Osezua: Bad Corporate Governance Plunged Oil Industry Investments to $6bn

Peter Uzoho

An oil and gas professional and Chairman of Cordros Capital Limited, a financial services group, Mr. Charles Osezua has attributed investment decline in the upstream petroleum sector from $22.2 billion in 2014 to $6 billion in 2021 to partly the failure by indigenous companies to adhere to corporate governance principles.

He said this was noticed when the international oil companies (IOCs) began their divestments and Nigerian companies who started taking over their assets could not make the needed capital investments because of their failure to keep to corporate governance rules.

Osezua, who doubles as the Chairman of Aret Adams Foundation, made the assertion during his remarks at the Foundation’s 21st Lecture Series held in Lagos, with the theme: “Reinvigorating Investments in the Nigeria Oil and Gas Sector”.

He lamented that over the last 15 years, there had been steady decline in Nigeria’s ability to attract and retain foreign direct investment (FDI) to the oil and gas sector.

According to him, “From a high of $22.2 billion in 2014, to $6 billion in 2021, and it is still declining”.

Osezua pointed out that also troubling was the steady withdrawals and divestments of many IOCs, arguing that while divestments have created opportunities to deepen indigenous participation in the upstream sector, growth however constrained without capital.

“While it is not known for certain, the reason for this decline, indications are that it may not be unrelated to corporate governance and failures to adhere to the principles and values which guided business in the Aret Adams days,” the oil industry guru stated.

He noted that over the last 20 years since the death of Chief Adams, the Foundation had organised the  Lecture Series, in an effort to propagate a culture of excellence and advance the values and principles which defined the late earth scientist, whom he said distinguished himself in his work.

Osezua recalled that in his early days in the Nigerian National Petroleum Corporation (NNPC), the late Adams led efforts to exploit and open the frontier basins of Nigeria and recorded great successes, with six major discoveries offshore.

The Cordros Capital chairman described Adams as a professional, pragmatist and a man of integrity, unambiguous in his speech, which made it easy for his peers and colleagues to believe in his words and trust him.

“Hence, when crude oil price collapsed below $13 per barrel, in the mid 1980s, Aret renovated the joint operating agreements with the International Oil Companies (IOCs) to keep the rigs in Nigeria working on the back of Memorandum of Understanding (MOU), with great success. Thus, while most of the global oil producing countries were shut down, Nigeria was running,” Osezua recounted.