Oil price spike from global tensions could benefit Nigeria – Magnus Abe

Magnus Abe, a former lawmaker representing Rivers South-East, on Monday said the recent rise in global crude oil prices, driven by escalating tensions involving Iran and the United States, could offer Nigeria an economic opening despite the immediate strain on fuel costs.

Abe spoke with journalists after appearing before the Senate Committee on Petroleum Resources (Upstream) for his screening as Chairman of the Board of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

The committee, chaired by Senator Eteng Jonah Williams (Cross River Central), screened several nominees sent to the Senate by President Bola Ahmed Tinubu for appointment as chairman and non-executive commissioners of the commission.

In keeping with Senate tradition, Abe was asked to “take a bow and go,” a privilege often extended to former lawmakers appearing before the chamber for confirmation after serving in the National Assembly.

Speaking on the global implications of the ongoing geopolitical tensions and their impact on Nigeria’s fuel market, Abe said the situation should not be viewed solely through a domestic lens.

“This is a very difficult time for the entire planet. It’s not just a Nigerian challenge; it is a global challenge,” he said.

He acknowledged that the spike in crude prices could worsen fuel costs for Nigerians, but noted that higher international oil prices could also boost the country’s revenue from crude exports.

“You must look at the balancing act. Prices will definitely be affected, but revenues from our oil sales will also be positively affected. There will be some measure of balance in what will happen,” Abe said.

He urged the international community to work toward ending the conflict, stressing that beyond the economic implications, the human toll of the crisis should not be ignored.

“Human beings are actually dying. Our prayers should be that this conflict, which in my opinion is unnecessary and harmful to the entire world, should quickly come to an end so that we can begin to recover,” he said.

Abe, however, advised Nigeria to take advantage of the market shift by expanding investment in the oil and gas sector, particularly in marginal oil fields and gas production.

“If the price of oil is going up, it gives us an opportunity to invest in marginal fields that otherwise would not have been profitable. If gas supplies are being disrupted globally, this is an opportunity for Nigeria to optimise its own gas production, which will create jobs and new opportunities,” he added.

The former senator also thanked President Tinubu for nominating him to serve on the board of the regulatory body.

“I am sincerely grateful to Mr. President, the Commander-in-Chief of the Armed Forces, Bola Ahmed Tinubu, for considering me and other members of the board worthy of service to this country.

“I see it as a great privilege and an opportunity to contribute to the Renewed Hope Agenda,” he said.

Abe said the incoming board would work with industry stakeholders to strengthen regulation in the petroleum sector.

He noted that the Petroleum Industry Act (PIA) had introduced mechanisms that could help address persistent challenges such as oil theft and tensions with host communities.

“With the Host Communities Fund, the host communities themselves are now stakeholders. They benefit from production, and nobody destroys what he is eating,” he said.

During the screening, one of the nominees for non-executive commissioner, Engr. Paul Jezhi, highlighted discrepancies in crude oil measurement at custody transfer points as a recurring challenge in the industry.

According to him, deploying modern metering technology could significantly reduce the problem.

“The discrepancies in crude oil at the custody point have been a long-time issue. But modern meters can now record measurements within a margin of plus or minus one to five, and when such meters are deployed, these discrepancies will largely disappear,” Jezhi said.

He also proposed the use of drones and satellite surveillance to curb oil theft and pipeline vandalism, particularly in the Niger Delta region.

President Tinubu had earlier written to the Senate seeking confirmation of nominees for the boards of the Nigerian Upstream Petroleum Regulatory Commission and the Nigerian Midstream and Downstream Petroleum Regulatory Authority.

In the letter, Abe was nominated as chairman of the NUPRC board.

Abe previously served as a senator representing Rivers South-East and was also a board member of the Nigerian National Petroleum Corporation.

He currently chairs the National Agency for the Great Green Wall.

Other nominees for the NUPRC board include Jezhi, a former chairman of the Trade Union Congress in Kaduna, and Sunday Babalola, a former deputy director at the defunct Department of Petroleum Resources, which was dissolved following the enactment of the Petroleum Industry Act in 2021.