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ON THE PRODUCTION OF OVER 6,000 ITEMS/PRODUCTS FROM NATURAL PETROLEUM RESOURCES

From an email sent to John Donovan and Shell CEO Ben van Beurden: 27 Sept 2021

ON THE PRODUCTION OF OVER 6,000 ITEMS/PRODUCTS FROM NATURAL PETROLEUM RESOURCES

By Zik Gbemre

  • Why is the Nigerian government only thinking of and focusing on “quick returns” derived from the export of natural gas and crude oil without considering investing in the production of these other commodities/items that can be derived from these natural petroleum resources? 
  • Aside from the economic benefits that can be derived from the exports of these finished products/commodities to other foreign countries from Nigeria, the enormous job opportunities this would bring about will greatly reduce the unemployment problems in the country. 
  • If over 6,000 commodities/items that can be derived from natural gas and crude oil are produced locally in Nigeria in high quality obtainable in developed countries, we are sure that nobody in Nigeria will continue to patronize foreign-made goods. 

If over 6000 items/products can be derived/gotten from natural gas and crude oil, which Nigeria is naturally endured well-enough with, how come the Nigerian governments over the years, have not thought it necessary to massively invest in this area so as to greatly improve on the nation’s economy, and the same time provide millions of job opportunities for the Nigerian youths? Why is the Nigerian Government only thinking and focusing on the “quick returns” derived from the export of natural gas and crude oil, without any consideration to invest heavily in the production of these other products/items that can be derived from these natural resources?

Rather than the country, to be best known for only exporting natural gas and crude oil products to other countries at a ‘cheaper exchange rate’, and then later import ‘finished products/commodities’ made from the same natural gas and crude oil at a ‘higher exchange rate’; why can’t the Nigerian Government concentrate on how the country can harness and manufacture these same finished products locally? We believe the country is endured with the human resources and wherewithal to achieve this if given the needed attention. All that is required is the “government’s political will” to take the bold steps towards actualizing this.

We cannot always have the Nigerian Customs waiting at the nation’s seaports/airports/land borders just to keep sniffing and chasing importers of finished goods (some of which are contraband) that are derived from petroleum products into the country, after which they make returns to the government from seized goods. We cannot always have and encourage this situation in the country when the Nigerian government can actually focus on investing in the production of these products derived from natural gas and crude oil, at home. Aside from the economic benefits that can be derived from the ‘exports’ of these finished products/commodities to other countries from Nigeria, the enormous job opportunities this would bring about will greatly reduce the unemployment problems in the country.

If the over 6000 items/products that can be derived from natural gas and crude oil are produced locally in Nigeria in the same ‘high quality’ obtainable in developed countries, we are very certain that nobody in Nigeria will continue to patronize ‘foreign-made goods. The ignorant Nigerian public thinks that natural gas and crude oil can only be used as fuel, but the actual fact is that there are over 6000 items/products that are derivable from these natural resources. Although, the major use of these natural petroleum resources is as fuel (petrol, jet fuel, heating oil, generate electricity, etc.), there are many other uses which, most Nigerians, and those in government are not even aware of. In fact, the list is too numerous to put down here. For instance, all plastics are made from natural petroleum resources and plastics are used almost everywhere: in cars, houses, toys, computers and clothing. Asphalt used in road construction are petroleum products, as the synthetic rubber in the tyres. Paraffin wax comes from petroleum, as do fertilizer, pesticides, herbicides, detergents, phonograph records, photographic film, furniture, packaging materials, surfboards, paints, and artificial fibers used in clothing, upholstery, and carpet baking, Vitamin capsules, Roofing sheets, Combs, Fan belts, Shoes, Food preservatives, Crayons, Life jackets, Insect repellent, Tents, etc.

With the above economic opportunities, we can derive from natural gas and crude oil, why do the Nigerian government over the years, only concentrating on the export of these natural resources just to make quick money? Why not pay the price of patience, and heavily invest in the production of these other derivable products from petroleum?

We have reiterated before now, on the need for the Nigerian Government as well as of those in the nation’s oil and gas industry, to export only 50 per cent of the crude oil and natural gas produced in the country. And then develop the remaining 50 per cent at home to manufacture these other products that can be derived from crude oil and natural gas. This way, it saves the country from the importation of these same finished products from other countries at a higher exchange rate. We cannot, as a country, continue to remain experts in the exportation of crude oil and natural gas to foreign countries at a cheaper exchange rate, then wait to import the finished products derived from the same petroleum resources at a higher exchange rate. Who is losing in this kind of formula? It simply does not make sense.

All we are good at, as an oil-producing nation, is to export our “unrefined natural resources”, enjoy some of the business investments and activities that go with it, and at the end of the day, we still import not only the “refined and finished products” to satisfy domestic demands, we also import virtually every type of technological and scientific hardware, materials, equipment, tools and what have you that are used in the industry. When we critically examine all of this, we would realize that as a nation, we ‘spend more’ in our extractive industry business than we ought to sustain it. We practically ‘repatriate’ most of the revenue derived from the industry simply because we have become a nation that “produces and exports ‘less’ of what it uses in its extractive industry than what it imports. When we do not produce/manufacture all that can be derived from petroleum resources, we are bound to import them, which gives rise to “CAPITAL FLIGHT”. But when the reverse is the case, the nation will not only be ‘earning more’ from crude oil and natural gas production, refining and export, it will also be earning from the export of these other over 6000 derivable products from crude oil and natural gas, to other less endowed nations in Africa and across the globe. This we believe, should be the focus of ‘any reform’ the Nigerian government under President Muhammadu Buhari and the NNPC would want to embark on to transform the country’s oil and gas sector and make it more globally competitive.

By Zik Gbemre

Sept 25, 2021

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