Diezani breaks silence, reveals side of story in exclusive interview - Part 3 (Final)
Given the way you ended the previous part of the interview, is there anything you would like to say to the Nigerian public?
Yes, I was saying that to whom much is given much is expected. The expectations were high and I think I can safely say that we ran a good race and delivered in many ways. At the end of the previous interview I thanked all staff of the Ministry and its parastatals because yes, together we made deep, lasting changes. I could not have done it all without them. So even though I have expressed my thanks verbally, I wanted to reiterate it sincerely here and say thank you all very much. I want to also appreciate His Excellency President Goodluck Ebele Jonathan who made it possible, through his wisdom to allow various levels of reforms to take place across the sector. I want to thank my family for their patience and support. I also want to thank the Lord God almighty whose grace has kept me.
I ask the people of Nigeria to bear with any shortcomings during my tenure as no one is perfect; but perfect was my zeal to change the fortunes of Nigerians. The next few years will see the palpable benefits of the sectorial reforms I have undertaken these past 4/5years. I have helped in no small way to improve power supply, increase the participation of Nigerian men and women in the sector, ensured the structure to guarantee strong flows of petroleum products across the country, pushed strongly for PIB to be instituted into law and championed the crusade for active gas domestication and commercialisation. Once again, I thank Mr. President and the people of Nigeria for giving me the opportunity to serve.
Madam, you have touched on gas. I have heard you speak about how gas represents the country's next frontier. What has been happening with our gas?
Nigeria has abundant natural gas reserves and ranks 8th in terms of size of proven reserves. Nigeria has an untold opportunity to position natural gas as the fuel of choice and engine for domestic economic growth. In the last five years, I have spearheaded the implementation of the deepest and most aggressive reform of the Nigerian gas sector. Key elements of those reforms include;
(1) The change in the pricing of gas to make trade in the product more commercially viable for gas suppliers, which in turn improved purchase cost as well as availability or access to gas by Nigerians
(2) We put in place an intervention scheme that addressed an inherited debt of N36bn owed to gas suppliers by previous administrations
(3) I kick-started and achieved the most aggressive construction of new gas pipeline infrastructure to meet the growing gas needs of the polity. So far, we have laid over 500km of new pipelines to date, which is a major feat as we achieved this in the record time of 1 year. This includes the doubling of the capacity of the Escravos-Lagos Pipeline System, to 2bscfd capacity - this remains the most extensive pipeline expansion project undertaken by any Petroleum Minister in Nigeria's history. There is also the 120km East-West gas pipeline, which has already started generating power for hundreds of new businesses, reducing the cost of doing business in the country and generating jobs
(4) Another 2,000km has been planned for the next four years if the current pace and commitment toward gas infrastructure development is maintained
Why is gas important?
We are sitting on major quantities of untapped and unharnessed gas reserves up to 167trillion cubic feet (tcf). This untapped gas is the main element required for the generation of power for businesses and homes, yet many Nigerians live with sporadic power supply due to the poor state of inherited infrastructure. This drove my desire to focus on putting vital infrastructure in place to harness that gas and make it fully available to the people of Nigerians.
It also led to groundbreaking collaborations with the Ministry of Power and the Nigerian Electricity Regulatory Commission (NERC) to open a new vista in Nigeria's power sector ensuring that most of the new power stations are connected directly to permanent gas supply pipelines, achieving unprecedented access to gas feedstock.
The projection is that by 2018, if the current pace of infrastructure development were maintained, the nation's backbone grid would be in place with almost all regions connected to gas infrastructure. The collaboration with the Ministry of Power led to the signing, in December 2014, of a Memoranda of Understanding (MoU) between the CBN and the Nigerian Electricity Market Stabilisation Facility (NEMSF). The facility is geared towards providing the much needed financing that has kick-started the electricity market ensuring that the power sector delivers tangible improvements in power supply for the benefit of all Nigerians.
These are just a handful of the extensive activities embarked on in collaboration with the Ministry of Power that has enabled us to secure a supply commitment for development of over 3 billion cubic feet per day of additional gas supply between 2015-2017 from major gas suppliers, as the bedrock for creating a major gas-fired economic boom in the medium term
A national Gas Master Plan has also been established which aims to increase domestic gas supply tenfold to 10 billion cubic feet per day by 2020. The master plan for gas aims to impact tangibly on the nation's GDP.
What is the Gas Master Plan?
The Gas Master plan comprises a three-point strategic focus for gas centred evolution:
- a) Gas for power:
For the first time, power plants are being strategically located next to gas wells in a bid to ensure consistent supply for the generation of electricity to more Nigerians than ever before. Today, new gas wells have been have drilled and hooked up to the Oben, Utorogu and Ossisiomo power plants. We have also completed a strategic 8km bypass pipeline from Obigbo to supply Alaoji; hooked up supply from Uquo gas plant in Akwa Ibom, completed hook up of gas to Omoku and Gbaran NIPP plants and also completed the Itoki-Olorunshogo pipeline expansion.
Today, gas supply to power is established at the very highest level ever seen in the nation. Nigerians will begin to see the most noticeable stability in power supply, a major reduction in expenditure on diesel as our generating capacity now approaches a level that will bring diesel generation to an all-time low.
Over the next few months, an unprecedented addition in gas supply is equally expected as new projects such as the Bonga Gas Divert, Odidi Re-entry, Utorogu Nag2 Gas Hub and Pan Ocean Production Sharing Contract plant all mature
- b) Gas for industrialisation:
Gas is not only a fuel for power but also a feedstock for major industries such as fertiliser, petrochemicals, methanol - industries that have unprecedented multiplier effect on the economy.
The new Gas Revolution Industry Park (GRIP), at Ogidigben, Delta State, has been commissioned and the seed funding provided by the ministry to implement the civil works for the site that will house over $15bn of investments in petrochemicals, fertiliser, methanol and central processing facilities in the Niger-Delta region of the country. It will be Africa's largest industrial park. Civil works has commenced on-site that will have the potential of impacting the GDP levels positively.
The initiative will create over 150,000 jobs at the peak of construction in 2017 and when completed, will create over 5 million jobs across the country.
GRIP will ensure Nigeria is self-sufficient in fertiliser production, boosting agricultural productivity and stimulating geographically dispersed agro-processing industries. The petrochemical plants will produce polyethylene and polypropylene and primary feedstock for countless small, medium and high-end industries, stimulating a robust base for industrialisation of the nation and creation of jobs.
With the fertiliser projects we have on the go today, which are at various stages of project development and construction, Nigeria is on course to be Africa's largest producer and exporter of fertiliser and 100% self-sufficient by 2017. The forecast impact on GDP growth and job creation is significant.
- c) Gas for Transportation:
A pilot programme has been completed in Benin to introduce natural gas as fuel for transportation with plans for a national roll out. Today, over 3,000 cars, mostly commercial taxis, run on natural gas in Benin, served by a network of six gas filling stations.
An expansion has commenced with a new station in Ibafo. Shortly, it will be possible to drive on natural gas from Benin to Lagos, saving an average of N5-N10 per km of travel in fuel costs.
Apart from the obvious environmental benefit, use of gas in transportation is cheaper, will reduce the cost of transportation for the common man, increase the profit for the transporter, significantly reduce the dependence on PMS and reduce burden of subsidy on PMS.
With the advancement being made in gas infrastructure, supply development acceleration and an improved commercial framework for gas, gas flaring reduced in 2014 to about 1 billion cubic feet per day, from an all-time peak of over 2 billion cubic feet per day in previous years. Gas flaring reduced by 20 per cent to approximately 16.7 per cent of produced gas.
There have been the installation of pilot gas flare meters on some lines to enable the government to establish the applicable penalties for gas flaring.
This is extensive. It is amazing how you have managed to achieve so much in such a short space of time. I don't think there is a full grasp of what exactly has been going on in your industry. We are always dazed by the scientific talk that keep coming out, so the benefits are not made clear and many in Nigeria do not grasp that things are happening and the profound results Why is that?
Yes communication, communication, communication that's been our bug-bear. Sometimes you are just so buried in getting the job done that you just don't have the space to speak about it. We did our best to in some ways to talk about the transformation going on. Some of the messages were well understood and effective some were not but they all worked together for good. But as they say 'actions speak louder than words'. Look at the efforts at curbing theft and environmental degradation in the Niger-Delta the progress, there has been progress but little is being said about it. I remain confident that despite a change in the helm of affairs, the deep restructure that have begun will drive the next level of progress.
You have brought up the Niger-Delta, let us go there for a few minutes and put down on record what you have done to deal with the twin scourge of crude oil theft and environmental degradation.
The Niger-Delta is where the bulk of our crude oil resources are located and that region has borne the full brunt of the exploration and production activities over decades. On entering office I wanted to review everything that had been done by way of correcting the level of damage. It was this enquiry that led to the numerous activities that sparked the directive to put clear deadlines in place to cut back on flaring (this has so far reduced by an all-time 20%). It has also led to us taking up the recommendations of the UN Environment Programme (UNEP) to clean up the damage from many years of pollution and put in place measures to avoid recurrence. This led to the creation of HYPREP (Hydrocarbon Pollution Restoration Project) to specifically look at implementing the recommendations of the UNEP report.
So far we completed 100% of the transitional phase objectives recommended by the UN Environment Programme (UNEP), including capacity building initiatives; identification of site for Integrated Soil Management Centre; designing clean-up plans and developing livelihood strategies for Ogoniland. I also ensured that we started the implementation of the emergency measures recommended by UNEP e.g. making available drinking water. We ran an awareness campaign on contaminated water, and carried out an epidemiological study with John Hopkins University, US. Also in collaboration with the University of Port-Harcourt, a comprehensive secondary school curriculum on the effect of hydrocarbon pollution is being taught.
In terms of carrying-along as well as involving the affected communities in the restoration of their environment, I initiated meetings in November 2014 between Ogoni representatives, Nigerian government official, oil industry officials, and the United Nations in Geneva, to chart a clear path forward and drive the momentum to ensuring that the voices of the Ogoni people are taken into account in any large-scale restoration efforts. I sincerely hope that this sort of collaboration continues to gain speed over the years to come as these communities are key to the success of the industry.
In terms of crude oil theft let me quickly state that it is not just about petty theft but some of these activities have been operating on a grand scale by organised faceless and extremely wealthy groups. I also want to state that this activity has been ongoing for several years, well before the Jonathan administration came to be. In fact it was the Jonathan administration that shone light on it in order to try to recapture some of this stolen wealth for the people of Nigeria. Working with security agents and international governments, we have managed to curtail some of their efforts significantly over the past few years.
I championed the Crude Oil Finger Print ('Blood Money') Initiative to deter crude oil theft and purchase by other nations by winning the support of the global community to stop the illegal crude oil theft and the attendant environmental degradation. I also collaborated on the creation of the first world-class forensic laboratory in Imo State Nigeria, investing in technology to identify the country's crude oil DNA, using fingerprints to trace those who buy from oil thieves.
There is also a new dimension into the problem of vandalism that goes beyond theft and that is the upsurge of just sheer sabotage. These are people breaking major strategic pipelines that have no benefit for them. Why would someone for example, pay for a gas pipeline to be broken? They cannot tap it but it is extremely dangerous to the lives of people living in those communities and it affects the provision of critical resources to generate power for industries! It is mindless. I am baffled at the extent that people will go to frustrate a government working for the benefit of the people, with flagrant disregard for human lives. This is greed – sheer and utter mind-blowing greed. It beggars belief. We lose volumes and spend so much money to restore the lines, which sometimes takes weeks.
Let us look at some of the accusations that have been leveled against you as person. For example, the claim of the jets – how will you respond to that now?
Can someone please tell me how $10b can be spent on jet hire over 2 or 3 years! I wonder why people don't challenge some of these figures before taking it as truth. NNPC has always hired jets for its ministers over the years, always. If there were any changes it would be a matter of inflation cost over the years. The ministry and NNPC have to oversee national assets spread across large distances. That requires visits and inspections. We cannot be relying on the IOCs to give us transportation to go and vet their own activities. It immediately compromises the objective. Besides NNPC has always hired its own plane over the years with previous administrations to ensure this independence. The facts and records are there to see. In fact, NNPC tried to purchase a jet during the time of late Rilwan Lukman but the contracts were badly handled, the jet went into demurrage as it was not used for some time and in fact crashed due to technical problems. All this cost had to be borne by the Jonathan administration. So I think Nigerians and especially the press need to be measured and for them to report the facts and not what was fed to them by unscrupulous entities.
For the record, my personal trips are always undertaken via commercial airlines.
What would be your advice to the person that will be taking this seat after you?
I would say sift the chaff from the wheat. The Jonathan administration has achieved so much in the sector and most importantly put significant structures in place that would ensure an extremely efficient and profitable sector for Nigeria and Nigerians.
I would say please look at the PIB and push for its enactment as within it lies the key to creating a world class NNPC with commercial institutions that would be open, accountable, transparent and profitable for all Nigerians.
I would say espouse the continual growth and evolution of the National Content Act so it becomes embedded in the fabric of the sector and indeed the nation, as this is a law that is profitable for all men and especially women of Nigeria.
I would say look at the extensive work that has been done to lay down infrastructure for our oil & gas distribution networks. Gas is on track to be our next big frontier. If the pace that we have begun is sustained we will be able to get critical products to people and business in a manner that will be profitable to them.
I would say look at our refineries. We have put on the table a number of initiatives that would drive a more efficient refining system that would reduce our importation cost and drive profitable business opportunities for Nigerians.
I would say look at the initial efforts taken to grow NPDC into a, world-class company and look at the plans within the PIB to create a truly profitable, 21st century National Oil Company comparable with its peers around the world.
I would say please continue to look at the environmental challenges in the Niger-Delta and empower the communities to be part and parcel of the sector as therein lies the key to the success of the sector. Look deeply at the exploration efforts in various parts of the North of the country. These twin activities would bring wholesome benefits that would profit all Nigerians across the entire country.
Remain resilient to whim and storms of the 'cabals' and the criticisms that will come, as this is indeed an extremely hot seat. Be absolute to the cause of the Nigerian people and let that be your guide.
I have used the word 'profitable' in every way, shape or form. This sector must make a difference to Nigerians and Nigeria. It is one of our major resource centres and we have to make it work for us Nigerians. This is what drove me and I hope it will be the driver for the one coming after me.
I have been extremely privileged to be a woman that has brought so much change to a sector that has historically been extremely challenging and male-dominated. I have tried for the women of Nigeria and the world, as major glass ceilings were broken. I have tried for the men of Nigeria.
I have and will continue to do my bit to continue to create value for Nigerians.
I once again thank God for the opportunity to serve and former Presidents Yar' Adua (late) and Goodluck Jonathan for entrusting me with these amazing responsibilities.
Thank you for your time madam.
Thank you too.
Interview conducted by Arit Essanga, freelance journalist, African Free Press.