Election result lifts veil of uncertainty on oil and gas industry-stakeholders

Stakeholders in the Oil and Gas industry  say the emergence of Muhammadu Buhari as president-elect of Nigeria will lift the veil of uncertainty on the sector  with a  change in the political leadership of the country.

A senior  official  of a multinational oil  company operating in Nigeria, speaking on the condition of anonymity, said the oil and  gas industry  has been badly  run in the  last six years, describing the industry as  the ultimate beneficiary of this election.

“The industry has lost confidence but this election will signal a new beginning,” he said.

He further said the industry has been undermined to almost the point of no return by poor handling on the part of the political managers. For best result, he said, the President-elect must clean up the industry and make it more transparent.

Other stakeholders said some idle oil projects which have been unnecessarily put on hold by the ministry of  Petroleum under  the current  minister of Petroleum and the Nigerian National Petroleum Corporation (NNPC) should be revived.

The Nigerian electorate on Tuesday  elected Mohammadu Buhari as  the   president-elect. Buhari  polled 15,424,921 against President Goodluck Ebele Jonathan’s 12,853,162 in   last  Saturday’s presidential election.

Buhari is a  one -time   minister  of  Petroleum Ressources  and chairman of  the Nigerian  National Petroleum Corporation (NNPC)

But an official of the NNPC,  reacting to the development, said.”We are expecting, for once, a change in administration of the corporation. I can tell you that the NNPC was headed in the wrong direction, but I think with the emergence of a new government, that will be reversed”.

Industry sources, who had previously feared that a Buhari victory could trigger violence in the oil-rich Niger Delta region, said the fact that the election was adjudged by local and foreign observers to be mostly transparent, had doused the expected tension.

“The fact that the election was fairly peaceful and the results declared without any rancor, has helped to clear the uncertainty that trailed the election and will restore investors’ confidence in Nigeria,” said Mayowa Afe, managing director of Danvic Petroleum International Corp.

Industry analyst, Victor Eromosele added: “That the election is seen to have been fairly peaceful should remove fears of likely unrest in the country.” He added, “the oil region especially, expects to see many suspended projects back on track soon.”

Fears of a possible outbreak of violence in the oil-producing Niger Delta region were further doused, after militant group, the Movement for the Emancipation of the Niger Delta (MEND) which terrorised Nigeria’s oil industry for years, on Wednesday, described the emergence of Buhari as the “right choice.”

“The Nigerian people have spoken and elected Muhammadu Buhari to be the next President of Nigeria,” MEND said in an emailed statement signed by the group’s spokesman under the usual pseudonym, ‘Jomo Gbomo’.

“In doing so, we have not only made the right choice of a new leadership, we have also reaffirmed the strength of our democracy,” it said.

Officials from western oil companies expressed cautious optimism over the emergence of a new administration, and urged Buhari, who is expected to be sworn in May 29, to move quickly to tackle crude oil theft.

“There is still palpable tension in the oil region, like in (southern) Rivers state. However, one would expect that the incoming administration will give priority attention to stop oil theft as promised,” said an official who declined to be named.

Traders active in both the Nigerian crude and downstream markets  of the oil  industry, said  they did not expect any immediate change in the sector, following the change in leadership, though differences in approach were likely to emerge in due course.

“I don’t think Buhari’s election will have any effect in the short term. On the other hand, longer-term, the composition of the government will have an uncertain impact in the Nigerian market,” a European trader said.

“So far, we haven’t seen anything out of the ordinary in the market,” another trader said.

A third trader said he expected “oil equilibriums” to change in the coming months, as leading officials in the Nigerian oil sector are replaced. But in terms of Nigerian gasoline imports, a source said the importing companies were “well established” and it would be “difficult to replace them.”

Olusola Bello with agency report