• Wednesday, July 17, 2024
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Power tussle in asset sales, not theft, crippling Nigeria’s oil sector- Avuru

Power tussle in asset sales, not theft crippling Nigeria’s oil sector- Avuru

Austin Avuru, executive chairman of AA Holdings has said Nigeria’s oil sector is facing a significant challenge, not from oil theft, but from political interference in asset sales.

Speaking at the Harvard Business School (Association of Nigeria) event in Nigeria’s commercial capital, Avuru explained how politics in asset sales has a front row seat in the rot in Nigeria’s energy sector.

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He emphasised that prioritising political interests over transparency and due process in asset sales has led to corruption, mismanagement, and ultimately, the underperformance of the sector.

He noted that those who should manage the process for a smooth transition from oil majors to local operators turned it into an “Approval Power Play”.

“Political connections rather than capacity became the qualifying criteria, in the absence of guidelines and defined processes,” Avuru explained

He noted that a long-drawn process meant that neither the divesting nor the acquiring entity was investing in the assets.

“Much worse most of the evacuation infrastructure fell into ‘no man’s land’; the divesting IOC’s stopped investing in their maintenance and surveillance,” Avuru said.

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He added “A predictable noticeable and measurable decline in production set in but we chose to blame it all on “Crude Oil theft”.

The energy expert’s comments resonate with ongoing concerns about the state of Nigeria’s oil sector.

Despite being a major oil producer, the country struggles with issues such as declining production, inefficient infrastructure, and revenue losses.