2014 and 2015 have been eventful years for the Nigerian oil and gas sector, from the over 40% dip in oil prices in 2014 to the accelerated passage of the Petroleum Industry Bill in June 2015. Many of these are in line with the tone set by the previous administration while others have been unexpected surprises. These changes have been greeted by energy companies in different ways. Most are groaning under the burden of lower oil prices, a devalued naira and the shake ups that will inevitably result from the process of removing the oils subsidy and deregulating the oil and gas sector.
Deregulation has been a major request from companies as they seek to provide their services in a market driven by efficiency, where the forces of demand and supply bring prices to the right equilibrium rather than an artificially decided price level. Of course, this cannot just happen in a day. Deregulation in itself is a process that takes time and resources, it’s a reform and a reform is not one to be rushed. Experts, dedicated and experienced leaders are needed for this process that might take months and even years to accomplish and get desired results.
These changes could be the positive progress that we seek – Nigerian refineries start to work at full capacity and we can be a true oil and gas producer and exporter, not simply a reservoir of resources to be mined by the rest of the world. But without proper guidance, the changes could just lead to further irrelevance of Nigeria in the world oil and gas market.
Forward thinking entrepreneurs such as Lara Banjoko – CEO of Zone 4 Energy and one of the few women at the helm of oil and gas sector companies in Nigeria – have already begun to take these new challenges as an opportunity for their companies to diversify their portfolio and embrace new strategies in attempting to modify energy and oil and gas operations to evolve along with the trends of a rapidly changing world. One of the recognised ways oil and gas companies can reinvent themselves and remain relevant, is by gearing their businesses towards more renewable energy sources.
This would seem like killing two birds with one stone as it is common sense to attempt to start replacing business concerns in non-renewable fossil fuels as soon as possible, after all some estimates project a depletion of fossil fuel reserves in as little as 50 years. Also, the increasing customer concerns about the sustainability of their buying decision, makes it a wise move for any company to start creating strategies on how to reassure customers that their purchases are good decisions both socially and environmentally.
The news that Zone 4 Energy has zeroed in on a novel way to reinvent its brand while planning its future business in more renewable energy by starting a subsidiary company – Zone 4 International services, which serves as the waste management arm of the company – is surely one to pay attention to as it shows business prospect, other than the inevitable profit that is being made when all is rosy and Nigeria’s crude oil is still highly valued, as is seen from the downturn that oil and gas companies are currently facing. This is also definitely in line with the LAWMA/Lagos Government’s plans to boost bioenergy production in the state as part of its holistic Reduce, Reuse and Recycle (3R) plan. In the midst of the chaos in the oil and gas sector and even in the nation,
These changes are surely ones that leaves an impression that there is a future for Nigeria after all, and it’s not just about profit from the oil and gas sector, it’s about giving back, identifying and working on opportunities amidst the odds, it’s about sustainability and innovation, as when these are done efficiently, profit will inevitably be made.
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