Against the backdrop of federal government’s renewed interest in the oil sector, Bart Nwibe, an engineer, speaks with Special Correspondent, OKEY MADUFORO, on the current re-organisation in Nigerian National Petroleum Corporation (NNPC) and what the country stands to gain from the exercise.
Reorganising the NNPC
This is a welcome development for the oil and gas industry. It will certainly improve the business environment by enthroning a transparent process and will also instil accountability in the system. We all know that the corporate image of the NNPC in the last 10 years or so has been at its lowest ebb. As a matter of urgency, there is the need to re-position NNPC in order to make it a profit-making organisation. I believe the probe or re-organisation is the beginning of the process of making NNPC a better company.
NNPC, as a result of political interference and misplacement of priorities, lost track. In the process, square pegs were put in round holes.
People got to positions and appointments that they did not deserve. When you look at most of the appointments, they were more of jobs to settle political loyalists. Also, NNPC witnessed a lot of government interference, to the extent that policies became issues to score political point to the detriment of the corporation and, by extension, the economy. We also had a high level of inefficiency in the system.
New appointments in the corporation
You can agree with me that the change of guard and new appointments in that sector have been long overdue. Like I said before, some of those previous appointments were politically-motivated. It is necessary that tested professionals are brought in to re-position the corporation. And after that, the management of NNPC should be allowed to run the company, unlike what happened in the immediate past where approvals were so cumbersome that some bids for critical services sometimes took over three years to get final approval.
With the appointment of the new Group Managing Director (GMD), Dr. Ibe Kachukwu, it is hoped that he would bring his huge experience into the system and also fast-track the reorganisation as well as fine-tune the business processes of the NNPC. The GMD is very experienced and understands the workings of the oil sector, and I believe that he would bring his background to positively impact on the strategic business culture of the NNPC. This would go a long way in replicating the success stories that we see in other national oil companies as in Saudi Arabia and Venezuela.
Refined and transparent processes will eliminate cronyism and attendant corruption which had eaten deep into the fabrics of the establishment. We are all aware that the NNPC is one of the most important arms of the Nigerian economy, and this reorganisation would certainly improve the country’s economy.
A good example would be the increase we shall derive in our foreign exchange earnings in the area of oil and gas which had not been encouraging in the immediate past, despite the unprecedented boom we saw in the industry. All
Nigerians should pray that the new GMD succeeds, as the failure of NNPC would mean the failure of the Nigerian economy.
State of the refineries
If our refineries are working in full capacity, the issue of subsidy will not come into the picture at all. And if we do not spend so much to import refined petroleum products, the pressure on the naira will be less. So, as the NNPC re-organisation is ongoing, it will be necessary for the refining business unit to sit up and be alive to its business responsibilities. They should develop plans to add additional modules to the existing units of the refineries to increase their refining capacities.
All the refinery turn-around maintenance (TAM) should be handled by proper and fit engineering companies. Whoever that runs the refinery should have the responsibility of awarding the contracts necessary to keep the plants running. You can’t maintain efficiency when someone in Abuja must approve for a welding repair to be done on a critical equipment. I am not saying that there should be no control or checks and balances; I am proposing that the people managing the refineries should be given greater freedom to make decisions to ensure that the refinery is not shut down for lack of spares or repair of critical equipment because approval from Abuja is delayed.
Offshore refining and oil block allocation
The idea of shipping crude offshore for refining and the process of oil blocks awards is shrouded in secrecy, and this is a possible source of corruption. These processes must be transparent and auditable. We do not need to guess or we shall end up believing what we hear from the grapevines and what we read in social media.
It is a pity that core oil and gas professionals do not get these opportunities in Nigeria. Strangers, who do not have passion for the business, get these opportunities, and at the end, they only use the easy money to fly in private jets. At the end, critical investments in exploration and increase in reserves are not made. This distortion is detrimental to the oil and gas businesses and ultimately to the disadvantage of our economy. I support a wholesome probe of these allocations and awards. All those found culpable as a result of these corrupt practices should face the law, to serve as a deterrent to future practitioners. Cases of inefficiency need to be investigated and processes put in place to nip re-occurrence in the bud.
Mr. President, you know, is not new to the oil sector. He had been a Minister for Petroleum, served as Chairman of the then Petroleum Trust Fund (PTF). So, he is at home with what he is doing. President Buhari is a strong-willed person and a stickler to discipline and due process. So, what he is doing is good for the country’s economy at large.
Fear of vendetta
I disagree with those who claim that the probe in the oil sector is aimed at witch-hunting enemies and political opponents. You do not expect him to jump into conclusions that all is well and at the end Nigerians would turn around to accuse him of non-performance. Nigerians know that Mr. President has integrity. It only needs such a man to turn things around. So, those that are going to work with him would certainly work and serve with commitment, being mindful of the fact that the man at the helm of affairs would not take kindly to compromising standards. The fear would also make them sit up at all times. Those who see it as witch-hunt must have skeleton in their cupboards and they are afraid of being exposed.
A lot of impunity took place in the past, and President Buhari is here to redress the matter. If you do not have anything to hide, why are you afraid? I also do not believe that he is going to spend the entire four years carrying out probes on all sectors of the economy. The probe, when concluded, would even correct some of those gray areas and his job would have been half done.
Nigeria and over-dependence on oil
I do not call it over-dependence. In life, you must depend on what you have in abundance. Some people talk about the agriculture sector. I welcome the idea of diversifying our economy. But this is easier said than done. Investing in agriculture is good for our economy. But it is easier for Nigeria to reap from her so much investments in oil and gas, and these benefits can be used to develop the agriculture sector.
Developing the agriculture sector of the economy will take time.