Lagos — This cannot be the best of times for international oil companies operating in Nigeria. From having to contend with militancy and the destruction of oil facilities in the Niger Delta, they are being compelled to prepare for the vast changes to take place in the oil and gas sector after the enactment of the Petroleum Industry Bill (PIB)?that will set out new terms and conditions on the way the industry operates. As if that isn't enough head ache for them, the persistent drive by the Asian national oil companies to get a slice of the Nigerian oil industry pie must be causing them sleepless nights.

For several Asian countries, the need to secure their future energy needs had become compelling. Rapid economic expansion in several of these countries at the turn of the century meant that most of them had to look outside for natural resources, including energy fuels, needed to run their factories and economies. The external search for natural resources was fueled by one primary consideration: the overwhelming need to keep pace with demand from the Western economies of Europe and the US for Asian goods and services.

Understandably so, the natural resource-rich continent of Africa became the hunting ground for a lot of Asian countries. In spite of the tremendous leap Asia countries had made in terms of economic growth and development, several of its regions, especially in the rural areas, remained underdeveloped and poor. Asia also boasts several cultural similarities with the African continent.

The Asians were also smart enough to recognise that there was a serious infrastructure deficit on the African continent which the West was unwilling to plug. It was only a matter of time before countries like China, India, South Korea and Taiwan came knocking on our doors with offers to build power stations, seaports, oil refineries, railroads, expressways and what have you, in exchange for unexploited natural resources.

Countries like Nigeria, Angola and the Sudan with vast crude oil and gas reserves were natural magnets for the resource-hungry Asian National Oil Companies (ANOCs). They set about courting and wooing the governments of Nigeria and Angola. China even took it up a notch when it backed the government of Omar Hassan al-Bashir of Sudan who was against the deployment UN security forces in his country to stop the genocide in Dafur.

It was therefore not surprising when in 2005 former President Olusegun Obasanjo embraced the Indians, Koreans, and to a lesser extent the Taiwanese, with open arms. His dalliance with the Asians coincided with the period Nigeria had successfully secured a significant debt write off from the Paris Club and was in the process of offsetting the balance. With more than two-thirds of Nigeria's foreign debts off its back, Obasanjo was in a position to open up discussions with new economic partners who were not just throwing cheap loans and credit guarantees his way, but were willing to invest in infrastructure projects in the country, in return for some choice oil blocks.

As a sweetener, Obasanjo decided to make their entry into the oil and gas sector easy by introducing the concept of right of first refusal in the 2005, 2006 and 2007 oil licensing rounds. In return, the Chinese with the most cash to throw around committed to investing in the Kaduna refinery, construction of a double track, standard gauge railway line from Lagos to Kano, and a 2,400MW hydro electric power project in Mambilla Plateau. As a clue to China's ambitions to further increase its presence in Nigeria, China's export credit agency, Sinosure, announced in April 2008 that it would guarantee up to $50 billion worth of Chinese investment in Nigeria.

In order to protect their turf, the IOCs became critical of the ANOCs who were gate crashing into what they had always taken for granted was their play ground. To press home their displeasure, they mounted a media campaign just before the 2007 bid round against the ANOCs and their local content partners and made good their threat not to participate in the tender process proper. One of the issues they brought to the attention of the public was that not one of infrastructure projects promised by the ANOCs had taken off. The oil-for-infrastructure deals, the IOCs insisted, were just a ruse being used by the Asian countries to get their hands on Nigeria's oil.

The assertions by the IOCs was given fillip when it was discovered that even the so-called steering committees set up under the Nigerian National Petroleum Corporation (NNPC) to monitor the feasibility studies required to just start the multibillion dollar projects, were not functional. Where the steering committees had been set up, they hardly ever met mainly because officials from NNPC were ignorant of the terms of the oil-for-infrastructure projects struck between the Federal Government and the respective Asian governments.

The exit of the Obasanjo administration shortly after the 2007 oil licensing round did not help matters either. His successor, Umaru Musa Yar'Adua had a deep rooted suspicion for almost everything started by Obasanjo. He set about reviewing, suspending, dismantling and cancelling all the deals struck with the Asians, including the revocation of a number of oil blocks awarded to the Korean National Oil Company and Sterling Global Oil Resources Limited, a company with Indian ties. Even though the oil blocks awarded the Chinese and OGNC Mittal (another Indian oil firm) were not revoked, the fact that the Yar'Adua administration had cancelled the railway and Mambilla contracts, forced the Chinese to review their Nigeria strategy, at least for a short period.

Right of Reply

Amadi's Grouse against Mark

I find "The Road to State Failure" written by Dr. Sam Amadi and published on the back page of Wednesday, October 14, 2009 edition of THISDAY amusing and disappointing. Amusing because we can understand his passing shots at the person of the President of the Senate, Senator David Mark. He knows as much as I do that his grouse with Senator Mark is not just personal but borders on clandestine motive. I challenge him to contend this with me. His piece was also disappointing because given his level of education, I find it incongruous with decency that Harvard-trained Amadi could reduce the tragic death of 70 Nigerians to a delusion of grandeur and politics. The office of the President of the Senate has no tradition of joining issues or writing rejoinders to arm-chair critics, but when a man perceived as knowledgeable deliberately embarks on a voyage of mischief, outright falsehood, distortion of facts, and ultimate character assassination, it behoves on any right-thinking member of the society to put the record straight.

The topic of Amadi's comment on the state of the roads in Nigeria, with particular reference to the sad death of 70 commuters on Anambra road, touched the hearts. However, his view or vexation against the system does not give him the latitude and liberty to cast aspersion and denigrate the character of the President of the Senate who has exhibited more concern and grief over such saddening events. Not a few Nigerians will recall that early in the year, the Senate under Distinguished Senator Mark's leadership, empanelled an ad hoc committee headed by Senator Heineken Lokpobiri to investigate the state of roads across the nation. The probe was precipitated by a motion sponsored by Senator Ayogu Eze and was overwhelmingly carried by the unanimous decision of the floor. The Lokpobiri committee conducted public hearings during which all actors, including present and past ministers of works as well as contractors, were summoned to answer questions on their roles on the collapse of Nigerian roads. The committee recently submitted its report to the Senate and it should interest Amadi and his likes to note that the report has been slated on the priority list of the Senate for debate.

And just last Wednesday, the Senate, through a motion brought by Senator Joy Emodi on the death of the 70 Anambra commuters, sent a delegation to commiserate with the government and people of Anambra State on the incident. The Senate further directed the Ministry of Works and relevant agencies to be alive in their responsibilities in terms of fixing our roads and making them more motorable. The oversight functions of standing committees of the Senate have been accelerated under the leadership of Senator Mark and it is clear from all indications that it is no longer business as usual. Amadi will be admitting failure as a major stakeholder of the Ken Nnamani Centre for Leadership Development if he claimed ignorance on these issues as they happen in the Senate. I therefore find it strange that Amadi will easily pick Senator Mark for attacks over issues bordering on the state of the nation's roads but for his long sought pecuniary interests.

Truth, as my parents instructed, is sacrosanct and will always reverberate like a calabash pushed under the stream. Amadi told outright lie in his declarative statement that Senator Mark said: "Nigeria Has Realised Her Full Potentials." What the President of the Senate said and was widely reported by the mass media was: "At 49, no one can argue that Nigeria has realised its full potentials. This notwithstanding, we have made remarkable strides especially in our steady march towards democracy and rule of law. There are some successes we have to celebrate and consolidate". He should revisit all the newspapers that carried the report and check his "facts" again Amadi would need to re-invent his tar-splashing strategy because like the similar ones of the past, even this will not stick. What Amadi attempted to do was to inflame passion and mobilise anger against the state and its leaders. He should purge himself of hatred to his fatherland by beating a retreat as no sane man carries a weapon of destruction against his nation.

Ologbondiyan is Media Adviser to the President of the Senate.