As the debate in the oil and gas sector over policy issues and expectations continues, the in-coming Muhammadu Buhari’s administration has been advised by industry stakeholders to ensure that Nigeria’s next petroleum minister is an experienced, thorough-bred technocrat, who is deeply knowledgeable about the industry, with no baggage of any sort.
They called for the reversal of the trend where the role of the group managing director (GMD) of the Nigerian National Petroleum Corporation (NNPC) is diminished by “successive power-hungry petroleum ministers.”
There is also the need for the immediate restructuring of NNPC so as to remove overbearing influence of a super minister.
The Centre for Petroleum Information (CPI), in its recent commentary, said that Nigeria’s next petroleum minister “should be charismatic enough in the international circuit and yet very effective in the domestic front. The minister should be focused on shaping and giving bite to policies rather than competing with NNPC’s GMD for the day to day operational duties. The minister must be reputable, visionary, deeply knowledgeable about the industry, experienced, not conflicted in any way, and very patriotic.”
Bismarck Rewane, foremost economist and chief executive, Financial Derivatives Company (FDC), in his April 8 note from Lagos Business School Monthly Economic News and Views, urged the incoming administration to ensure “immediate passage of a realistic version of PIB; create new fiscal incentives for International Oil Companies (IOCs) to stimulate investment dollars, without giving away the family silver and immediate restructuring of NNPC to remove overbearing influence of a super minister.”
Emeka Ene, chairman of Society of Petroleum Engineers (SPE), Nigeria Council, in an exclusive interview with BusinessDay, said that he expected the oil and gas industry in the coming dispensation to be driven by technocrats.
“Technocrats have the history of the industry and they will look at things less emotionally. They are the people who are really conversant with the industry. The Nigerian oil and gas industry is a complex industry and therefore requires complex solutions by experienced hands and technocrats,” he said.
The SPE Nigeria Council chairman added that “technocrats will be in the position to look at the investment flows, match them with the technology flows, the local content requirement, as well as, the inherent demands that are not just demands for the rights of the stakeholders.”
Other industry stakeholders also said they wanted a minister of petroleum with enough strong will and determination to push through policies and the initiatives like the second marginal fields bid round which fizzled out after all the noise.
It would be recalled that in November 2013, the Ministry of Petroleum Resources, through the Department of Petroleum Resources (DPR), announced the commencement of a new marginal field licensing bid rounds amidst fanfare and road shows in Lagos, Port Harcourt, Kaduna and Abuja. The bid rounds was proposed for 31 marginal fields with 16 of the marginal fields located onshore while the remaining 15 are offshore, Niger Delta.
After over 16 months, it is clear that the process has been abandoned with no official reasons given for the suspension of the programme.
The CPI, in its commentary, also lamented on how the role of the NNPC GMD has diminished over the years by successive power-hungry petroleum ministers.
“There have been five GMDs in as many years. That trend must be reversed. NNPC has a pool of well-trained, very competent professionals, though depleted in recent years by retirements. The next GMD should come from that pool and not outsiders. In top-management, there are a few ‘private-sector mindset’ executives, head-hunted about a decade ago. This is the time to use the most courageous as GMD. NNPC does not need complete outsiders,” CPI stated.
CPI urged the incoming government to confront all those remote-controlling NNPC, adding that the management of the state oil company needed freedom to operate. “There is the need to run NNPC like NOCs elsewhere and Nigeria will progress. Change should mean change.”
Part of the change industry players want to see in the oil and gas sector with the coming of the Buhari administration is the process of obtaining ministerial consent for the acquisition of oil and gas assets which under the Petroleum Act is tedious and time consuming.
Ayodele Oni, an energy law and policy expert and senior associate in a top law firm, Banwo & Ighodalo, who spoke to BusinessDay last year on minister’s consent said: “It is a good thing that ministerial consent is required prior to completing certain transactions in the very important industry. However, it is important to have clearer rules beyond the Petroleum Act, as to the timing for the grant of consent, because of the challenge delays, which could be upwards of two years can cause to oil and gas transactions. Businessmen would typically say that time is money.”
FRANK UZUEGBUNAM
