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Nigerian Senate Urges International Oil Companies To Invest In Petrochemicals

Published

11 months ago

Feb 9, 2024.

Eko Hot Blog reports that the Nigerian Senate has voiced criticism against international oil companies (IOCs) for neglecting investments in the petrochemical industry.

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Natasha Akpoti-Uduaghan, Chairman of the Senate Committee on Local Content, announced that the committee would be summoning IOCs to discuss the necessity of their involvement in the petrochemical sector.

Petrochemicals encompass a wide array of products derived from petroleum, including plastics, fabrics, fertilizers, paints, and medicines.

The global petrochemicals market, valued at $619 billion in 2023, is projected to experience a compound annual growth rate of 7.3 percent from 2024 to 2030, according to a report by Grand View Research.

During a meeting with the Nigerian Content Development and Monitoring Board (NCDMB) in Abuja, Akpoti-Uduaghan expressed her dissatisfaction with the apparent lack of investment by IOCs in the petrochemical sub-sector and associated manufacturing activities.

She highlighted the contrast with IOCs in other oil-producing nations, where such investments contribute significantly to their economies.

In a statement released on Friday by the NCDMB, Akpoti-Uduaghan was quoted saying, “The committee chair criticised the international oil companies in Nigeria for not investing in the petrochemical sub-sector and other associated manufacturing activities, whereas IOCs in other oil-producing jurisdictions make such investments and contribute significantly to those economies.”

She further announced the committee’s intention to invite IOCs and relevant government agencies to compel companies to create tangible value in the Nigerian economy beyond the extraction and sale of crude oil.

“We need to get them round the table and tell them what we want as a country as against watching them export crude oil only,” she emphasized.

Akpoti-Uduaghan assured that the committee would collaborate with the board and other entities under its supervision for the effective implementation of the board’s mandate to benefit Nigerians.

She expressed concern about the state of the economy, particularly the rising unemployment levels contributing to increased criminality.

The senator underscored the urgency to deepen the implementation of the Nigerian Oil and Gas Industry Content Development Act to generate employment opportunities and catalyze other sectors of the economy.

She requested the board to submit performance reports on various aspects of the Act, seeking recommendations for amendments from the National Assembly.

Felix Ogbe, the Executive Secretary of NCDMB, responded by explaining that many oil conglomerates have downstream subsidiaries that invest in petrochemicals and linkage sub-sectors.

He acknowledged that most operating companies in Nigeria lack such subsidiaries but highlighted the board’s willingness to support indigenous firms interested in such ventures.

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Ogbe emphasized that while the board lacks the mandate to compel IOCs to change their business models in Nigeria, it is actively collaborating with some oil companies to develop the Nigerian Oil and Gas Parks Scheme.

This scheme is designed to manufacture oil and gas equipment, components, and other research and technology programs.

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