Garuba
In this interview with KINGSLEY JEREMIAH, Technical Adviser to Nigeria Extractive Industries Transparency Initiative (NEITI) Dauda Garuba, decried the lack of productivity of the Nigeria-São Tomé and Príncipe Joint Development Zone, insists that Nigeria must return to the drawing board to address the challenges facing the zone rather than continuously pour resources down the drain.
• Continuous Investment Calls For Caution
How would you rate the Nigeria-São Tomé and Príncipe Joint Development Zone 17 years on?
The Nigeria-Sao Tome & Principe Joint Development Zone is a legitimate creation of United Nations Maritime Treaty that permits countries to jointly exploit resources of their contiguous economic zones.
The intention behind it was right and sound, the only snag is that the venture has not seen the discovery of commercially viable oil and gas 17 years after it was established. If it had led to any major discovery, the venture would have been yielding returns by now, and the partners smiling to the bank.
How worried should we be since the joint agreement has remained unproductive several years on?
Success in every business requires undertaking some reasonable risks. It is natural to feel a sense of frustration when the fruits of such undertaken risks are not forthcoming, especially for such a long time. That is what has happened in the case of the Nigeria and São Tomé and Príncipe JDA, which has lasted 17 years of continuous investment.
What are the major factors affecting the pact?
People have mentioned several reasons from corruption, wastage, to lack of returns on investment. These are certainly not new given what we know of the public sector in Nigeria. For me, the non-discovery of significant quantity of oil and gas to deliver returns on the 17-year investment made by the partners, particularly Nigeria, which owns the larger share of such investment, gives cause for worry and concern.
In the face of declining revenue earnings underscored by low oil prices, it creates a sense of frustration and non-judicious use of money. Such a perceived sense of poor application of money has elicited agitation in many quarters, including the National Assembly (NASS), to get Nigeria out of the JDA. While this is understandable, the country must tread with caution and put on its thinking cap.
What needs to happen if the story must change?
Nigeria needs to return to the drawing board to do some stock-taking and a reappraisal of the situation against the backdrop of value for money and foreign policy of economic diplomacy. I am sure that a good decision will be made if this is done. Pulling out of the deal could be difficult for both countries because of the surrounding situation, which bothers on international politics. If you study the origin of the JDZ, it is based on an existing UN treaty; it was the best approach. The only challenge is that it has not yielded something yet. Whether to pull out, or hopefully invest is something that is entirely going to be political, the country would need to rejig the project, but prevailing foreign policy and security makes the situation difficult to address.
Going by current reality, the company said IOCs are indicating interest to return to the zone because there are fresh data and deep water technology that could lead to new discovery. Are you hopeful that this could lead to meaningful discovery?
The entire Gulf of Guinea is now known to be an oil and gas belt. The new discoveries and several other ongoing explorations from Senegal to Angola are a clear indication of this. As to whether to roll out the drums in celebration ahead of plans to return to the zone, no reasonable person counts his/her eggs before they are hatched. We needn’t put the cart before the horse. Discover the oil before the celebration. But even in continuing exploration, we must appreciate the fact that time is of essence, especially in the midst of the search for alternatives to oil or fossil fuel. We need to remind ourselves of the popular saying that the Stone Age ended not because of the absence of stones. So, to return to the joint development zone for further search requires investment in new technology, speed and, above all, the necessary incentives; given that low oil prices usually discourage investment in the sector.
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