In another bold move to elevate Abia State’s economic and industrial profile, Governor Alex Otti has committed his administration to support the Petroleum Technology Association of Nigeria (PETAN) in establishing an oil refinery within the state.

This announcement came during a meeting with a PETAN delegation, led by its Chairman, Engr. Wole Ogunsanya, who visited to explore the feasibility of this significant project.

Otti expressed his enthusiasm for the partnership, noting the state’s readiness to engage with PETAN to ensure the refinery’s success. He highlighted the potential for a joint venture, reflecting a proactive approach to collaboration and development.

“We have some assets that have been identified beyond Ukwa West. Oil activities today in Abia are centered around Ukwa West, and I have it on good authority that other areas of the state have reserves that could be harnessed,” Otti remarked. “By the time we have serious players, you will begin to explore some of these places around Umunneochi and other areas.”

Otti’s administration appears committed to not only supporting the refinery project but also ensuring its timely progress. He stressed the importance of setting clear timelines and regular updates to avoid delays, pledging state support for any needs that may arise during the project’s execution.

Exploring the State’s Untapped Potential

The Governor’s vision extends beyond just the oil refinery. He noted the state’s wealth of untapped resources, suggesting that areas beyond Ukwa West also possess significant oil reserves. This exploration and subsequent development could transform Abia into a major player in the oil industry.

“We take our partnership very seriously, and I want to thank you for identifying us as one of the first states for this initiative,” Otti said. “If there is any support you need, do not hesitate to reach out to us. I would like to give you a timeline so that we won’t just be talking. I would like to be briefed every fortnight on how you are doing.”

A Leap Towards Economic Transformation

Professor Joel Ogbonna, the Commissioner for Petroleum Resources, echoed the Governor’s optimism. He pointed out that the state harbors about 100 capped oil wells, yet to be exploited. This potential, if fully realized, could catapult Abia into the ranks of leading oil-producing regions globally.

“The opportunity will take the state to another level. If realized, Abia will be among the top oil players in the world,” Ogbonna stated.

PETAN’s Commitment to Abia State

Engr. Wole Ogunsanya, Chairman of PETAN, conveyed the association’s dedication to supporting Abia State in maximizing its oil sector potential. He highlighted PETAN’s capacity to facilitate the refinery project, emphasizing their readiness to deploy their equipment and expertise.

“We have engaged in discussions with the government on having a refinery in the state which would serve Abia and neighboring states. This is the first state where we would be executing this program/project,” Ogunsanya explained. “We own the equipment that would find the oil and bring it out of the ground, which would make the work easy for us.”

The proposed refinery project is set to bring substantial economic benefits to Abia State. It promises to increase the state’s Internally Generated Revenue (IGR), create employment opportunities, and attract foreign exchange. The initiative aligns with the broader goal of leveraging local resources for significant economic development.

Ogunsanya emphasized that PETAN, an indigenous company providing oil and gas services, is well-equipped to collaborate with the state government. The association’s involvement is anticipated to bring technological expertise and operational efficiency, ensuring the project’s success.

Transforming Abia State: A Year of Progress

Since taking office a year ago, Governor Otti has been diligently working to change the development narrative of Abia State. His administration has embarked on several key investments across various sectors, aiming to give the state a much-needed facelift and boost its economic profile.

One of Otti’s significant achievements includes the revamping of the state’s infrastructure. His administration has initiated extensive road construction projects, improving connectivity within the state and facilitating smoother transport of goods and services. These infrastructure developments are crucial in attracting investments and enhancing the overall quality of life for residents.

In addition to infrastructure, Otti has placed a strong emphasis on the education sector. His administration has invested in the renovation of schools, provision of learning materials, and training of teachers. These efforts are aimed at improving the educational standards in Abia, ensuring that students receive quality education and are better prepared for future opportunities.

Healthcare has also been a priority for Otti’s government. The administration has undertaken the refurbishment of healthcare facilities and improved the provision of essential medical supplies and equipment. This has significantly improved the healthcare delivery system in the state, ensuring that residents have access to quality medical care.

Moreover, Otti’s administration has been proactive in supporting the agricultural sector, recognizing its potential to drive economic growth and ensure food security.

Various initiatives have been launched to support local farmers, including the provision of modern farming equipment, training programs, and financial support. These efforts are aimed at boosting agricultural productivity and making Abia a significant player in Nigeria’s agricultural sector.

Question: “Why do you think only industrial customers in Nigeria deserve electricity subsidies and how would that help the electricity distribution companies?”

Ndubuisi Ekekwe: In June 2018, in Ronald Reagan International Trade Center, Washington DC, I gave a speech on the main challenges affecting the electricity distribution companies (DISCO) in most African countries. Let me share some of the points I noted:

1. The use of guarantees where governments provide special support and de-risking mechanisms to companies, to invest in electricity projects, produces limited outcomes because the capacity to scale is anchored on those guarantees. And because the guarantees are limited, at the end, nothing much happens over time. In other words, you can guarantee to provide electricity in a  community thereby making the project very appealing. But after that, the next community cannot get help because your guaranteeing capacity is limited. (Solution: we need to have a business-friendly environment where we do not need those guarantees.)
2. The business of electricity distribution company (DISCO) is a challenging one in most parts of Africa. Using Nigeria as an example, the best Nigerian electricity customers are not in the national grid network. Yes, if you have a region and Dangote Cement, BUA Cement, Lafarge, etc are not in your network because they have their own power stations, who are you serving? Dangote Group produces close to 40% of Nigeria’s electricity capacity solely for its internal use. That is revenue gone for DISCOs. With those customers gone, the focus is now the ones where you need to put in so much effort to make paltry income because the best customers have figured out solutions for their electricity frictions. That is the electricity investment quagmire because you have lost the best customers, and only the marginal customers are available. If Dangote, BUA, etc are connected to the national grid, most of the DISCOs will be better today!
3. If the best customers are not in the national grid in Nigeria, and DISCOs are tasked to provide electricity to those who may not readily pay, what happens? DISCOs will keep losing money doing just that. More than 80% of DISCOs in Nigeria are losing money or going bankrupt.  Now, you want to help them by raising rates so that they can improve revenue? Good idea. But the problem is that another set of “best customers” – the “mid-tier manufacturers” which are expected to absorb the costs are already struggling because of exchange rate paralysis, diesel prices, etc for their operations. If you push really hard, most will give up, and that will further hurt the DISCOs as those firms can go down.

Simply, Nigeria should not raise rates for industrial customers even as it makes sense for commercial and residential ones.

What is your business Vision? And how does that Vision drive the Mission to it? It is easier to assemble the best people to accomplish challenging tasks than to pursue something boring.

Indeed, you can recruit more talented people for a journey to the moon, than to go and dig a ground, because going to the moon is more challenging, and also more exciting. Think about it: nearly every kid will like to work for NASA, the US space agency, over one tunnel-boring company because NASA inspires.

In this lecture, I will explain how crafting a winning Vision can help you to attract and retain the best, and in that process, you can win the market. Aspirational vision with a purpose built into it will activate all the necessary factors of production, from capital to labour, and beyond, at scale.

“I want to organize the world’s information” is more inspiring than “I am building a website to store data”. I want “to build a digital human community for all people in the world” is better than “I am creating a website where people share photos and videos”.

What is your business vision? How can you create a great one? Join me tomorrow at Tekedia Mini-MBA Live as I teach on “Creating and Executing Strong Business Vision”