National President of the Petroleum and National Gas Senior Staff Association of Nigeria, Olabode Johnson, speaks with GIBSON ACHONU on issues troubling the oil and gas sector in Nigeria
The Federal Government has rescinded its decision to sell the nation’s refineries. What is your take?
Our take as a body and key stakeholder in the sector is that going by the standard of the Organisation of Petroleum Exporting Countries, all relevant countries must have state-owned facilities. But that does not mean there should not be competition where we can also ensure that private investors also establish their refineries. Our view is that, it is not advisable to sell off specific assets to individuals. That would mean the government can also be held down by these individuals as we saw before the general election whereby marketers held the country to ransom. Such can lead to other unforeseen problems. However, if private investors are also encouraged, there will be challenges but when there is no political interference and once turnaround maintenance is done promptly, the country will benefit. This will reduce the issue of petroleum subsidy to the barest minimum and Nigerians can benefit from its God-given blessings.
Does it matter if President Muhammadu Buhari heads the petroleum ministry for 18 months or throughout his tenure?
In my opinion, it may be a good idea as former President Olusegun Obasanjo had set a precedent during his tenure under this democratic dispensation. Buhari has a good knowledge of the industry because under the military regime of Obasanjo, he was the pioneer chairman of the Nigerian National Petroleum Corporation and also the Federal Commissioner for Petroleum and Natural Gas. Under him at that time, some good policies were formulated including the building of refineries. Also, if you look at it when Obasanjo doubled as the Minister of Petroleum Resources, there was stability in the industry. It was then that Dr. Gaius Obaseki was the Group Managing Director for about four years. There was stability even in policy formulation and implementation. But if the President decides to head the petroleum ministry it can guarantee stability. Also, it will eradicate bureaucratic delay always experienced in the industry because the GMD will not need to wait for any minister to get approval from the President. He will be reporting directly to the President. It is not a bad idea.
There have been lots of controversies on the payment of joint venture projects funding by the Federal Government. How do you think this can be resolved?
The Federal Government has been said not to be funding the joint venture projects adequately, by providing (the needed) counterpart funding. Joint ventures are projects which the Federal Government has higher percentage than the IOCs. The Federal Government is not fulfilling its own part of the obligations. Instead, the government owes the IOCs and this is really affecting the industry negatively. Existing projects are stalled due to inadequate funding while new projects are not taking place. We, as a union and critical stakeholders in the industry, are advising that the same way the government is committed to settling petroleum importers; it should consider settling the joint venture debts by instalments. The Federal Government should earmark funds to pay its own part of the cash calls. Before you know it, the government will finish paying its debts and this will make the industry become vibrant again. Also, there will be job creation, as more projects will signify more employment. There will also be development of new frontiers and increased exploration and production, meaning more money for the country.
Why do you think having oil subsidy hasn’t worked so far for the country?
PENGASSAN is not averse to the removal of fuel subsidy because we are aware that money spent on subsidy can be spent on the development of other critical infrastructural facilities in the country. Our argument is that there is no way we can remove subsidy when the country is still depending on importation of petroleum products. There is a need for the Federal Government to increase local refining of crude oil to meet local demands of the products. Thank God the present administration of President Buhari has brought the refineries back on stream to augment importation and this has reduced the pressure on the value of the naira and the economy. It will be recalled that during the twilight of the past administration of Dr. Goodluck Jonathan, oil importers held the country to ransom and almost caused a lot of problems in the country. This singular crisis could have caused a collapse of any government or economy. This is why we have been saying abrupt removal of subsidy can cause chaos in the country. If local refining can be increased by bringing the existing four refineries to optimal performance and production, ensuring establishment of modular refineries of about 100,000 barrels per day, this will also generate more jobs.
On why the subsidy has not worked in Nigeria, it is due to insincerity and lack of transparency. The subsidy policy is fraught with lots of distrust, unfaithfulness and corruption. From events in recent time, the government has commenced the process of cleaning up the system.
There have been cases of oil bunkering and illegal refineries in the country and it has been alleged that some top oil workers working with the Niger Delta militants are behind this illegality. What’s your view?
If something is illegal, it is wrong and there is no good government that will embrace illegality. If those refineries are illegal, they are illegal. There are no two ways about it. If those involved really want to do legal business, they can apply for licenses and meet the requirements set by the government. PENGASSAN as a body is against corruption. If any of our members is found collaborating with the illegal businessmen/women, the member stands sanctioned. Nevertheless, I know that our members can never be involved in that kind of mess. This is because the revenues meant to project job security and welfare of our members are being unscrupulously diverted.
The Buhari administration stated that it had compiled a list of oil companies that committed fraud against the country. Do you see this oil cabal being brought to book?
Once there is a will, there is a way. I also believe that with the current posture of Buhari, if he can match his words with action, there will be sanity in the industry. If the President makes Nigerians know that it is no longer business as usual and that he has anti-corruption agencies that can also follow his posture strictly, Nigerians will see a sanitised Nigeria. As his administration is young, he is trying to ensure that there is stability in all the sectors of the nation’s economy. Again, if there must be a total sanity, there must be no sacred cows. It is when Nigerians have seen that there are no sacred cows that there will be what is called total system sanity. With that, there will be hope for the country. The common man will be happy and sing solidarity songs, backed up with prayers for Mr. President.
Kerosene is being reportedly sold as aviation fuel. What does your association think the FG should do about the allegation?
Selling kerosene as aviation fuel is very scandalous and inhuman. It can also lead the nation to crisis. And once the crisis sets in, the country will begin to lose human lives. We don’t want such to happen. The lives of Nigerians flying by air are endangered with the use of kerosene as aviation fuel. This is against God and humanity. No matter the stability in the sector now, the government still needs to look into it. I also believe that that is why Mr. President is taking his time in constituting his Federal Executive Council. I am equally sure that he will look into the constitution of those to man the sector. I am thinking that he is going to be involved and if he is going to be Minister of Petroleum Resources for 18 months (as he has said), he is going to have somebody as an adviser like what Obasanjo did when he was the President, as well as the Minster of Petroleum Resources. There was also an adviser then in the person of the late Rilwanu Lukman. The work of the adviser is to garnish the President with useful information and advise properly.
It is pertinent to note at this juncture that there are two key sectors of the economy that Mr. President has to declare a state of emergency on. They are the power and energy sectors. This is very important so that all these issues of oil theft, pipeline vandalism, PIB, subsidy and state of refinery among others can be addressed. Mr. President (if he is involved) may say issues concerning the sectors will be addressed two times every year and the outcome has to be made public for Nigerians to see. The assessment of the sectors could span between January to June and July to December. I strongly believe that this will ensure stability in the two key sectors. It will also show what is done and areas that need improvements in the sectors. I mentioned the two sectors because it is on them that the economy of the nation is run. Again, I want to say that if there is steady power supply and steady supply of petroleum products, there will be more stability in the country.
BY GIBSON ACHONU, PUNCH
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