Lagos as an oil producing state
As Lagos joins the league of oil producing states in the country, courtesy of indigenous prospecting company Yinka Folawiyo Petroleum Company Limited, one more revenue stream has opened for both the state and the Nigerian government. This breakthrough is laudable, it is a demonstration of life’s endless possibilities wherever there is a will and that, with appropriate support, indigenous investors in the oil and gas sector can be encouraged to do wonders.
The celebration, which followed the oil company’s presentation to the governor of Lagos State, Akinwunmi Ambode, the other day of its scorecard on the oil find, after 25 relentless years of hard work and financial commitment of $400 million dollars, was well deserved. Lagos State’s status of being the first outside of the Niger Delta states to produce oil is also welcome, considering the positive impact it would make on the state, the company, the people and the country.
The success story of oil prospecting in Aje Field, located offshore Lagos coast, is good testimony to the entrepreneurial spirit of the men behind Folawiyo Petroleum. It is the reward for tenacity of purpose over a quarter of a century. The effort will definitely raise Nigeria’s profile in not only among oil-producing countries but in the global community as a whole. Of more significance are the employment opportunities for Nigerians the new venture will generate apart from their multiplier effects and the general positive impact on the people.
Lagos has not only opened a new page in revenue generation, the state seems focused on what to do with accruable cash from the oil find in addition to her already enviable financial strength garnered from her internally generated revenue (IGR): the provision of more infrastructure for Lagosians. The governor spoke the minds of many residents with his comments thus: “In some manner, some things are being put up that seems like puzzle, but the future prosperity of Lagos is more than well assured.”
The indigenous petroleum company has, of course, demonstrated in clear terms uncommon doggedness in 25 years of resilient pursuit of success. In addition, it has shown the opportunities available to investors willing to commit resources to boost oil production in Nigeria. The company’s chief executive, Tunde Folawiyo, was absolutely right when he said that possibilities are limitless if government would continue to lend support to indigenous investors and companies. With that, such indigenous firms could be primed to perform at optimum best and reduce over-reliance on foreign portfolio investors.
The oil well has the capacity to produce 12,000 barrels a day with a prospect of increasing to 25,000 and 50,000 barrels per day in the nearest future. This is encouraging. That little effort will complement production capacity of other wells in the face of serious fall in the country’s output resulting from damages to production facilities in the Niger Delta. Significantly, the economic potentials to stakeholders are enormous and the profiles of indigenous oil exploration has been raised.
The beneficiary state should, however, learn one lesson or two from the mistakes of other states, which are already categorised as oil producing states and have been benefitting in revenue allocations but have failed to fully address the plight of their people with the accruing wealth.
The new oil prospectors should also be conscious of the host’s environment. They must strive to avoid despoiling the natural habitat or the identity of the people. In short, they must leapfrog the problems of the Niger Delta. Certain patterns of service must be made to get to the people directly.
More significantly, a proper federal structure as being canvassed at different fora all over the country would also be ideal here. Giving states the leeway to exploit resources in their domains without the present legal restrictions is the way to go for Nigeria. This move will certainly free the states of financial squeeze, prosper them and make Nigeria stronger not only politically but also economically.