OIL SECTOR CONTROVERSY AND ANTICIPATED REFORMS: MATTERS ARISING
The Nigerian Oil sector is currently at a determinant point in its history, a period which some stakeholders have said could either make or mar the industry for decades to come. There are series of committees for the first time looking into series of issue many of them bordering on corruption.
There has also been series of laudable statements issued by the government which only awaits implementation, although some of these are currently witnessing implementation, it is wise to note that the industry has sunk abysmally deep in corruption hence the series of probe sessions it has witnessed recently and still witnessing.
What prospects lies ahead of a post controversial/reform oil industry? Should government be taken serious with attempts to rid the all-powerful sector of corruption? And how far can a female minister in a male dominated environment go in this unprecedented bid to bring sanity to a grossly corrupt industry? In this report Our Correspondent YEMIE ADEOYE took a cursory look at all of these issues and more.
Excerpts:
The Nigerian oil sector is currently at its most controversial heights in history, this is even in the face of appeals by the Federal Government to numerous investors across the globe to take a second look at the nation's economy and consider being a part of it.
How that is to be achieved remains a mystery as no investor would put a penny into a system that lacks clear documented definition and is also enmeshed in corruption.
However, since her appointment as Nigeria's first female petroleum minister , Diezani Alison-Madueke has had a fare share of the controversy currently rocking the sector with several stakeholders calling for her sack citing diverse reasons.
Inspite of this development, the federal government through her has continued to make efforts at implementing the much talked about and urgently needed reforms in the oil sector and that also is taking its tolls on the all-important sector.
Under the current minister of petroleum there has been changes hitherto unheard of in the nation's oil industry. Aside from the quick passage of the Nigerian Content Act by the National Assembly which has created a window of opportunities for domestic players in the nation's oil sector, the NNPC as well as other agencies in the oil sector are now being closely monitored and regulated by the ministry of petroleum resources and the result has been implementation of due process for any government expenditure thereby saving huge resources for the government.
One of her first move after appointment was to sack the then Group Managing Director of the NNPC, the late Alhaji Shehu Ladan while away on official assignment overseas, this move, unprecedented, however threw quite a number of industry watchers and stakeholders off balance just as it paved way for a new modus operandi in NNPC and indeed the entire oil and gas sector.
This, of course came at a price as the Minister continues to face huge criticisms from various sectors of the Nigerian economy for this and other reasons.
After the passage of the Nigerian content Act, which empowers Nigerian operators in the oil sector to fully participate and take advantage of oil and gas activities, the present government has also ensured proper and constant supply of petroleum products especially Premium Motor Spirit thereby averting long queues in filling stations across the country whichg had earlier been a norm across the country.
The Nigerian oil and gas sector under the leadership of the current government has also not only entered into several agreements in bringing about a vibrant oil industry but has made effort to commence implementation of some of such agreements.
The federal government also announced late last year that it would refine more than one million barrels of petrol per day (bpd) by 2014.
The Minister for Petroleum Resources disclosed this at the Society for Petroleum Engineers (SPE) anual conference and exhibition in Abuja.
According to her the nation's refining capacity would receive significant boost in the next three years with the building of three new refineries.
While the turn-around maintenance of the four existing refineries in the country will be handled by the companies that first built them to ensure efficiency.
'The new refineries and the old ones will actually give us the result that we desire in this country,'' she said, and true to type early last week the federal government entered into an agreement with a US engineering company for the construction of six modular refineries at the cost of US$4.5 billion for a combined 180,000 refining capacity.
'The project is estimated to gulp 697.5bn naira ($4.5b), while two of the refineries are expected to be completed within the next 12 months,' Yemi Kolapo, spokeswoman for the trade ministry said in a statement.
Some industry watchers who spoke to our correspondent off the record posited that the current Petroleum Minister has shown a measure of transparency and commitment to the development of the industry even if she's a woman and operating in a male-dominated environment. ' She is being hindered by the system and should be allowed to implement the policies and projects she has initiated.
She has been able record some major achievements shortly after coming into office and these should be commended rather than forgotten as is the case here. Fuel scarcity is history and doesn't occur as in the past due to massive importation and increased domestic refining by the NNPC, this is a testimony of her good intentions for the economy.
Although the fuel import system and the policy of subsidy has been mired in corruption, the Ministry of Petroleum Resources has been able to hold under control undue and frequent scarcity of fuel since her assumption of office.
With the establishment of the Nigerian Content Act which she accelerated, the multinational oil companies have commenced the usage of made-in-Nigeria materials, for example, ExxonMobil used locally manufactured pipes at its Edop-Idoho offshore field, laying of over 100 kilometres of pipeline by SCC in Abuja as well as the development of Nigerian Oil And Gas Employment and Training Strategy, which has resulted in the absorption of over 5,000 engineers, geologists and welders into the industry. Recently, Nigerdock built two platforms for ExxonMobil's satellite fields at its yard in Snake Island in Lagos.
Epileptic power supply across the country has always been blamed on inadequate supply of Gas and against this backdrop the minister launched the gas-to-power policy, which mandated gas producers to strictly meet their supply obligations. Currently, additional efforts to this, is the ongoing construction of gas pipelines to some of the power stations. The link up of these power stations to sources of gas supply is considered more sustainable and cheaper.
To deepen local consumption of gas as well as establish gas-based industry for job creation and in-country skills and technology development, Alison-Madueke launched the Gas Revolution aimed at enhancing utilisation of the enormous gas resources.
Besides the existing few firms that are gas based such as the Brass Fertiliser Plant in Bayelsa State and the Indorama Fertiliser and Methanol Plant at Eleme, Rivers State, the minister has made effort to attract investors such as Xenel of Saudi Arabia and Nagajuna of India to invest in a petrochemical plant to be sited in Koko, Delta State.
On refinery turnaround, the minister has planned to stop the continuous fleecing of public funds by bringing the original firms that built the refineries to carryout thorough maintenance on them. Over the years, the country has been losing princely sum on turnaround maintenance of the refineries with no results. She said with the original companies that built the plants, there would be no need for major maintenance in near future.
All of these are an effort to set the stage for the much anticipated and talked about oil industry reform which is aimed to position the industry and the NNPC especially as a commercially viable entity.
The series of probe that came on the heels of the oil subsidy removal and the occupy Nigeria strike is also part of this government's commitment to sanitizing the all-important sector. Fall outs of the probe continues to be more intriguing as it reveals a sector filled with rot and begging for an indepth cleansing before major, long-term investment could be attracted.