Monday, 02 July 2012 00:00

Written by CHARLES OKONJI

The newly-appointed Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mr. Andrew Laah Yakubu, has fully assumed duty with a pledge to surmount all challenges towards moving the corporation forward. CHARLES OKONJI reports

As Andrew Yakubu, the newly appointed Group Managing Director of the Nigerian National Petroleum  Corporation (NNPC), and other Group Executive Directors assumed office, some oil and gas experts and other stakeholders have asked them to enthrone transparency and accountability not only in the corporation but also in the entire industry.

For these stakeholders, the recent sacking of the former directors of the corporation was not far enough, as it would not tackle the challenges confronting the organisation. Rather, they said there should be total overhaul the NNPC to make it a business model, which would created room for  transparency and accountability in NNPC.

An industry expert said that the appointment of  chief executive of NNPC was in the right
direction, pointing out that the oil and gas industry needed an experienced hand that understood the terrain and the operations of the corporation.

He said that Yakubu’s experience as a former Managing Director of the Warri Refinery made his appointment elating, stressed: “To me, I think the President made the right choice by appointing those that understand the industry. He understands the intrigues of international oil companies, he will sanitise the corporation.”

The President of the Nigerian Association of Petroleum Explorationists (NAPE), Mr. Afe Mayowa, urged Yakubu with his new direcors to strengthen NNPC’s internal structure with a bid to restore confidence to the industry, noting that the sack of Mr Austen Oniwo, the former Group Managing Director of the corporation, was long overdue, as many stakeholders, according to him, had long expected it.

The  Chairman, Lagos Chapter of Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Mr  Folorunsho Oginni, who stated that the sack was not an issue as the President had the right to sack and appoint anybody, said it would not sanitise the sector since those who illegally benefited from the subsidy scam had not been prosecuted.

Oginni said: “What change do you expect the new NNPC boss to make when, in the last five years, more than five people have been appointed to head the corporation. With or without the new NNPC boss we believe that the status quo remains.”

Even though the Managing of NRG Drilling Nigeria Limited, Mr. Charles Nwankwo, differed on this issue, as he said they were not sacked but were retired because they were all due for it, some experts commended the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, for her initiatives to tackle the challenges in the nation’s oil and gas industry.

Particularly too, Nwankwo said: “The Petroleum Minister has been doing a good job. The lady understands the industry. Some people expect President Jonathan to do their bidding in the petroleum industry. We have elected him. We should allow him to do his job. Diezani is doing her job. Maybe she is having problem with them because she is not going to their bid.

“The retirement of the former executive directors of NNPC is to build capacity. Abiye Membere was formerly Managing Director of Nigerian Petroleum Development Company (NPDC), but now he is Group Executive Director (Exploration and Production). This new position will enable him to embrace new challenges and be more effective,” he added.
Executive Chairman of Damagix Nigeria Limited, Alhaji Dahiru Mohammed, said  Alison-Madueke had actually made significant impacts in the industry, especially on the local content drive and making NPDC a centre of attraction in the upstream operation.

Mohammed said: “There are two areas where she has really impressed me. In the local content drive, she has made initiative to be where it is today and it is very commendable. She has also worked hard in bringing out the NPDC, which is the exploration and production arm of the NNPC. Her coming in as the Minister of Petroleum Resources has really made NPDC very active. So, these are the areas I have seen she has made positive impact in the oil and gas industry.”

Malam Abubakar, an analyst and a retired director in the public service, had, when reacting to the clamour for Alison-Madueke’s sack, said that no petroleum ministers, except her,  could be said to push for the removal of fuel subsidy, which has been the bedrock of corruption in the industry, “simply because of their private benefits.”

The previous Petroleum Ministers, according to him, had, over the years, used fuel importation not only to enrich themselves, but also to empower and reward party loyalists, family members and friends, which profoundly hurts Nigerian citizens.

But Alison-Madueke, when she assumed office, vehemently opposed the fuel subsidy and requested for total deregulation of the entire downstream sector, an approach that would have earned her commendation and not condemnation.

Abubakar said: “In other words, it is not in the personal interest of a Petroleum Minister to remove fuel subsidy. For daring to be different Mrs. Alison-Madueke deserves kudos. Looking back over Mrs. Alison-Madueke’s tenure as minister it is easy to see a consistent pattern of trying to solve this problem.

“Even before the issue of subsidy removal came up, she had insisted on getting the original builders of Nigeria’s four refineries to carry out the Turn Around Maintenance (TAM). The reason for choosing the original builders is to end the practice where the refineries fail to work even after TAM has just been done because of the low calibre of the contractors. The original builders of the refineries are world class engineering firms. Therefore, they have a reputation to protect.

“By the time the TAM is concluded within one year, even if there are not enough petroleum products for local consumption from the four refineries which collectively have the capacity to refine 445,000 barrels of crude oil per day, the demand for imported fuel will reduce drastically. This development will have an immediate salutary impact on the country’s expenditure on fuel subsidy and on our foreign exchange reserve, as well as on employment and business opportunities for the Nigerian people.

“But Mrs. Alison-Madueke did not stop there. Because of the problems that had been brewing in PPPRA, last November she inaugurated a new team at the PPPRA with the mandate to clean up the mess. Since then the new PPPRA management has taken some critical steps to sanitise the importation and payment of fuel and their efforts have been highly commended by industry watchers.

“Not even the most dedicated opponent or critic of President Jonathan can fail to acknowledge that his administration has demonstrated impressive courage and selflessness in tackling the challenge of importing and paying for fuel in Nigeria, which has been draining Nigeria’s national treasury for well over 10 years.

“If only previous government officials had displayed such commitment to the common good, the petroleum subsidy issue would have been resolved long ago, or would not have risen at all. The President Jonathan administration has, once again, demonstrated the virtue of placing national service above parochial and personal interest. We are impressed,” he added.

As industry experts set agenda for the new management of NNPC, the National Secretary of Independent Petroleum Marketers Association of Nigeria (IPMAN), Mr Mike Osatuyi, advised Yakubu to retain the good relationship with the association, as it would help to improve the worth of the nation’s petroleum industry.

An oil and gas industry analyst, Zayyad I. Muhammad, disclosed that the nation’s four  refineries were on their knees. While noting that though refineries should be consistently out-performing the average utilization rates of refineries across the globe, the performance of nation’s refineries, he said, had been characterised by very low utilisation and incessant downtime.

According to him, this was due to the fact that they were caught within the ‘crossfire’ of corruption, persistent attacks on pipelines by oil thieves and slow progress in the full-liberalisation of the refining sector of the petroleum industry.

NNPC, he said, had announced that it had commenced discussions with the original builders to carry out a major overhaul of the refineries. Chiyoda would be contracted to handle the rehabilitation of the 110,000 barrel per day Kaduna refinery, Italian firm Saipem would handle the repairs of the 125,000 bpd Warri Refinery, while Japan’s JGC Group, which built the 150,000 bpd New Port Harcourt refinery in 1988, had nominated Tecnimont to take charge of repairs of one of the two refineries in Port Harcourt.

Another industry analyst said that this should be the resolve of the new NNPC’s management,  as inviting the original builders to handle the Turn Around Maintenance (TAM) of the refineries would bring them back to live. Experts noted that the fastest and cheapest way to get more volumes of refined petroleum products into the growing Nigerian market at lower cost was to rehabilitate these existing refineries.

Yakubu was equally urged to keep to the spirit of NNPC’s vision for the local content, which was designed to transform the oil and gas industry into the economic engine for job creation and national growth by developing in-country capacity and indigenous capabilities. In this way a greater proportion of the work would be done in Nigeria with active participation of all sectors of the economy and ultimately Nigeria would be positioned as the hub for service delivery within the West African sub-region and beyond.

The thrust of the local content policy, an industry source said, was to promote a framework that would guarantee active participation of Nigerians in oil and gas activities without compromising standards. The policy, it was gathered, should also focus on the promotion of value addition in Nigeria through the utilisation of local raw materials, products and services in order to stimulate growth of indigenous capacity.

An analyst said that the new management of NNPC should pursue with vigour the NPDC’s vision of being the country’s premier exploration and production firm and the preferred operator. The company has recently been transformed and repositioned to become one of the largest oil and gas companies in Nigeria.

Information gathered revealed that the company and First Hydrocarbon Nigeria (FHN) had signed a Joint Operating Agreement (JOA) to develop, explore and produce crude oil from Oil Mining Lease (OML) 26 located in the oil-rich Niger Delta. The development was to make achieve its target of production of 250, 000 barrels per day by 2015.