Most times in business, leaders are so fixated with industry-wide operating conditions that they miss the moment to put their companies at the readiness level required to unlock and exploit opportunities as they emerge. Saudi Arabia’s Aramco saw a 90% increase in profits in Q2 2022 when it recorded $48 billion profit – possibly the best in the history of business.
As nearly every major nation in the oil world was celebrating, Nigeria was in pain. Due to oil theft, leakages here and there, etc, we could not exploit the moment which Russia-Ukraine conflict presented to us. Rather, instead of benefitting as an oil exporter, on high oil prices, our currency and economy are rattled. Simply, Nigeria missed the quarter of opportunity.
In short, due to imports of refined crude products, the high oil prices were bad for the nation. With that, Nigeria struggles when the price of oil is low and suffers when it is high. Unfortunately the price cannot go sideways and that means the nation is stuck in a paralysis.
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It is what it is: we complain that operating environments are bad in business. But check, we are not prepared to capture value if those environments suddenly change. For years, Nigeria was complaining that the price of oil was low. Unfortunately, when it went up, we were nowhere to take advantage.
Do not run your business that way.
Saudi Arabia’s largely state-owned energy firm has highlighted the colossal profits made by gas and oil-rich nations during the energy crisis by revealing profits in the three months to the end of June up 90% to $48bn (£40bn).
Saudi Aramco recorded what is believed to be one of the largest quarterly profits in history to easily beat the near $26bn it made a year earlier.
The world’s biggest oil company, which is 95% owned by the Saudi Arabian government, becomes the latest oil producer to benefit from soaring energy prices linked to the war in Ukraine.
It is thought to be one of the largest quarterly profits in history, when disregarding one-off increases that tend to inflate company earnings, and is Aramco’s highest since its shares were listed on Riyadh’s stock market in December 2019.
Comment 1: I’ll take the instruction prof. I won’t run my business in a way that it wouldn’t take advantage of opportunities presented to it. Thanks so much for the instruction Prof. Ndubuisi Ekekwe
My Response 1: Yes indeed. We must avoid that mistake. A nation which complained for years that oil price was low could not sell more oil when it suddenly went up.
Comment 1b: Prof Ndubuisi Ekekwe if I may ask sir, is it still possible to get something out the opportunity since the conflict is still on?
My Response to 1b: Nigeria’s current oil sector is designed to work if oil price goes sideways. But since it can only go up or down, we have no way of getting “something out the opportunity”. If it goes up, we spend more to import petrol. If it goes down, our external reserves drop. So as it stands, the situation is tough. (But could change if indeed the Dangote Refinery begins operations at scale. But that depends if he will sell at “loss” when he can make more money internationally)
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Close your eyes for 2 minutes and run through the names of those running Nigeria, from Buhari to Malami, from Ahmed to Emefiele, don’t worry about the spending band, those ones don’t bring revenues. Who amongst them is really inspiring or convincing? Ok, open your eyes.
Now close your eyes again for 2 minutes, this time, just imagine that this current APC team were the guys that took over in 1999 when we started this current thing we called democracy. Where would they had led us by 2007? It’s likely that they would have told you how the military destroyed everything, and therefore would require 30 years to fix.
I still maintain that the APC was naturally suited to be opposition party, nothing about them gives credence to their suitability to national political leadership. When Jonathan called Buhari in 2015 to concede and congratulate him, Buhari said he was surprised! Why was he surprised? Well, you could say that they were busy spreading propaganda and falsehood, without even believing that Nigerians took them seriously; so they became dazed when they were told that they had captured power.
It’s in the hands of APC gang that we learned that both high and low prices of crude oil are all bad news for Nigeria. Oh father lord!