Editorial: Allison-Madueke and the Oil Majors: Matters Arising

Source: huhuonline.com

It is beyond contention that the Petroleum Resources Ministry has been under public scrutiny more than others over the years. This is so given that the ministry supervises the oil and gas sector, which accounts for 90% of the nation's revenue. It is apposite to say that at times like this when the curtain is drawn to herald the end of an era, many discerning and not too discerning minds attempt to put on the public scale, a score card of major players or institutions that have shaped the direction of a national vision.       In other words, as the nation awaits the President's new cabinet, a sort of stock taking and assessment of key players in the cabinet becomes imperative, ostensibly to help chart a road map for better service delivery.

The Ministry of Petroleum Resources under Allison-Madueke is one such ministry where a searchlight is necessary given its centrality to the nation's economic growth. It is the nation's cash cow through which other sectors of the economy are sustained. With a chain of subsidiaries like the NNPC, NPDC, Pipeline and Products Marketing Company (PPMC) etc, the Ministry has been a honey pot of corruption and insider abuses, which make its activities and dealings anything but transparent.        

Reports that major Western Oil companies are planning massive disinvestments from the Nigerian oil sector are anything but comforting. These are ominous indications that former Oil Minister Allison-Madueke might have precipitated this decision by the oil majors because of her crusade against RoyahDucthShell, Chevron and ExxonMobil. Among her pig-headed decisions include; refusing to respect and honor the renewal of ExxonMobil licenses negotiated in 2009 by then Junior Oil Minister, Henry Ajumogobia. She has also ordered the NNPC and the NPDC to take over operations of oil blocks from the companies which acquired the stakes of the oil blocks recently sold by Shell, Total and Agip.        

We make bold to say Allison-Madueke's decision was not taken in the best interest of Nigeria and the President should intervene and restore the licenses accorded Exxon, even just for the image of Nigeria. For a country that spends billions of naira in public relations and image-branding campaigns to tell the world that Nigeria is investor-friendly, Allison-Madueke's decision does just the opposite and portrays Nigeria as a country without rules. How do we expect foreign investors to invest in Nigeria, when all the contracts that are signed will have to be re-negotiated once a new Minister is appointed or a new President takes office?        

The reason advanced by Allison-Madueke that the contract negotiated by Ajumogobia was not counter-signed by his boss, then Oil Minister Lukwan Rilwanu and that the amount of royalties - $600 million - was too small, is ludicrous and laughable and should attract no further comment. Worse even, her decision to order the NNPC and NPDC to take over operations of oil blocks either sold or confiscated amounts to de facto nationalization by proxy.        

All of the oil companies which acquired the stakes of Shell, Total and Agip   did so in thinking they would operate the blocks as Shell had. If the new owners can't be operators, the price they paid was far too high as they won't have any say in development decisions affecting their blocks. The prospect of becoming a minority shareholder and having NNPC's decisions on development imposed on them raises uncertainty and defeats the original purpose for which the blocks were acquired. Which begs the question: why ambush the oil majors? The subsequent effects of such underhand practices have been loss of huge revenue, distrust, waste and lack of confidence on the government. This sad and unpleasant trend must give way to a new era of accountability, probity and service.        

We understand that desperate to be re-appointed Oil Minister, Allison-Madueke wants to demonstrate to Nigerians and to President Jonathan that she's willing take on oil companies. After targeting Shell and Chevron, she is threatening Exxon in its turn.   We consider the media and publicity blitz a calculated exercise in scare-mongering as well as a crude shove intended to mislead President Jonathan into believing that she is the best person for that job. Only the politically uninitiated will also fail to see in the campaign, an underhand plot to play spoiler and discredit Ajumogobia so that he does not succeed her as Oil Minister.     

In any event, we are stating for the umpteenth time that Diezani Allison-Madueke must not return to office. Re-appointing her would suggest poor judgment on the part of the President; a decision that would spell disaster for the oil industry, and scare away foreign investors.    

Huhuonline.com Editorial: