MULTINATIONALS RESPONSIBLE FOR DEARTH OF DOWNSTREAM SECTOR - UBAH
By Kunle Kalejaye
AFTER half a century of oil exploration and production in Nigeria, Downstream operators have lamented the exploitative mode of operation of the multinationals in developing the upstream sector at the detriment of the downstream.
Capital oil boss Mr Ifeanyi Patrick Ubah said failure to expand and invest in the downstream sector by the multinationals have led to lack of competitive refining capacity, robust strategic national reserve of refined products, lack of innovation in the supply chain and imbalance of concession between multinationals and indigenous stakeholders.
Mr Ubah who spoke in Abuja recently said 'if multinationals have complemented government efforts by setting up refineries, that would serve as a first step towards addressing the need of national consumption, things would have been very different today as competition in this direction would have led to further development in the sector rather than depending on importation as is the case today'
He also added developed countries should have a distributed shore based national reserve of refined products rather than relying on vessels as floating storage adding that the downstream has not seen significant innovation over the years as witnessed in the banking and telecommunication sector.
'The operation of filling stations overseas has seen a complete change, they no longer sell just fuels, but provide many other innovative consumer friendly services such as cashless transactions, premium quality fuels and other value added services but in Nigeria the major markets who acquire strategic sites and manage the vast majority of the service stations have not done much in this area and have left consumers without a variety of options'. He said
Despite receiving incentives from the federal government, Ubah said multinationals still operates below optimal capacity
'It is amazing that multinational are still using only one single point mooring (SPM) discharge facility that they inherited from our colonial masters over fifty years ago inspite of all the incentives that they have received from government but indigenous players in the sector have developed world class ultra-modern reception facilities and storage facilities that surpasses that of the multinational with little or no encouragement from government'.
The Capital oil chief also noted that it is on record that government has been granting a wide range of incentives to multinationals in the belief that they will in turn develop the sector but regrettably this has not been the case adding that with the local content in place the state of affairs will change that will stimulate faster growth in the sector which will have lots of benefits to the Nigerian people.
In the face of all these inequality and inadequacies, capital oil and gas industries has within the short period of 4 years left its mark by establishing a world class company that encompasses all aspects of the down downstream sector business.
In its passionate belief in the downstream sector Mr Patrick Ubah recommended government active support to indigenous growth as is the case in many other countries, equitable allocations to investors with structures on ground, long term infrastructural development grants and loan and favorable opportunities for indigenous companies with track records.