Massive Job Creation in Nigeria’s Oil & Gas Sector Through Assets Co-location

By Nnamdi Odumody

About 13 percent of Nigeria’s total population is unemployed and in the next ten years, Nigeria’s working age is projected to reach 122 million people. Currently, there are not enough jobs for millions of graduates who pass through the tertiary institutions.

According to a research carried out by Dr Solomon Adeleye and other oil and gas consultants, about 2 million jobs can be created in the oil and gas industry, through Co-Location, which is a practice that promotes optimization through one or more plants sharing mature pre-existing infrastructure rather than building their own or waiting for third party to do so. Dr Adeleye said that if colocation is encouraged in the hydrocarbon sector, Nigeria stands to maintain a minimum of 3 percent GDP growth in the next decade.

Co-location concept is defined as a practice, which promotes optimisation through one or more plants sharing mature pre-existing infrastructure rather than building their own or waiting for a third party to do so.

Speaking at a lecture organized for journalists, on the benefits of colocation, in the nation’s existing hydrocarbon facilities in the country, in Lagos, On Wednesday, consultants in the oil and gas sector, Mr. Charles Majomi, Dr. Solomon Adeleye and Dr. Brown Ogbeifun noted that if the Federal Government allows colocation in the key refineries and hydrocarbon facilities in the country, over two million jobs will be created in the next decade, warning however that a continuous neglect of the sector spelt doom for the country.

The Kaduna, Port Harcourt and Warri refineries can play host to fertilizer plants which will generate over 1000 jobs. Warri Refinery can create 200,000 jobs by hosting at least 20 plants which will make use of its dormant assets. The Ikot Abasi Aluminium and Fertilizer Plant at Akwa Ibom, can create 60,000 jobs, if the policy of co-location is adopted, while the Kaduna Refinery can create 10,000 jobs from the policy.

The Nigeria Liquefied Natural Gas company can change fuel source from ethane, utilize the extracted ethane, and as a result generate $2 billion per year, creating 200,000 jobs, and supporting 20 petrochemical plants. Some of these plants which make hair sprays, and pipes to support new sectors in the economy.

The Department of Petroleum Resources should encourage co-location as a strategy, to attract investors into the downstream sector of the oil and gas industry, as it will facilitate asset de-risking through efficiency in the utilization of the factors of production, as the existing assets will remove the barriers to entry that make new plants risky. This will lead to quicker time frame for establishing petrochemicals, plastics and fertilizer plants in the nation, leading to millions of jobs being created in less than a decade. This will be done without any direct financial commitment from the Federal Government.