Why Kaduna refinery is not fit for Nigeria’s oil, by Egbogah
• Says TSA right step towards transparency, fiscal discipline
• ‘How I was ‘arrested’ from Canada to draft PIB’
• ‘ Petroleum Industry Bill must be reworked’
• ‘Why I rejected Obasanjo, Yar’Adua’s ministerial offers’
Dr. Emmanuel Egbogah, who has varied experience and earned a reputation as ‘Mr. Fix’ in the global oil and gas industry, for his pioneering work in Venezuela, Brazil and Canada, was co-opted by former President Olusegun Obasanjo to draft the foremost version of the Petroleum Industry Bill (PIB) together with former minister for petroleum resources, late Dr. Rilwan Lukman. In this interview with the News Editor, MARCEL MBAMALU, he speaks on the bastardisation of the PIB, the Treasury Single Account (TSA), his journey into government circles and the battered state of Nigeria’s refineries.
With regards to the downstream sector, aren’t you worried that Nigeria imports petroleum products even as it produces and sells` crude oil?
I am more worried than any other person. It is a shame that Nigeria, the sixth largest exporter of oil and the tenth largest reserve owner in the world, is importing its petroleum product. We have four refineries that don’t work. It is not made to work by those who have special interests.
What special interest?
If people, who craft offshore oil refining allocation, don’t benefit from it, they will let the oil industry grow. There are so many problems. I believe that Nigeria’s refineries, even at the best of conditions, cannot work satisfactorily, particularly, that of Kaduna. I have visited the facility when I was adviser for assessment and my conclusion was that there was no point putting money there.
At that time, I was pioneering building a new refinery in Nigeria. I went to India and took with me two ministers, one for gas, and the other for oil.
We visited the best functioning refinery in the world in Jamnagar, India. It produces at 1.2 million barrels per day. It is like a university campus and I wanted to bring the people here to build us one.
I made my case to Yar’Adua. I told him the subsidy we are paying was more than enough to construct this refinery that will produce 600,000 barrels per day. I said, count the Kaduna refinery out; count it out because it is so obsolete, so bad that there is no way it will ever produce oil. Even today, I don’t care what they tell you, it can never function properly; it is impossible.
What exactly makes it impossible?
It is an analogue refinery.
Different from Warri and Port Harcourt plants?
For Warri and Port Harcourt facilities, I can put my money on them when they are properly rehabilitated, not the Turn Around Maintenance (TAM) they do every day and nothing works. They need to be rehabilitated but the authorities are wasting money. The TAM was awarded to people on political bases; it is not awarded to a company that does refineries. It is awarded to a party man, whose company is still doing the maintenance till today.
Maintenance for all of the refineries?
Yes. And we have seen the outcome. Money has been sunk into the TAM, but till today, what result have we got? Nothing. That is because they are not the right ones to maintain them; the people who built it, were asked to come and maintain it. But government complained that the cost was too high, therefore they didn’t award it to them.
When you buy something because it is cheap, it is the most expensive because you find out that it doesn’t serve the purpose.
Therefore, the money is wasted. That is what we are experiencing with the refineries. I suggest that we build a new refinery or put our money into rehabilitating the ones in Port Harcourt and Warri. That’s all.
I am only happy now that Dangote is building a refinery, which government ought to build. He has taken over, and that is okay. Government is giving him a lot of concession. He will fill a gap, which government has failed to address, because his refinery is big. He is a wizard, and by the time his refinery is completed, Nigeria will be back to real life, because we have suffered from the mess and corruption of exporting oil. For example, about 445,000 barrels of crude is allocated to the NNPC. They sell half of it and send the remainder to refineries. They cannot even send the oil because of pipeline vandalism and other issues.
If I get into any position, I will suggest that we stop giving crude to NNPC.
We should give it instead to the refineries if they are working. If they operate on 20 per cent capacity, we should give them all that is required to enable them do that. We shouldn’t be giving NNPC half of our national production, which they trade in the market and tell us it was swapped. A right-thinking person should ask why we allocate 445,000 barrels per day to refineries when they cannot process 1000bpd?
We should give them just that which they can refine and the rest will go into our national treasury. You can see that things are so complex to understand the depth of corruption. This is one glaring example of those things.
Besides Dangote, government gave out licences for more refineries; what do you think hinders the others from making as much progress as their contemporary in the private sector?
Seven years back, 18 licences were granted to people, who said they want to build refineries; those licences where granted on the basis that those people who want to build refineries would get crude allocations. All those efforts were to get crude.
But the promoters of the private refineries would have to complete their plants before they could get crude?
Yes. at that time, indigenous operators were given some encouragement; some of them were given some crude to help them grow. So, people rushed to apply so that they could get this crude allocation and they were never going to build any refineries. Many of them got, but it just happened that it was the time Obasanjo said people must build refineries before they got allocations. With that many of them walked away.
But part of the argument was that the price for PMS was not favourable for local production and that they could not compete favourably in the market with a subsidy regime?
That was a secondary reason. It is also a good reason because there was control here, and that’s why we were going to deregulate. Obasanjo consulted me on the concept of deregulation. I was in the hotel, when he sent Funsho Kupolokun to consult with me on what we should do on the policy? I agreed that we should deregulate because it is akin to untying the hands in our oil resource business.
It is a matter of supply and demand. We supply oil to the international market and trade by the international price. And the price at the other end, that is, the refined product, will be fixed locally. Anybody, who runs such a business, will not make any money, because he is not allowed to ride on the proper demands and supply. The prices are not the same; one is restricted, the other one is not.
But Dangote’s success defeats that argument; he is building despite the pricing regime and every other thing?
That is correct. When he finishes building the plant, he is not going to be selling the oil at government-controlled rate?
Then he would be out of business?
He won’t be out of market,
His price may even be less than government-controlled rate because it would be dictated by the world price. If the price of petrol in Nigeria were derived from the rate at the global oil market, it would have gone down. Dangote is going to disrupt that arrangement. Petrol pump price is supposed to go up and down depending on the rate, but when you see that the rate at the source is not controlled, and the product is controlled, there would always be problems.
With Dangote’s success and the huge cost of TAM, do you subscribe to that idea of not selling the refineries, bearing in mind that it was first sold by the Obasanjo regime but had to be retaken by the Yar’Adua’s administration?
Holding on to the refineries, is not a wise decision for the government.
In fact, my concern is who is going to buy it? Because I will not buy it, it is easier and cheaper for me to build a new refinery than to buy the Kaduna refinery. I am absolutely sure about that. Government would be lucky if it gets people who would buy it and then spend a lot of money to bring it up.
If they government) put it up for sale today, I don’t think a serious businessman would buy it. I have helped government in many ways; I have gone to India to bring people in the business to come and assess those refineries and see what can be done to bring them back to life. They came here and people blocked them; they were not allowed to do anything. So, again, that is corruption.
When was this?
That is just two years ago. I wanted to bring some people to help rebuild the refineries in Nigeria. We wanted to know what is to be done. A private sector operator contacted me and I led him to India. He believed that I knew how to do these things and that if it was China or India; we would go and talk to them. He said he would come behind me and I would talk to the people so that they could listen to what we had to say. That is what we did; but people blocked them here in Nigeria. These people, who have greater interest for things not working than for them to work, would have no room for all these hanky-panky if we get things right.
So it would be in the best interest of the government to sell the refineries?
Government should scrap the Kaduna refinery and build a new one. There are many bad features of the Kaduna refinery, which are never talked about. The refinery is not very good for refining Nigerian crude oil. We have to import oil from Venezuela. It is built to refine heavier type of oil. We have very little heavy crude, but nobody ever talks about it and it amazes me.
But Warri refinery can do light crude?
Port Harcourt, Warri refineries are okay. But that of Kaduna is a problem. First, it is too old, and operates an analogue type of system. What we have today is digital. Others are not entirely digital systems, but I am saying that of Kaduna, in particular, is not. If you go there, you’ll see it. To try to fix or repair analogue system of the 1970s is not right.
It is what I found on the ground. I don’t know why it is different. But, certainly, the Warri and Port Harcourt refineries are much more manageable. That was what Shell was actually doing, before we took over from them. It was very well done, but for Kaduna refinery, the fact is how can you build a refinery here and it won’t be able to refine our own crude? These are some of the issues there.
What are the major impacts of the Treasury Single Account (TSA) on Nigeria’s public finance management?
In line with the commitment to ensure discipline and greater transparency in the management of the nation’s finances President Muhammadu Buhari directed all ministries, departments and agencies of government (MDAs) to, henceforth, pay their earnings into a unified bank account, the TSA. The directive applies to MDAs funded from the federation account such as the Nigerian National Petroleum Corporation (NNPC), Central bank of Nigeria (CBN), Security and Exchange Commission (SEC), Nigerian Port Authority, Nigerian Custom Service, Nigerian Immigration Service, Federal Inland Revenue Service (FIRS) and a host of others.
These MDAs have to pay all their revenues to a sub-account that is linked to the TSA at the CBN. This is very good because, for the first time, it will give government what you may call a helicopter view of things — one single look at what the country’s financial situation is at any point in time. To promote quick compliance with this directive by government, the former Head of Service of the Federation, Danladi Kifasi, gave out the number of the account as 300002095. This is so that anybody in the country can know what is in this account at anytime.
Yes, anybody. This is what we mean when we talk about transparency and openness, because you can interrogate this account anytime as a citizen of Nigeria. The other side of the TSA policy, which came into effect on August 11, marks the beginning of MDAs retirement of revenues that is due to the Federal Government into a unified account maintained by the CBN.
The payment of government revenue into multiple bank accounts operated by MDAs in commercial banks as obtained in the old order was clearly against the Nigerian constitution, which, in sections 80 and 162, directed that all federally collected revenue be paid into the Federation Account. So, it is not something new; it has always been there but it was not obeyed or observed.
When we talk about corruption, people don’t know the meaning or the extent of the decay in the country. This is part of corruption, because not obeying this order and putting money into different hidden accounts constitute high level of corruption. Not doing this — remitting funds to the TSA — is a breach of the constitution. That underscores the rot in the management of the country’s finances.
However, I must say that it was President Goodluck Jonathan that actually brought back the issue. The TSA as a policy was reportedly first recommended by the Federal Government Economic Reforms in 2004 but was dumped in 2005 following intense questioning from the banking industry. The industry, which benefited most by MDAs and states dumping their money in their accounts, actually helped to frustrate the effort.
President Jonathan’s administration had also set a February 2015 deadline for the implementation of the policy, but the weakness of the administration and the pressure it was undergoing before the election did not allow the policy to gain a footing.
We hope that this policy will greatly improve the management of government revenue. If it is properly implemented, it will pave way for timely payment and capturing of all revenue going into government treasury without the intermediation of multiple banking arrangements.
Besides, the system will likely reduce the mismanagement of public funds by revenue-generating agencies. For example, the NNPC, it is reported, have never remitted their money. They say they were entitled to deduct at a point before any payment, but that was against the law, because sections 80 and 162 of the Constitution directed that they must remit the monies first. So, what reason did anybody have not to do that?
Previous governments have allowed this non-implementation, thereby leaving loopholes for corruption. We hope that, this time around, it is going to be implemented because we know that the present president is a man of steel.
The measure is expected to help check excess liquidity, inflation, high interest rates, round-tripping of government deposits, and the sliding value of the Naira; we will accomplish a lot of things. When a system is organised and is working according to the law, value increases, the recognition of the naira increases and its value will increase.
I can assure you that when the policy takes full effect, the exchange rate will not be N200 to $1. It will begin to come down, because people will begin to see stability in currency management. The fact that we have never had the discipline to manage our resources in this way is one of the reasons the Naira does not add but continues to decrease in value. Once it is recognised by the international community, properly managed and organised, we will see that the correct foundation has been laid.
What, in your opinion, were the banks going to lose materially in 2005 when, according to you, they frustrated the effort to implement the TSA?
Banks stand to lose a great deal because most of these funds that are not being paid into the Federation Account were being paid into banks. And the multiple accounts that were opened allowed them to do all sort of deals.
Funds in many of these accounts were never retrieved because government did not know where the money was. When we say someone did not remit N9.6 billion to the Federation Account, the money is not hanging in the air; it is in the banks. When a Governor or a Minister, for instance, steals some amount, where is the fund lodged? It is in banks, which help them to steal and hide.
In fact, why does a company need to have 10 accounts in one bank? It is just to stash money away, and many of these accounts are never activated in favour of government; they are forgotten. So it becomes the property of the depositor and the banks.
It is argued that TSA implementation does not entail that the funds will be deposited directly with the CBN, they will still have to pass through commercial banks; what roles do you see the banks playing in all of these?
The money will pass through commercial banks but they are under a microscope. It is only passing through; it is not being deposited there. That is what is going to happen.
All money must go into this single account managed by the CBN. The central bank is the government’s bank, to manage its resources. That is why it is called central bank; so, everything must go through. Whatever the banks get must be channeled to the account. Therefore, if you know that money has been deposited in a particular bank today and it has not been deposited in the Central Bank, you can check. That is why the number was given out. That is what we mean by openness and transparency. But one couldn’t do that in the past, when you didn’t know where the money was, and who was keeping it.
Would it be fair enough to say that corruption is the single factor that drives operation of multiples accounts by public officials; are there no other legitimate compelling circumstances, where there could be need to create special accounts, like the controversial Excess Crude Account?
It is the governors that say the Excess Crude Account is unconstitutional because they want money to share. How can it be unconstitutional when you are trying to take care of citizens of your state? The role of government is to take care of citizens, to provide for them today not allow it to go through the normal channel? They (the governors) don’t want the money to be saved; they say ‘we need it now.’ If you prepare for your children’s future, how can anybody say that is bad parenting? It is an obligation you owe your children.
But there are rules and procedures guiding the implementation of fiscal policies, in terms of managing funds accruing to the three tiers government and it would appear that Excess Crude Account defies the 1999 Constitution as amended…
It was something new, which government definitely needed to seek the consensus and agreement before it was done. I would agree that they didn’t do so, and that is what is called bad governance.
So it means the governors were right; are you saying so?
The governors were right. The Federal Government was not right. As a matter of fact, the Federal Government was not treating the governors and the local government as partners. It was as if they were saying, ‘whatever we say you take; whatever we give you, you take.’
No, that is not proper governance. And that is the trademark of many of our leaders, who actually are dictators; they do not like to obey the rules.
In fact, they say they are playing according to the Rule of Law, but, in essence, they are not. For example, when we wrote the Petroleum Industry Bill (PIB), I told the president we needed to sell the idea to Nigerians — to our citizens — and I designed what I called a ‘road show,’ to go to all parts of Nigeria to sell this reform agenda.
But the president said, ‘no, we don’t need any of these; we just tell them this is the Bill and they will pass it.’ And you see that till today, the Bill has not been passed because it has not been sold to the people. So, that is the same way our president or leaders or governments perform; they don’t do things in accordance with what is expected of them; they do things by imposing their will on others; that is the status quo.
What were the challenges while serving under a former president, who was also seen to have a heart of steel, if I may use your words?
President Umaru Musa Yar’Adua was a good president. Nigeria didn’t enjoy his tenure because he was brought down by his illness, which constricted his ability to do many good things. He was my boss. And, proudly, I would say he was the first man, who respected me more than anyone else in the world.
He was so overwhelmed by the fact that I agreed to work for him, he wanted me to be the petroleum minister. But I said, “no sir, I don’t do anything political.”
In fact, the story is that former President Obasanjo, who asked Yar’Adua to call me, told him that he was not lucky because I refused to work for him, but that the late president should talk to me and if I agreed to be in his team, he could go home and sleep, knowing that everything would go well in the oil industry.
But you finally worked for him… not as petroleum minister?
Yes, I did. He called me in August of 2007 and told me what my predecessor said and that the country and his administration needed my help. I asked him in what way was I supposed to help and he said he wanted me to serve as Minister for Petroleum and Energy. I told him I could not work as minister. He asked why, and I said it was because I couldn’t take up a political appointment — the same reason I gave Obasanjo.
He said ‘everybody wants to do this kind of thing and you are saying you cannot.’ I said I wouldn’t work as a political appointee because my wife wouldn’t allow me; she believes that it is a political role. She has the impression that, in the past, whenever there was a coup, ministers get killed, and she doesn’t want to be a widow. So, Yar’Adua asked in what capacity I would like to help. I said I would prefer being a technical adviser since I was a consummate technocrat. ‘This is what I know best how to do; I do it without fear and favour.’ He agreed and appointed me his Special Adviser on Petroleum.
He then said he was curious about my decision because I refused to work for his predecessor, but agreed to work for him. I told him that I like to work in an environment of openness and transparency and that though his predecessor was a personal friend, I didn’t think that kind of candidness existed in his time. I said though I didn’t know what obtained in his administration — because we were just starting out— I had an innate feeling that the environment was going to be different. He was happy and said he wished I could write this as a testimonial for him, as it was the greatest accolade he had gotten from anybody.
The man could have done great things for Nigeria, but he had his hand tied to his back because his illness was very serious, and people, who actually never allowed him to do anything, surrounded him. It was what we called the Katsina Mafia; they did things he didn’t want, but because he was so sick, he couldn’t stand up to them. That was why. But I think he was a man that has a lot of goodwill towards Nigeria and for the Nigerian people.
How would you really describe your relationship with Obasanjo now and in the past?
We have a very good relationship. In fact, I am in Nigeria today because of Obasanjo. He brought me back to the country. During one of the Executive Council meetings, he said in all his travels to more than 40 countries, before he became president, in at least 35 of them, a Nigerian’s name was always mentioned as someone that could fix things if he got into the oil industry.
He said people told him that this person was based in Canada. At the council meeting, he mentioned the name and asked if anybody knew the ‘mystery Nigerian.’ Nobody did, except the then governor from Ondo State, Adefarati, who said he had met the person.
In what circumstances did you meet the governor?
At a time, Ondo State was travelling around the world in search of help in developing their bitumen resources. Everywhere they went, from Brazil to Venezuela, the talk was about a certain Nigerian, Dr. Egbogah, who lived in Canada. They were asked to go and meet him, that he would solve their problems because he was extremely recognised, respected and regarded in the oil industry.
The Venezuelans talked about the magic this person did for them and other people. That’s how the governor got to know about me and sent an emissary to get me in Canada. When I got the message, I told him not to come because it was too cold at the time in Canada, but I could come to London to meet with him. We eventually met in London; he told me what they wanted me to do, I agreed and we set to work.
When he was told this story, Obasanjo said since Adefarati was the only one, who had seen and known me, he should go and bring me.
Adefarati called to tell me that the president wanted him to bring me to Nigeria. I asked what crime had I committed that the president would want to arrest me like that. He said it was not an offence but the president wanted to ask a favour from me. So, I told him that they didn’t need to worry because I could come on my own to see the president. So, that is how I met the president.
We discussed but I refused to be Minister. I think that is reason he continues to respect me till today. We are good friends. And Obasanjo brings me to the center of any cerebral work he does.
But that experience connects you more to Obasanjo than to the late Yar’Adua; did you get to work under his (I mean, Obasanjo’s) government n any ‘private’ capacity?
No, I didn’t. But, at that time, I was assisting him. Anything that Obasanjo wanted to do, he would ask his aides to consult me…that he took my opinion as the gospel truth. Obasanjo respects age and knowledge. That is why we remain good friends till today and he respect me. Besides me, I don’t think he has ever met a more courageous individual to tell him to his face that he would not work for him. But I didn’t give him the reasons for my decision.
And he didn’t ask either…
It was a very interesting scenario when we met that morning. It was Audu Ogbeh who actually led me to the meeting and he complained that I didn’t look like a Nigerian because I always wore shirts. Ogbeh gave me the national outfit I wore to meet the president. And Obasanjo said he was glad that I looked like a Nigerian that morning. So, we are good friends and we continue to maintain a healthy relationship.
For instance, during Easter celebrations every year, my wife, Emeka Anyaoku and I spend the night with Obasanjo; it is a fixed meeting every year.
Why is it so?
My wife was born in Abeokuta, when her father was a Postmaster-General, and as such, Obasanjo regards my wife as his daughter. Every time I go to visit him, he will insist that I pay dowry because one does not ever stop paying dowry for an Abeokuta woman for life. So we have a very good relationship. He respects me, and I do likewise, but I don’t agree with a lot of things he did.
One wonders why you did not get a mention in My Watch — Obansanjo’s book; I don’t think your name was there or is it because you are not a politician?
My name wasn’t mentioned, but if you look at his other book, The Obasanjo Years in Government, you would find me among those who wrote the book, because he insisted that I write about his achievements in the Nigerian oil and gas industry.
Why, you might ask? He said it is because I was someone without fear; whatever I wrote would be the truth about him and that I wouldn’t write anything to favour anyone. That was why he chose that I be the one to write on his achievements in the industry. Go and get the book and see for yourself.
Obasanjo was the substantive petroleum minister for almost four years, an idea that appears to have received the blessing of the present administration; what do you make of that idea?
I wouldn’t say that it is entirely right because the president has a lot to oversee. To add a Ministry to his responsibilities, he won’t do justice to both roles. It’s not possible to have a helicopter view of things happening and still guide others in running the country. He wouldn’t work well; there is no way you can give adequate time to both, no matter how best one tries. So, it is not something that I would have promoted.
But former President Obasanjo apparently, did that…
He took the role because that is the most important thing in the country. If you get the oil and gas industry right, you get Nigeria right, because oil provides over 90 per cent of our revenue in this country.
Therefore, it is very important and should be given the most and best attention. If it goes well, other things will be much better than they are. That is why he assumed the position, to direct it personally, like a general leading the direction of his Army.
That’s what he did, but as I said, it takes too much to be done; you have a lot of things to do that cannot allow you give attention to details.
What then would be your advice for the current president?
It is about to happen because the president has said he would assume the position himself, because, as I said, the industry bears huge importance and significance for Nigeria.
President Buhari wants to do it himself. And, as far as I know, he would probably want to give attention to the oil and gas industry from 18 to 24 months or for half of his term before he hands it over to a Minister. He wants to lay a strong foundation for his administration to build upon. I am fully behind him in his decisions.
People are murmuring about him being president for months without ministers and all of that. But the President says the situation is so bad that if you appoint anyone now, the old process will continue. He wants to clean the floor and lay a foundation, not on sand that will be swept away but on a deep-rooted structure, upon which governance will grow. I am fully in support of that.
For the oil sector, he may continue with it, because of its importance and significance. And after 18 months to two years, he would turn it over, believing that he has laid the foundation upon which it would grow.
What would you say is the major challenge for the sector now?
I think you cannot say just one thing is bad. The oil industry has not grown, developed in the right way in the country. When we discovered oil, foreign companies wrote the rules on how to operate the industry. We knew nothing about oil at the time. We simply took them in and, as time went by, we found out that this is not the way to do things, because, looking at what other people are doing, we needed to change the way we do things. And a lot of the things we had done and the steps we took had not been in the right direction from the setup to when we joined the Organisation of Oil Exporting countries (OPEC).
There is a condition that you must setup a national oil company and work with the international oil companies to limit exploitation. Your people should be major participants in the development of the oil and gas industry. You should be in control of the major stakes in the assets.
But we didn’t setup the NNPC the right way. We made it a government agency, which is involved in policy-making, regulation, commercial services and all, everything rolled into one. And today, none of these things is done properly, correctly.
That is why NNPC has grown to be a sorry case of rot and corruption. Nothing goes well because people, who have diverse interests, are directing it. That is where the problem is, and that is why Obasanjo himself, in his wisdom, said we needed to reform the oil and gas industry. The reforms started in 2000, when he became president.
That was the case until we came in to write the Petroleum Industry Bill (PIB), which is the legal and regulatory framework.
Who were those involved in writing the bill?
Late Dr. Rilwan Lukman, who was the Minister of Petroleum at the time, was the chairman of the Oil and Gas Implementation Committee (OGIC) and I was his deputy. But, in a way, I did all the work because I was the adviser to the president on oil. So, we wrote the PIB, which is the legal and regulatory framework for implementing reforms in the oil and gas industry. This is because we need laws to make certain reforms. The Bill has not been passed till this day because, when we finished writing it, I suggested that we needed to go on a roadshow across the country to sell this reform agenda to people. It was not done, and that is why the thing has remained in the National Assembly.
But many think that oil and gas multinational companies are part of the problem as they do not want the bill to sail through?
Remember that oil and gas companies in the country are businesses set up to make money. If you go blind, they don’t care. What they want is to just take what they want and get out of the country before government changes. That is the way they operate. So, you can’t say they are responsible. No, they want things to go well, but they want it in their favour.
The objection is that the fiscal regime was not okay because there are people, who have been taking everything almost for free, and now we want to impose more restrictions on what they can take. That is what they are opposing.
I am on the side of restructuring to have progressive fiscal regime, where it will be a win-win situation. A win for them for being the ones bringing the oil out and a win for us for being the owners.
Were all of those factored into the PIB version you crafted?
There was a problem, in that sense, that it has not been done to their satisfaction. That is what they are objecting to.
The original bill was not passed in the 6th and 7th Assemblies. It was rewritten and I do not agree with it, because they bastardised what we had written and personalised it, and too much authority and discretion has been left with the Minister and the President.
For instance, the President would award oil blocs as he wishes, and the Minister will approve a lot of things as he or she deems fit, which, in a way, brings back the corruption we are trying to avoid. Openness, transparency and accountability, which we were writing against, has now been reintroduced into the system.
What were your specific recommendations, which according to you were bastardised?
I recommended a lot of things; we are talking about a 279-page report.
In terms of who decides what, how do you recommend that the President allocate oil blocs? There are things the President can approve, but cannot have the right to allocate oil blocs at his discretion. This was what was done in the past as a gift, a political gift to party friends and others. That has been the biggest weakness in the industry because there are a lot of people seeking these favours. That is why the industry has not grown.
Go and check who is allocated oil blocs in Nigeria, and why they got it. We are using it for gifts to friends, politicians and parties. We want that removed. In the United States and other places, the President does not have such right to make discretional awards to his friends or whoever. It should not be in the system because it leaves room for high level of corruption.
What they have now has it and that is what I am fighting.
And this was not in what you recommended earlier?
Yes. Few months ago, I gave a talk on what I called The Interrogation of the Petroleum Industry Bill to point out all these things that are not in the Bill and advised against passing it in the present state, and recommending that President Buhari withdraw it so that we would rewrite it and put back the essentials that give it integrity.
We need to make it whole so that it can provide a better future and growth for our industry before it can be given back to the Parliament. The Minister has so many rights of discretion. There are things the Minister must authorise, but not that he or she would decide how much fiscal regime to give to a company. There must be a standard, the same rule for everyone, but not for selective treatment.
One of the most important things in the PIB, which is not going well and I want changed because I pioneered the whole concept, is the issue of giving something back to communities where oil is produced. This was the basis of the Amnesty, which President Yar’Adua granted to the communities in October 28, 2008.
Yar’adua, at the time, said his adviser was a genius, who came up with the concept of sharing the nation’s resources with host communities. What I recommended was that 10 per cent share of revenue should go to host communities. And since they were partners with government, they would protect what is theirs.
With that, there cannot be cases of pipeline vandalism and other things that halted oil production. Because benefits get to these communities, if there are acts of vandalism or anything that will make oil to stop flowing, they will lose for that year. Therefore, they will now have to protect rather than vandalise pipelines. Yar’Adua said he wondered why we didn’t do this before. It is clear that they wouldn’t burst their own pipelines. He said it was a genius concept and that was the basis for granting the Amnesty. That has been bastardised in the PIB, which I must redo for to restore its integrity.
With these issues hovering over the PIB, We are in for another round of bids, what challenges do you see, going forward?
I don’t think so. The bid rounds would come. And right now, government is going through reviews of operation in the country; every company will present their plans. What we have in the PIB is what we call New Encroach Management Process. It states that, if there is any property that has not been operated or action of development for 10 years running, government will say, this is not contributing to our growth and will take it back from whoever owns it. It would put it into the pool so that we can now give it to other people to operate.
That is what we had in the Bill. It is actually necessary for the Bill to be passed before that can be effective.
The new Bill that I will write, if permitted, would definitely do that, such that anything that is not being operated, will be taken back and put in the bag for people to bid for. I believe we need to get the Bill out and rewrite it. In fact, I will not say get it out, because it doesn’t exist; every Bill dies with the Parliament, so it doesn’t exist. We will need to rewrite it and resubmit. And if we are able to lobby the House properly, that is, explain the essence of everything to them, the Bill can be passed in no time at all.
But because they have not been able to understand it at all and with so many things happening, bribery included. In fact, while we are fighting to have it passed, the oil industry is against it. Four years ago, I was indicted and the National Assembly brought me for a trial.
That was the 7th Assembly?
Yes, when they called them in Ghana to resist the passage of the Bill. They brought those senators to Ghana, away from Nigeria. The National Assembly brought me for a trial and when I explained the matter, it just died like that. It was terrible.
How worried are you that the PIB you authored and nurtured has suffered such political battery?
Nigerians do not understood the opportunities the PIB presents to this country. If they do, they will leave their personal desires of little things. What the bill can do for the nation is bigger than what the individuals gain from it.
Are you ready to redraft the PIB?
I wouldn’t redraft, but make changes to what the former minister bastardised. It is not a big task, just small changes needed. If I were happy with the present Bill, I would not be making this plea to the government. I have given the notice to the President on what should happen and I am prepared to step in to do it.