By DAYO ADESULU
Despite being Africa’s largest crude oil producer, Nigeria captures only 5% of the total revenue generated from its crude oil exports, according to Kayode Soremekun, a Political Science professor at the University of Lagos.
Speaking at a symposium themed “Nigerian Petroleum Industry: The Way Forward” in Abuja, Soremekun highlighted critical inefficiencies in Nigeria’s oil sector, attributing the revenue gap to the mismanagement of crude oil components and reliance on outdated policies.
Key Highlights from the Symposium
Revenue Leakage Through Unrefined Crude Exports
Soremekun noted that while Nigeria exports crude oil under the Direct Sale Direct Purchase (DSDP) program, many valuable components of crude oil—such as Paraffins, Aromatics, and Sulfur Compounds—are retained by refining countries. Revenue from these byproducts is not remitted to Nigeria’s federation account.
“Nigeria gets only 5% of what we should be earning from crude exports. This monumental loss highlights a lack of knowledge and a misplaced focus on only the upstream segment of the oil industry,” Soremekun said.
Overdependence on Upstream Operations
The academic criticized Nigeria’s narrow focus on upstream activities, neglecting the midstream and downstream segments of the oil sector. He argued that this oversight perpetuates a system where raw materials are exported, while job opportunities and economic benefits are outsourced to other countries.
Learning from Global Best Practices
Soremekun urged policymakers to adopt strategies used by successful oil-producing nations like Norway, Indonesia, and Malaysia, emphasizing the need for comprehensive reforms across the oil value chain.
Environmental and Political Challenges
Addressing environmental degradation in the Niger Delta, Soremekun asserted that resolving these issues requires political will rather than complex solutions.
Industry Challenges and Energy Transition
Paddy Ezeala, Managing Director of Class Masters Ltd, underscored the symposium’s aim to address the oil industry’s challenges, including:
- Insecurity affecting production.
- The inability to meet OPEC quotas.
- Emerging trends in global energy transition.
“The symposium is a platform for experts and stakeholders to deliberate on how to navigate the challenges of the oil industry, especially as the world moves towards cleaner energy solutions,” Ezeala stated.
Call to Action
Both speakers emphasized the importance of public awareness and policy shifts to maximize the country’s oil potential and ensure sustainable growth.
