, but shrewd in business. Dangote wants us to privatise our refineries.
Men and women who have run Nigeriaโs oil business on behalf of the government are duplicitous characters. Their heinous acts of greed and corruption are annihilatory albatrosses that have dragged down progress and development in Nigeria and keep the nation in poverty. Public officials and their cronies steal the country blind through our crude oil terrain. The World Bankโs Chief Economist for Africa, Francisco Ferreira, once said about Nigeriaโs oil business field, โOne norm that has to change is the norm of impunity.โ Described by The Economist of London as one of the worldโs โmost opaqueโ national oil companies, the NNPC once unilaterally determined how much subsidy and other items it is entitled to and simply deducts. Global audit firm, KPMG, once reported that in only two years in the season of subsidy, it over-billed the government by N28.5bn in subsidy deductions. Switzerland-based non-governmental organisation, Erklarung von Bern, alleged that $6.8bn was siphoned in crude revenues. Horrendous graft, unauthorised spending, alleged secret accounts and brazen theft have in the past been revealed by audits.
The list of crude oil atrocities against humanity runs from Abuja to the ends of the earth. Corruption in Nigeria is an existential threat that undermines development, stymies progress, stifles growth, promotes instability, and enhances human rights violations.
And Nigeria remains an island of wealth. A trough of tintinnabulating treasures. A penstock of prosperousness. A depository of abundant and abounding natural resources. The home of innumerable sages. Arsenal of intellectuals. Harbour of highbrows. Human assemblage of geeks and deft double-domes with nothing much to show for the divine bestowment. Juxtaposing Nigeriaโs wealth with the prevalent poverty stratosphere we live in is a noisome paradox and a fetid contradiction. We are stupendously prosperous but leprously poor because of widespread corruption in crevices of our daily lives.
In 2024, the United States had about 132 operating oil refineries, and 90 per cent of them were privately run and started by billionaire businessman John Rockefeller. When are we going to borrow a leaf from experiences that have yielded profitability for other nations and privatise our refineries? The privatisation of the technology of turning crude oil into precious gemstones is the most commonsensical approach to our refinery problems in Nigeria. Privatised refineries will reduce bureaucratic corruption and increase transparency in doing business. Nigerians believe that most things the government touches are torched into smithereens. The success story of the 650,000-barrel-per-day Dangote Refinery is a celebrated reference point today because itโs not run by a government entity.
Credit:Punch