The perambulation continues in Nigeria’s oil sector

By IndepthAfrica
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Jul 26th, 2012
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Uche Igwe

I was invited to a roundtable on the Nigerian Petroleum Industry Bill organised by the Africa Studies Department of the Johns Hopkins University in Washington DC on the 3 November 2010. During the panel discussion, I alerted the audience that what the Nigerian government intended to do (at that time) was simply a Petroleum Industry Perambulation (PIP). I explained that the government wanted to take unsuspecting citizens through a deceptive, torturing, time consuming and money guzzling journey in the name of reforms. The journey, I warned, would begin from point A and after many months (even years) of rigmarole, travellers would find themselves back at point A, where they started.

Almost two years have passed since I made that speech and, sadly, I still find no reason whatsoever to review my position. My view still remains that contrary to its rhetoric, the Nigerian government has no intention of reforming the oil and gas industry. The recent submission of the Petroleum Industry Bill is yet another calculated effort, by a government whose credibility and legitimacy is waning by the day, to hoodwink Nigerians. Let me give you three reasons that led me to this sad conclusion.

The first is to draw your attention to the personality who is supposedly heading the reform team on behalf of Nigerian government – Mrs Diezani Alison Madueke. This Petroleum minister is a former director of Shell Petroleum Development Corporation. This is a clear conflict of interest, as Madam Minister will be torn between favouring her former employers and the government that she is currently serving. For a sector that is the heartbeat of our national economy, how can we rely on such a person to be fair and patriotic in the conduct of such a sensitive assignment? Close observers in the industry believe that Shell is one of the biggest beneficiaries of the murky state of the Nigerian oil industry that an effective PIB seeks to sanitize; they will therefore stop at nothing to resist any reform. The still-birth attempt of the sixth National Assembly to pass the Petroleum Industry Bill was allegedly truncated in a guerrilla ambush that had strong foot prints of the International Oil Companies. In 2010, leaked US cables quoted Ann Pickard, the then Vice President of Shell for Africa, as having boasted about how Shell sent employees to infiltrate all relevant government agencies, to know everything going on in the inner circles. Pundits are already pointing fingers as to those who could be on this unpatriotic assignment.

My second point is on the Nigerian National Petroleum Corporation (NNPC). Some misguided optimists suggest that the expected reforms will convert NNPC from its current form as a cost centre to a profit centre. Until the NNPC ceases to be an appendage of the executive arm of government and an epicentre of patronage, no such reform can see the light of day. The KPMG Report of 2010 details manipulative opacity, deliberate duplicity, self-inflicted inconsistencies and corruption within the NNPC network. In the name of data mismanagement, variable crude oil sales and exchange rate fluctuations, millions of dollars are siphoned daily from the coffers of NNPC to elsewhere. Is it not myopic to expect the alleged beneficiaries of the status quo to reform their biggest source of income and influence? Anyone who wants to reform NNPC should first consider reforming our politics. Under the nose of these same characters, trillions of naira leaked away in the name of fraudulent fuel subsidy payments. Even when part of what transpired is now in the public domain, those allegedly indicted have not been prosecuted. How can we rely on the same government that could not do the right thing in the downstream subsector to now perform miracles upstream? Is this not an imprudent effort to douse the odour already oozing out the industry? The depth of decay discovered so far appears too colossal for the brand of tokenism touted by these ‘reformers’.

My third and final point is about the National Assembly. I have tremendous respect for parliament as an institution; however, the recent conduct of affairs in the hallowed chambers has inspired little confidence among observers. By parliamentary procedure, the Petroleum Industry Bill handed over by the executive becomes the property of parliament. It is expected that in their wisdom they will include or exclude whatever they deem necessary and consistent with national interest. As things stand now, can anyone comfortably attest to the fact that our parliamentarians will rise above personal greed in pursuit of what will benefit the nation and the common good of citizens? For many, the antecedents of the current Nigerian parliament point to the contrary. Farouk Mohammad Lawan and the ostrich game on the subsidy probe bribery saga is the sad picture that an average member of the Nigerian parliament conjures. How can we then rely on them to deliver an Act that will reform the most important source of revenue to our national economy? Do the legislative and executive arms of government converge on such matters of urgent national importance? Can we trust them to muster the level of commitment and vigilance such an impactful law demands? I have looked at other bills that have been passed and they lack both depth and seriousness and some of them are filled with avoidable inconsistences, as if the drafters were reached and compromised by those who do not wish this country well.

It is very depressing that Nigeria remains the global poster child for the resource curse and our leaders are completely impervious to its implications to our national life. As the uncertainty in our oil and gas industry persists, oil thirsty investors continue to move to other parts of Africa with new discoveries and a predictable legal and regulatory atmosphere. History is beckoning on President Jonathan. He should assign a minister with minimal baggage to lead the oil and gas reforms and immediately loosen the executive grip on NNPC, if he wants Nigerians to take him and his reform seriously. The current executive-legislative disharmony must thaw as both arms of government unite around issues of urgent national importance such as this PIB. Our parliamentarians yet have another golden opportunity to restore their battered image before the citizens by prioritising national interest above primordial antics and sincerely delivering to us a Petroleum Industry Act that will comprehensively reform the sector and move our nation forward. They must seize it. The other option of course, is to continue the unfortunate perambulation.

Uche Igwe is a governance expert at the Institute of Development Studies, University of Sussex. He can be reached on ucheigwe@gmail.com

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