Lokpobiri blames middlemen for exit of oil multinationals

The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, has revealed that several multinationals left Nigeria due to what he called middlemanism.

Lokpobiri stated this in Lagos on Tuesday at the opening of the Sub-Saharan Africa International Petroleum Conference organised by the Petroleum Technology Association of Nigeria.

The minister emphasised that one of Nigeria’s mistakes as an oil-producing nation was introducing middlemen into the oil sector, warning other African countries to avoid the same mistake.

According to him, international oil service giants like Schlumberger, Halliburton, McDermott, and others departed Nigeria due to the activities of middlemen in the industry.

“We have made mistakes. And I’m saying this specifically so that all African countries here today will not make the mistake that Nigeria made. When I became minister, one of the issues I was confronted with had to do with the multinational service companies all exiting Nigeria. They’ve all gone, except, maybe this Italian company, Saipem. That was the only one that was around. So we had a situation where there was a monopoly.

“The other big boys—the Schlumberger, Halliburton, the McDermotts—all of them have gone. All of you here in PETAN have your good days in these companies. That was where you started from. That was where you actually developed your capacity,” Lokpobiri said.

He maintained that the space is big enough to accommodate everybody as the country has offshore, shallow water, and deep water, which he said is beyond the capacity of PETAN members.

“All African countries that are here today, you have the peculiar benefits of knowing the mistakes that were made in Nigeria. What happened when the major service companies left was because they felt that there was middlemanism that was promoted. PETAN members may not want to hear this, but I need to tell you. The opportunity I have as minister today is that I can query you, I can say anything, and nobody can query me.

“But the idea behind this type of forum is for us to share ideas. It’s for us to give a lot of peer review, to say, ’Look, this is what we’ve done in this country. These were the mistakes we made.’ So that when you go back to your countries, you do not make the same mistakes. I’ve always told my colleagues in Africa when we meet that ’come to Nigeria. Come and learn from us.’

“Nigeria is the leading oil and gas producer in Africa. We will continue to do so. Because we have developed an enormous capacity. That didn’t happen by accident, but by deliberate commitment on the part of PETAN members, deliberate commitment on the part of the government,” he stated.

The oil minister maintained that the offices of some PETAN members are bigger than the offices of these international service companies, but that does not mean they can do what the service companies do.

“If you go to some PETAN members’ offices, the offices are two, three times bigger than the offices of Halliburton and some of these big companies. And I’m very happy that this is happening. But that doesn’t mean that they can do what these big companies can do. That’s why I’m saying that we have to coexist,” he said.

Lokpobiri stressed that the middlemen issues impacted the cost of production borne by the Federal Government before the Nigerian National Petroleum Company Limited shares oil proceeds with other oil companies it is in a joint venture with.

Speaking on the theme of the conference, ’Building Africa’s Future: Advancing Local Content and Sustainable Development in the Oil and Gas Industry’,  the former senator said it was heartwarming to see people from other countries coming to see what Nigeria has done as far as local content is concerned.

He disclosed that Nigeria has developed enormous capacity in local content.

In his welcome address, the Chairman of PETAN, Wole Ogunsanya, said PETAN has been following industry trends and has carefully selected the theme and sub-themes of the conference to help shape an even more positive energy outlook for Africa in tandem with its vision to deepen collaborations with governments and critical stakeholders in navigating the next phases of the oil and gas sector.