According to Dolapo Oni, oil and gas analyst at Ecobank, the country’s lack of planning has also been part of the problem.
“It’s not enough to set the goals and say you want to achieve this, there has to be clearly defined steps to say this is how you want to achieve it,” says Oni.
(READ MORE: Integration key to East Africa's oil & gas sector)
According to Oni, these steps include factors that will produce a successful oil industry such as:
- Securing a price.
- Production – a clear strategy on how to increase production whether it’s through international or local independent companies.
- Trade – securing and protecting market share.
- Value chain – looking beyond the oil and gas value chain to areas such as the photochemical industry and fertiliser industry.
- And finally, funding – securing equity to build a sustainable oil sector.
Oni says that a country such Nigeria, whose government relies on a majority of their revenue to come from oil, should’ve considered hedging.
“You look at the fact that even our neighbour, Ghana, has actually considered hedging at some point. But if we were going to look at [Ghana], within the years that they actually did hedge, they made some losses,” he said.
(READ MORE: When will the oil price rise again?)
On the issue of whether Nigeria should stay in OPEC, Oni believes that the West African country should stay in OPEC as it is still relevant. However, he believes the world needs a stronger and more diverse version of OPEC with more members.