By Olelere Ayoka
In Nigeria, everybody claims to be an authority on oil matters. That is quite understandable given that petroleum is the live wire of the Nigerian economy. It is good that Nigerians take interest in the single product that keeps the nation going and makes her the economic and financial behemoth she is on the African continent.
But Steve Osuji’s article in The Nation newspaper of October 7, 2014 entitled ‘Fuel importation: Diezani’s dubious prognosis’ cannot be seen as one of those expressions of genuine concern for the sector.
Instead, it follows a pattern of tirade against the minister of petroleum resources, Mrs Diezani Alison-Madueke at any given time by people who have made up their minds not to see anything good in the management of petroleum ministry and the Nigerian oil sector generally.
Steve Osuji’s piece is a dubious analysis and gross misinterpretation of the speech that was read on behalf of the minister at the eight edition of the Oil, Trading and Logistics (African Downstream) Expo held in Lagos on October 28.
In the speech, Mrs Alison-Madueke had, after taking a wholistic view of the present state of oil industry in Africa, stated that it would take 20 years for Africa, not just Nigeria, to get out of the woods of fuel importation. And she backed up her assertion with facts and figures.
According to her, plans to build more refineries in Angola, Uganda, Mozambique and Nigeria cannot change the situation.
“Notwithstanding the possibility of building new refineries in Africa, including new projects in Angola (Sonaref refinery); Uganda (Uganda oil refinery); Mozambique (Nacala refinery); and Nigeria, among others, Africa will remain a net importer of petroleum products for at least 20 years to come,” she said.
She had pointed out that Nigeria was already on the path to adding more capacity by 2020 through the proposed private refineries by the DangoteGroup and Orient among others. She also said that sub-Saharan Africa was the least sophisticated refining centre in the world.
The minister said, “In fact, there are only 24 fuel refineries within the region, with a total refining capacity of 1.6 million barrels per day for a population that is close to a billion. Population growth means more energy consumption.
“However, the uncompetitive and inefficient nature of many of these refineries, combined with the difficulty in funding major upgrades, or new capacity, seems likely to keep the average utilisation at a low level in the short term.
“The implication of population growth for Africa is that demand for petroleum products will continue to be on the rise without commensurate refining capacity addition. There is an urgent need to encourage investors to partner with national oil companies or privately to build more refineries, and for us to be less dependent on imports.”
On petroleum products subsidies, Mrs. Alison-Madueke said the stunted growth of the downstream sector was attributable to the distortion introduced to the market as a direct result of the regulated regime in some sub-Saharan African countries, adding, “There is a need to eliminate this convoluted price subsidy and stimulate competition across the value chain.”
The issue of subsidy, the minister explained to the audience, could not be over flogged, as the World Bank had said subsidy on petroleum products in Nigeria and other oil-producing African countries would be unsustainable in the medium term.
From the foregoing one is at a loss as to why Osuji should use very uncouth and derogatory language on the minister.
Steve Osuji wrote: “If we overlook the poor, poor speech, recall that oil minister has been in government as a federal cabinet member since 2007. The staccato illogicality of her speech is all the more troubling considering the fact that she had been in charge of Nigeria’s oil and gas assets for more than four years running. Particularly notable is that she has been perhaps the most powerful in the history of that office and she could have leveraged that to towering legacies were she imbued with any nobility of purpose or vision.
“Were she not of a lowly composition, were she not more adept at engaging in ignoble monkey businesses and draping herself with an incubus of scandals since her first day in office, she might have recorded some landmark achievements by now.”
Knowing Steve Osuji too well it will be difficult to say that he does not understand the words he elected to use in his article but one is at a loss here. How is the minister’s speech, as copiously quoted above, illogical? And how is the minister of lowly composition?
Furthermore, he could not cite one example of “an incubus of scandals” to buttress his argument in that regard. Osuji has indeed done a very poor job for his paymasters. It is a pity that a man of his standing has reduced himself to such a pitiful level.
This is not the avenue to recount the minister’s achievements but since Steve Osuji alluded to the fact that Mrs Alison-Madueke has no record to her credit with regard to performance, a little education for him is necessary.
In the upstream sector of the oil industry there has been a sustenance of the 2.4 mbpd crude oil production, increase in gas production from 6.3 to 7.8 billion cubic feet per day and decrease in gas flare to less than 11% compared to 30% previously as well as the initiative to grow the National Oil Company, Nigerian Petroleum Development Company, NPDC, to a medium size oil and gas company.
This has actually re-positioned NPDC as a dominant gas supplier to the domestic market with over 450 mmscfd in the Western Niger Delta. There has also being the completion and supply of 65 mmscfd from the OredoIntegrated Gas Handling Facility, IGHF into the gas network in 2012.
On gas to power, the April 2012, 12-month Emergency Gas Supply Plan has contributed over 230 mmscfd for power generation and increased national power generating capacity by 30% to 4.2GW of power.
In addition, gas sales rose by more than 70% to an average of 4 billion standard cubic feet per day and for the first time, industry supplied more domestic gas than was consumed by the power and industrial sectors. Power generation has been increased by additional 40% to 6.0GW through the addition of 450 mmscfd gas supply.
In the downstream sub-sector, efficiency of the refineries and petrochemical plants is being enhanced through human capacity development and establishment of best operating and maintenance practices.
Despite the challenges of pipeline vandalism, the NNPC has embarked on aggressive revamp of vital pipeline arteries and depots to enhance product supply and distribution.
But the minister’s greatest contribution to the Nigerian oil industry is in the area of local content development. For this an agency, the Nigerian Content Development and Monitoring Board (NCDMB) was established four years ago. The idea behind this is to make Nigerians to be actively involved in the operation of the sector instead of foreigners controlling all aspects of the industry. So much has been achieved in this regard even though the final destination has not been reached. It is a gradual process but the journey has begun.
In July this year, the federal government unveiled new projects that would cost $500 million for the development of Nigerian Content in the oil and gas sector of the economy.
The projects that are being funded from the $500 million include key initiatives of NCDMB that would benefit Nigerians directly. Among them are the pilot pipe mill being developed at Polaku, Bayelsa State, the Oil and Gas Industrial Park development in Utuoke, also in Bayelsa State, artisanal training programme being organized by the NCDMB in conjunction with the Federal University, Utuoke, among others.
The pilot pipe mill project, which is expected to be completed before the end of 2015, will cost $200m. The project when completed will create 1,000 direct jobs and 10,000 indirect jobs.
The Oil and Gas Industrial Park as another major development, which is another component of the Local Content initiative will create over 50,000 jobs when completed. It will cost $100m.
An account of what Mrs Alison-Madueke has done in the last few years as minister cannot be exhausted here but no matter what she does the likes of Steve Osuji will not be impressed.
He writes for a medium owned and promoted by people who are not only opposed to the government but behave as if they are perpetually at war with the Nigerian people. People with that mindset cannot be educated. That is the case of Steve Osuji and his likes.
*Ayoka is a management consultant based in Lagos
