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OIL REVENUE SHOULD BE USED TO DIVERSIFY THE ECONOMY - OBASI

By NBF News
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Mazi Colman Obasi is the Chief Executive Officer, Doubleday Expressions Limited and National President of the Oil and Gas Service Providers Association of Nigeria (OGSPAN). In this interview with JULIET ALOHAN, he says Nigerian governors should look beyond just sharing crude oil revenue and diversify the economy with proceeds from crude oil. He also speaks on the Local Content Act.

The International Oil Companies (IOCs) argue that most indigenous companies lack the capacity to handle some projects in the sector hence jobs are still outsourced to foreign companies despite the Local Content Law, what's your take on this?

That is not true, even the IOCs did not get to where they are overnight, it was through exposure. If you have a PHD degree in Geology for instance, it is only through exposure that you will know the difference between theory and practice. It is only through constant practice that Nigerians can  do well. Nigerians abroad are doing well, why should they be regarded as experts abroad and they are not seen as experts in their own country. Nigerians are challenging them, let them give us the jobs and see if we cannot handle them, but they won't give. What they now do is to register a company and appoint one or two Nigerians as directors in the company and call it a Nigerian company and those are companies they give jobs.

Are there areas in the oil and gas sector that your members do not have the capability to deliver on?

There is none, principally the association is an advocacy organisation which membership is open only to companies that are providing services in the oil and gas industry. We are into advocacy, giving suggestions on how to improve the sector.We want to position ourselves as not only the voice of service providers in the oil and gas industry, but the voice of the average Nigerian, because there is so much ignorance concerning the sector, we want to expose the industry to Nigerians. They must know what the PIB is all about. It is an important bill that they are politicising, the oil and gas industry in Nigeria is the most disorganised industry I know of. We want to create awareness concerning all aspects of the industry, the corruption, inefficiency, and revenue management. Do you know that nobody knows the quantity of crude oil produced in this country, not even the government? It is in Nigeria that the highest amount is claimed to be spent on producing oil. Coming down to the downstream, we do not have a downstream at all, the downstream here is made up of tanker drivers, and any day they feel like, they call strikes, is that what a downstream should be?

The oil companies have refused to use technologies that can tell the amount of oil produced in Nigeria while they use it in other countries, why do you think they are able to get away with these excesses?

It is because of corruption. In Asia for instance, they are called oil contractors, these people are only business people, they are not government, so how can they be dictating to government what they want? Nigeria's Phillip Emagwali, has a super computer that could tell the quantity of oil produced, he came to Nigeria and met the then President and told him how the computer could be used to tell the amount of oil produced and determine revenue from the oil sector and the government said Nigeria had no money to buy it because it costs $120,000 each. But they would prefer to give the subsidy group more than that to import petroleum products but not to buy equipment that would help us tell how much oil we are producing and how much revenue is accruing to us.

It is not the duty of the oil companies to say we know of these technologies, rather it is our regulator who should insist. But we do not have a regulator in Nigeria's oil sector. The Department of Petroleum Resources (DPR) is not empowered even though it is the oldest regulatory agency in this country, but till date, it remains a department in the Ministry of Petroleum Resources. NCC, NAFDAC, SON are all new regulatory agencies but they are all well-equipped and have their directors-general. If DPR has the type of power that CBN has, it would have been able to control the oil sector. Why can't they give DPR that kind of autonomy? Even in the PIB, DPR is not going to enjoy that kind of autonomy, so we are not serious about properly running the oil and gas industry.

If passed into law, do you think the PIB can address the anomalies in the sector?

If passed with good intention it can, but as it is, it can't change anything. If you still have Petroleum Equalisation Fund (PEF) and PPPRA which they have only renamed in the present PIB, nobody is going to invest in this country, and until we begin to export those products we import from crude oil by-products, we are not yet running oil and gas industry. The company which they call NNPC Frontier Exploration Service is just there to deceive us. They say it is to explore for oil in the North, they are just creating those institutions to be siphoning money because exploration business is business. There are companies that do that in the oil and gas industry all over the world as their sole business. They go in and discover the oil then move on. So except they amend and delete some of these institutions we cannot say we have a PIB that can solve some of our problems because if we can attract investors to the industry then, we can say we have an industry that can benefit the average Nigerian.

What do you think is delaying the passage of the PIB?

It is all about interest and money sharing and the IOCs are also causing confusion everywhere.I hear they have a powerful lobby group trying to cause confusion to prevent the passage of the bill. Other countries that have oil used revenue from oil to develop other sectors of the economy to make more revenue; they were not sharing the revenue as it is in Nigeria where the governors are only interested in sharing the money. I expect the northern governors to ask what is in the PIB that could be used to develop resources in the north so as to diversify the economy and not just limit all their arguments to sharing the money. If we structure the PIB well and stop the idea of sharing the money there will be no issue of unemployment in this country in the next five years.

How well would you say the Local Content Act has impacted on indigenous service providers?

I don't have the facts; if they say it has impacted let them publish the names of the companies and what the companies were before and where they are now as a result of the local content. But all we hear is percentage.They have achieved 10 per cent, 20 per cent, let them make public the list of beneficiaries instead of percentages while Nigerians who are in the industry are complaining.

Are you saying you haven't seen operators you know or any of your members benefiting from the content Act?

I have not seen. The Nigerian Content Development and Monitoring Board (NCDMB) was created to solve the problems of outsourcing of jobs in the industry to foreign companies, but what I know is that the organisation does not even have sufficient fund to operate. The fund that the content board should have used is being wasted by the Petroleum Technology Development Fund (PTDF). In my opinion, that is the money that should be given to NCDMB to give Nigerian service companies more competence. If any one said that Nigerians benefited more after the coming of  Local Content Act, let them publish the names of the companies and what they have achieved. For you to be able to do any business in Nigeria's oil sector you register with DPR, so let them get the list from DPR and show us how many of them have benefited from the creation of the content board.