By the Editorial Board of Africa Oil+Gas Report
The relocation of the Department of Petroleum Resources, Nigeria’s hydrocarbon regulatory agency, from Lagos to Abuja, will cost about 900Million Naira (about $2.4Million). That is for a start.
The first phase of the move is anticipated to end at the end of the year, although there has been no official word from the agency itself.
Nigeria’s oil industry is largely based in Lagos. The headquarters of the major oil companies as well as the independents are located in Nigeria’s top commercial city.
As security challenges have heightened in the Niger Delta region in the last 15 years, the main offices of the service companies have moved to Lagos, with the vast equipment yards left in Port Harcourt and Warri, for ease of logistics. The Lekki Suburb, a growing commercial and residential area in the east of Lagos, is shaping to become ‘the new Trans Amadi‘, a phrase which references the name of the industrial layout in Port Harcourt, where the leading oil service firms have their facility and do their stock control.
“We are relocating our headquarters to Abuja and will be communicating the details to all stakeholders shortly”, declares Paul Osu, the DPR’s spokesman.
There has been push for the relocation, time and again, in the past three years.
But it’s a wonder why such an expensive undertaking, at odds with the trends and realities in the industry, is considered so urgent at this time.
It is expected that 300 staff will leave the Lagos headquarters in the first phase of the move. The average relocation allowance per head is ₦3Million Naira (~$8,000), Africa Oil+Gas Report can confirm.
Mr. Osu, a personable public relations professional, did not respond to follow up questions about when exactly the decision came. There was also no response to whether the cost of the relocation is in the agency’s 2020 budget. The 2020 budget for the entire Ministry of Petroleum Resources is ₦75,548,699,111 (₦75.5Billion, or $198Million) for Recurrent Non-debt expenditure and ₦2,930,776,820 (₦2.98Billion (or $8Million) for capital expenditure).
The Nigerian state is struggling with revenue management, the government has repeatedly lamented, over the past one year. It is certainly is not the best time to spend money on such an item.