Dumbo: Rent Seekers are against Oil Sector Reforms

Read Time:9 Minute, 25 Second

Chief Hinks Dumbo was once the director of business development of the defunct Prudent Bank and chairs a civil engineering outfit, Building Concepts. In this interview with Chineme Okafor, he said the embattled Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, has valid reasons to continue with her job as Nigeria’s oil minister

Putting into perspective the operational state of Nigeria’s hydrocarbon industry in the last two years, what is your thought on the petroleum minister, Alison-Madueke’s management of the sector especially looking at seeming strong opposition against her leadership style?

I feel quite uncomfortable when people who should know better than a good number of Nigerians decide to play the ostrich for selfish gains and thereabout mislead naive Nigerians into misjudging good-spirited public officers that work diligently to accomplish their responsibilities to the country.

But if you ask me, I think that Alison-Madueke has grown a thick skin over the past two to three years that she has superintended over affairs of Nigeria’s oil and gas industry; she was practically thrown into a deluge of opposition from the first day the president appointed her as minister of petroleum resources.

People who never anticipated to see a female oil minister in Nigeria were taken aback by that, they kicked and shouted but the president stuck to his guns. They almost knew that with the traditional diligent mindset of women, a woman oil minister was going to be a hard-nut to crack and perhaps, a spanner in the wheels of their phony games in the sector; they began to see the twilight of their games.

Few months into her appointment, we were beginning to see their fears with Alison-Madueke’s indication of the kind of picture the Nigerian oil and gas sector should depict and two years down the line, the facts are there for people to judge from.

Could you be specific on these facts that you talked about from which people can judge the minister?

While I will admit that there are inconsistencies in Nigeria’s petroleum sector which really require the firmness and measures that is exerted by Alison-Madueke to correct, I will also point out that the Nigerian petroleum sector had remained unproductive for a very long time; its ‘poster-boy’, the Nigerian National Petroleum Corporation (NNPC) had indeed acted as a cash-cow to different interests in the country long before Alison-Madueke was appointed, but turning around the fortunes of the sector as well as the operational strategies of its various agencies became an obsession for Alison-Madueke who immediately got the support of her employer to reposition most especially, the NNPC and its subsidiary, the Nigerian Petroleum Development Company (NPDC) that was hitherto churning out abysmal production outputs.

Despite increase in crude oil theft, Nigeria’s crude oil production still averages on 2.30 million barrels per day (mbpd) and her crude oil reserve base as at the last count stood at 36.8 billion barrels while gas reserves are 182 trillion cubic feet (Tcf).

In deep-water operation, the Usan Floating Production Storage and Offloading (FPSO), the new deep offshore Production Sharing Contract (PSC) field which is currently producing at about 103,000bpd was commissioned within Alison-Madueke’s watch while the next major project in Nigeria’s deep water, Egina project that is expected to cost about $15 billion and about 180,000bpd to the country’s crude oil production capacity is underway.

I can also talk about Nigeria’s upstream oil production where the minister has superintended over increased exploration in frontier areas and sustained production in spite of incessant crude theft and pipeline vandalism. The midstream (gas) sector has also recorded increased gas supply to power plants in the country, enhanced gas commercialisation and implemented the gas infrastructure plan and gas for industrialisation.

In the midstream (oil) sector, the repairing and upgrading of facilities in the nation’s refineries and pipelines distribution network has also taken place to sustain in-country product supply, while in the downstream operations, Alison-Madueke has ensured stable supply of petroleum products in spite of pipeline vandals and product theft. Effective and efficient administration of the subsidy programme which remains unsustainably expensive has also been articulated.

I will mention that within 2012 to 2013, 33 work-over wells were drilled in the sector consisting of 32 work-over wells under Joint Ventures and one work-over well in production sharing contract (PSC). Nigeria has nine basins of which the most prospective is the Niger Delta. Others such as Anambra and Chad basins are also known to be rich in hydrocarbon. Presently, exploration has been stepped-up in the entire inland basins of Chad, Anambra, Benue, and Bida/Sokoto/Dahomey; all these are happening under her watch.

But why are there still claims that the minister has not really taken firm steps against corruption in the sector?

How justifiable are these claims, are they just claims without facts? Because I am aware that one of the most controversial policies of Alison-Madueke is the government’s planned removal of state subsidies on fuel prices which had been corruptly managed in the past and which Nigerians were naively misled on.

She supports the discontinuation of petrol subsidy on the grounds that it poses a huge financial burden on the government, disproportionately benefits the wealthy and encourages inefficiency, corruption and diversion of scarce public resources away from investment in critical infrastructure. Now, think of such person seeking to discontinue all sources of corrupt practices as now being accused of nurturing corruption.

Nigerians are witnesses to what went through in the subsidy administration; huge amounts of government monies were expended discretionally, yet the minister in reaction to this, initiated reforms in the sector which a lot of beneficiaries of the old order are kicking against. These are matters of interests, you know.

She set up special taskforces on the much awaited Petroleum Industry Bill (PIB), petroleum revenue, and corporate governance in the NNPC as well as other quick measures to sustain gas supply to power plants for stable electricity generation. These taskforces were equally headed by distinguished Nigerians that include Mallam Nuhu Ribadu, Senator Udo Udoma and Dotun Sulaiman, a renowned management consultant and expert in organisational development, enterprise transformation and business process re-engineering.

These people are there for Nigerians to speak to; results from these measures are beginning to trickle in, the PIB is before the National Assembly for passage into law, the NNPC which Nigerians consider corrupt is now been pruned of bad eggs in anticipation of its new role in the post PIB.

What about other claims of an unaccounted $20 billion oil revenue by the NNPC which the CBN alleged?

I am glad you also said it is a claim but there are several inconsistencies in that claim which I thought that by now should have been boring to talk about, nevertheless, when the suspended CBN governor raised the alarm that as much as $49.8 billion which represents 76 per cent of crude oil lifting in 2012 and 2013 was missing from the federation account because the NNPC had allegedly refused to remit the accruable crude oil revenues into the account, I thought to myself that this was serious considering its possible effects on our economy.

But few days later, the stories began to have various shades and tones and it turned out to be that the CBN was wrong with its claims, its allegations were found to be untrue, after due diligence meeting between all relevant revenue management entities of the government and it was discovered that instead of $49.8 billion, it was about $10.8 billion that was actually unaccounted for but not missing as claimed.

As discovered, the CBN lied and misinformed its principal and Nigerians about the true position of things; possibly, the CBN was ignorant of the fact that the National Assembly had within the contentious periods refused to accept and approve budgetary allocations for subsidy on petroleum products in the national budget, that the NNPC continued to buy crude oil at international price rates, refine and or import to distribute same petroleum products to Nigerians at government’s subsidised rates without funds given to it and that no country can lose such amount of money without feeling its shock.

The NNPC also explained that the $10.8 billion was largely spent on repairs of the country’s 5,000 kilometres of petroleum pipeline network which is constantly subjected to vandalism, unpaid subsidies on kerosene and petrol, as well as its maintenance of national strategic reserves for petroleum products which Nigerians have enjoyed for two years now. It is however good to note that the president has ordered a forensic audit of operations in the country’s oil industry, we therefore await the outcome.

Are you bothered about incessant calls for Alison-Madueke’s removal as minister of petroleum resources?

Not as much as I am bothered that people have a penchant to remain divisive and discriminatory against people that have the heart and capacity to work. We have had more than a dozen voices of judgement and fingers of accusation point at Alison-Madueke for alleged roles in high profile corrupt practices in the sector; from claims by five oil producing communities in Delta State that the minister and Shell Petroleum Development Company (SPDC) Limited have been involved in a N58.9 trillion shady oil deal, to allegations that she superintended the disbursement of over N1.7 trillion to oil marketers for bogus fuel subsidy claims and then alleged mismanagement of processes in the NNPC, even down to recent claims by indigenous oil and gas firm, Oando Plc that its planned acquisition of the business interests of US firm, ConocoPhillips (COP) was being threatened by delay of its consent by Alison-Madueke.

Oando with its claims which amount to deliberate arm-twisting tactics adopted to force the federal government into signing off the $1.55 billion oil assets acquisition deal without due diligence on the transaction, soon forgets that it is the same minister who pushed for the signing of the Nigerian local content law by the president, to enable its likes stake huge claims in the country’s oil and gas sector.

For me, Alison-Madueke has really busied herself working to clean up decades of rot that have come to be synonymous with the Nigerian oil sector, I will rather concentrate on what I have seen her do and not what people say she has done but cannot prove. She has not just done well for the womenfolk but for the global oil industry which deemed it fit to elect her based on her strength as the alternate president of OPEC. I am proud of her as a worthy daughter of Bayelsa state and should continue her job based on the merits she has garnered overtime.