By Sonny Atumah

Preparing for the herald of a new year in global petroleum business is typified byanalysts retreating into the crystal ball game forprice and market projections. As a lay person in crystal gazingmy first thought for 2016wasNigeriain the quagmire of global geopolitical crossfire, and moving unobtrusively into recession.

With an estimated 179 million peoplehow do we feed, shelter and clothe ourselves? My belief is that we get serious and start with the first principles of problem solving rather than engage inrecurring discussions that may not reverberate in domestic value chain, diverse vertical linkages and export revenue shore up.

I watched the Senate’s sessions with Ministers’ designates and how reasonably some tried to proffer solutions to our quest for development. In this period of economic recession Nigerians expect ingenuity, sagacity, commitment, practicality and pragmatic approaches far and above eloquence, to get us out the woods.

Global crude oil prices fell from a crescendo by over 60 percent in 2014;global petroleum brides emergedwith subtle disposition in 2015. There has been a fit of temper amongpetroleum grooms like Saudi Arabia (amarginal supplier) and Russia culminating in China(largest global petroleum importerand second consumer) and Europe, both marginal consumers being wooed with generous price discounts of crudeoil to secure markets.

It does appear that global geopolitics has again taken the centre stage to lock in at price regimes that has sparked off uncertainties in the industry. The scenarios have caused analysis paralysis and a flurry of activities that have unsettled OPEC members like Venezuela and Nigeria that are dependent on crude oil sales for export revenue.

Coming to common grounds appears gloomy as gladiators in the crude oil power play, Saudi Arabia and Russia are up in retaliatory oil moves in a crisscross of geopolitical stronghold of market share. Saudi Arabia has made significant inroads into European market (with America allegedly stoking the fire of sanctions on Russia). Russia’s Rosneft (National Oil Company) head, Igor Sechin was recently quoted as saying that Saudi Arabia was selling oil to Poland at dumping prices.

Three super majors, ExxonMobil (USA), Royal Dutch Shell(The Netherlands) and Total(France) as well as Eni have all been enjoying the purchase of discounted crude from Saudi Arabia for their European refineries. To the Saudis, the classical economic model of price determined by the equilibrium of demand and supply is the survival tactic to control market share.

Russia struck deals with the now largest oil importer China, along with huge gas pipeline deals. The geopolitics of the two oil powers (Saudi Arabia and Russia) intertwined with the American reorganization of shale rigs deployment that is still vulnerable, will put declining countries like Nigeria which spends a lot more funds in conventional drilling in quandary.

Some OPEC membersare galvanizing support for a fair deal in crude pricing, but a discordant tune seems to be distorting members sing along. Some contemplate output pare down (reducing output gradually), while others are increasing output for survival.An estimated oversupply of crude is in the regime of 2.5 million barrels per day coming from Russia and the Middle East.Importers are thus benefiting from this oil market geopolitics.

OPEC cartel’s de facto leader, Saudi Arabia seem to be market share and refusing to cut output excepting non-OPEC members Russia and Mexico arein the deal. Reuter’s reports that Venezuelawhich has been hard hit is proposing a new strategy akin to the late 1990s price band that would make OPEC keep a floor priceabove $70 per barrel.

OPEC instituted the $22 to $28 price band in the late 1990s which it abandoned when crude went over $100 per barrel around 2005.Venezuelawas scheduled to discuss details of her proposal on October 21 in the meeting with OPEC technical advisors on how to shore up the price of crude.

There is the likelihood that OPEC holds on to production quota in 2016. Again Saudi Arabia and internecine rivals Iran may also ramp up supply in 2016 if the latter is let off the hook of nuclear deal by the P5 +1.CNBC reports that Goldman Sachs, ANZ andother investment banks analysed that it could take to the end of 2016 and a collapse in US output for prices to return to profitable levels.

As analysts thought that prices would go higher than the second quarter price of $60, the reality for now is that the roller coaster business portends a bearish trend that may be in the sub $60 from January until June 2016 when crude oil Brent price may climb again to the low sixties a barrel. Agricultureis a major beneficiary of petroleum.Local refining is needed for agricultural machinery and vehicles.

Investment in local process plants would produce artificial fertilizers, pesticides, herbicides, fungicides, mineral spirits and other agro-chemicals, as well as products like storage shelters, mulches, planting bags, agricultural products storing tanks, fish crates and boxes, irrigation pipes, egg trays, fishing nets, among others to enhanceagricultural productivity.

Again here is a list of 50 fashion and beauty products from petroleum we can invest in: Acrylic, nylon, polyester, coated formaldehyde, finishes, organic cotton, socks, buttons, stretchy part of underwear, all bras, running shoes, stretchy jeans, shirts, plastic earrings, bracelets, necklace, sunglasses, lip stick, lip gloss, lip plumper, mascara, eye liner.

Other products are Vaseline, nail polish, eye makeup, makeup remover, hair gel, hair spray, perfume, foundation, face powder, eye shadow, concealer,body lotion, sunscreen, hair conditioner, shampoo, hairbrush, hairbands, bobby pins, toothbrush, toothpaste,soap, tampons, sanitary pads etc.Some building materials from petroleum include paint, damp proof building materials as roofing sheets,floor tiles, as tarpaulin, asphalt for waterproofing, among other 6000 investment opportunities in the petroleum industry.

These investments would bring more Nigerians to produce for the revenue till especially the teeming youth that are yearning for employment. The bridal geopolitics may not be strictly for us as active participants.Process plants investments would make inclusive growth realiseable and increase the petroleum contribution to GDP above the present 14 percent but contributing about 95 percent of export revenues.