Key points
- Stakeholders urge Nigeria to move from crude and resource exports to value-added oil, gas and petrochemical products.
- Indorama says its $3 billion expansion has made it Africa’s largest petrochemical and fertiliser company.
- Experts say building industrial capabilities around Nigeria’s oil and gas resources is essential for sustainable economic growth.
Main story
Stakeholders in Nigeria’s oil and gas industry have called for greater value addition to the country’s petroleum resources to promote sustainable growth in the sector and strengthen the wider economy.
The stakeholders made the call on Wednesday at the Seventh International Mid/Downstream Oil and Gas Conference in Port Harcourt, organised by the Centre for Gas, Refining and Petrochemical Engineering (CGRP), University of Port Harcourt, in partnership with the Nigerian Society of Chemical Engineers.
Speaking at the conference, the Managing Director of Indorama Eleme Petrochemicals Ltd., Mr Manish Mundra, said the event provided an opportunity to generate ideas capable of driving positive changes across the oil and gas industry.
Mundra, represented by the Head of Fertiliser Manufacturing, Indorama Eleme Fertilizer Chemicals Ltd., Mr Upendra Singh, said effective reforms in the sector would contribute to Nigeria’s economic development by encouraging the conversion of hydrocarbons into higher-value industrial products.
He said Indorama had pursued policy reforms through innovative expansion strategies, including a $3 billion expansion programme that had positioned the company as the largest petrochemical and fertiliser company in Africa.
Mundra added that the company’s polymer production was supporting Nigerian micro, small and medium enterprises involved in manufacturing.
Also speaking, the Managing Director of the Nigeria LNG Ltd. (NLNG), Mr Adeleye Falade, said Nigeria needed to build value-addition ecosystems and capabilities around its oil and gas resources to achieve sustainable economic development.
Falade, represented by the Manager, Future Opportunities, NLNG, Mr Oluwafemi Lawal, identified export-led growth, investment in people and cultural transformation as important components of Nigeria’s petro-economic development.
He said possession of oil and gas resources alone could not guarantee economic prosperity without the industrial capabilities required to transform those resources into valuable products and businesses.
Earlier, the Chairman of the Governing Board of CGRP, Mr Anthony Ogbuigwe, expressed concern that Nigeria’s large petrochemical resource base had not translated into the level of industrial development that could be expected.
Ogbuigwe called for a transition from a crude-exporting economy to one focused on processing and value addition, saying local refining and manufacturing could create jobs and support long-term economic sustainability.
He also called for stronger collaboration between the energy and manufacturing sectors to maximise the country’s natural resources.
The conference was held under the theme, “Repositioning Nigeria’s Petrochemicals Sector for Industrial Growth, Innovations and Sustainable Development.”
The issues
Nigeria’s oil and gas sector has historically generated significant export earnings, but stakeholders at the conference argued that greater economic value could be created by processing hydrocarbons locally and developing industries around them.
The concern extends beyond crude oil. The stakeholders emphasised the need to develop petrochemical, fertiliser and other downstream industries capable of turning natural resources into higher-value products, supporting manufacturing and creating jobs.
The speakers also highlighted the importance of building the skills, infrastructure, technology and industrial capabilities required to sustain these activities. Without such capabilities, the availability of oil and gas resources may not translate into broad-based economic development.
For companies such as Indorama, investment in downstream and petrochemical capacity demonstrates how domestic processing can create linkages with other parts of the economy, including manufacturing MSMEs.
The call therefore centres on moving beyond the extraction and export of raw resources towards an industrial system in which Nigeria processes more of its hydrocarbons, develops local expertise and supplies higher-value products to domestic and international markets.
What’s being said
“Repositioning the sector means promoting hydrocarbon numbers into diversified high value industrial products.” — Manish Mundra, Managing Director, Indorama Eleme Petrochemicals Ltd.
“Possession of oil and gas resources alone may largely not translate into economic development and prosperity, we must add value.” — Adeleye Falade, Managing Director, NLNG
“Resources become an advantage only when capability is built around them. The real multiplier is not the gas molecule, it is the economy built around it.” — Adeleye Falade, Managing Director, NLNG
“We need to think of how we can build capabilities around our resources and export them. The future we seek is not buried beneath our feet, it is what we choose to build above them.” — Adeleye Falade, Managing Director, NLNG
“We must move from a crude exporting economy to a value addition economy. Every barrel of crude oil refined locally should create opportunities for jobs and economic sustainability.” — Anthony Ogbuigwe, Chairman, Governing Board, CGRP
What’s next
The stakeholders are expected to continue discussions around policies and investments that can deepen local processing, petrochemical production and manufacturing linkages in Nigeria’s oil and gas industry.
Greater collaboration between energy companies, manufacturers, government institutions and technical experts will also be important in developing the infrastructure, skills and technologies required to expand value addition.
Bottom line
Nigeria’s oil and gas resources can generate greater economic benefits when they are processed into higher-value products and linked to domestic manufacturing. Stakeholders at the conference are calling for the country to focus not only on what it extracts, but on the industries and capabilities it can build around those resources.
