Business
Reforming Nigeria’s Oil And Gas Sector
Nigeria’s oil and gas in
dustry received a boost with the commencement of production at the moribund Port Harcourt and Warri Refineries recently. To Nigerians and all users of petroleum products, it is a great cause for joy. The reason for this is not far-fetched because as a major player in the global oil market by the virtue of natural crude endowment, it is ironical that the country has for long not only been an importer of petroleum products, but also, experiences acute shortage on a constant basis.
Due to the heavy dependence on the importation of petroleum products to augments local production, marketers and cabal have exploited the situation to perpetrate massive fraud as shown by the subsidy fraud imbroglio. They also hold the nation to ransom by withholding products from the market at will.
To address the ugly situation, it has been suggested over the years that local refining of the crude oil and reformation of the sector is most sustainable option. There were also calls for the revival of the country’s four refineries, although their combined capacity is far below the daily oil requirements, just as the demand for the involvement of the private investors in establishing refineries on this, the Department of Petroleum Resources( DPR) had issued a number of licences to various companies over the last 10 years, but no noticeable privately-owned refinery is operational in the country as it stands now.
Recently, the Independent Marketers branch of the National Union Of Petroleum and Natural Gas Workers(NUPEN) called for total reform of the oil and gas sector in the country to address the corruption that was impending the growth of the sector. The national chairman of the body, Mr. Ogbodo Thompson, during its 3rd quadrennial conference in Benin said “ President Buhari must be cautious of the ‘racket’ and those who had formed themselves into ‘cabals’ in the sector in order to achieve maximum result. There must be total reform in the oil and gas sector.”
The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) on its part urged the Federal Government to demonstrate commitment to stimulating local refining of crude oil in 2015. The general secretary, Mr. Bayo Olowoshile, in a chat with newsmen in Lagos said that only domestic refining would end crises in the oil and gas sector, adding that the government should cut the rate of importation of petroleum products by 50 per cent and make job creation and manpower utilisation its priority, especially at this time when crime rate has increased.
According to Olowoshile, a slice in importations of petroleum products would not only stabilise the economy but also create millions of job to unemployed youths in the country, pointing out that importation of finished products into the country was a ‘canker worm’ that had left many Nigerians jobless.
In what seems to be a major reform of the oil and gas sector, President Muhammadu Buhari has dissolved and reconstituted the board of the Nigerian National Petroleum Corporation(NNPC) and also sacked the Group Managing Director(GMD) and replaced him with Dr. Emmanuel Kachikwu. The President went further to remove eight Group Executive Directors (GEDS) of the state oil monopoly.
He went ahead to reduce the directorates of the corporation from eight to four, while putting in place new ones and their Executive Directors. Traditionally, most of their successive GMDS had always emerged out of one of the four GEDS, but President Buhari decided to pick a lawyer, who has traversed the oil and gas value-chain and who is seen as a ‘no-nonsense’ industry operator who can drive the process of repositioning the NNPC to become a truly national oil company with business orientation.
Apart from the allegation of institutional corruption rocking the NNPC, there has been lingering scarcity and fuel queue in some parts of the country, which call for a total overhauling of the oil and gas sector. there is speculation of Buhari’s intention to take the better option between selling off the ailing but recently refurbished three refineries owned by the country and maintaining them by the states. All these are in the move by Buhari to chart a new path for the NNPC and the oil and gas sector.
Nigerians will be happy if President Buhari can fashion out the best policy option for the refineries and make the importation of petroleum products a thing of the past. Fuel importation cannot, and is not sustainable, hence the urgent need for government to find a lasting solution to the problem. The long term solution depends on increasing local refineries and building new ones either by the government or by the private investors, who already have been issued licences.
The task before the new NNPC’s GMD and the GEDs is enormous as they are expected to guide the government on the best policy option for our country. The new NNPC boss Dr.Kachikwu is expected to break the ground for the strong foundation in the reformation journey of the corporation and the oil and gas industry as well as evolve a new and visible deal for the Pipeline and Products Marketing Company (PPMC), empower the DPR to carry out its primary function of regulating the oil and gas industry.
According to an expert at the Emarald Energy Institute at the University of Port Harcourt, Professor Ilewumi Iledare, the new NNPC helmsman should uphold transparency and accountability as well as cultivate the spirit of team work with the GEDs and other top management members of the corporation. “The repositioning of the NNPC is very germane and one that must be done with outmost care and precision”, he said.
In fact, the NNPC and our oil and gas industry must be made to operate like all other national oil companies existing parts of the globe.
Another huge problem in the oil and gas sector is that of infrastructure since setting up a refinery comes with its peculiar challenges. In actual sense and in most cases, refineries are located outside the city centres where there are shortfall in terms of infrastructural facilities like good roads, constant electricity supply, hospitals, schools, water, among others. These are essential to support the social and economic needs of the refineries and their host communities.
One critical area is that the government has to help the licenced operators of refineries in financing as well as grant them generous waivers for the importation of needed materials and equipment for their projects.
While thorough investigations are being carried out on the various allegations of corruption in the oil and gas sector to propel growth of the nation’s economy, it is pertinent to advise the government to strive to achieve the needed change in the sector.
Indeed, Buhari’s intention to reposition the oil and gas sector and unbundled the NNPC is quite commendable. During the president’s visit to the American President, Barak Obama, Buhari described the NNPC as access pool of corruption and fraud sign posted by the non-remission of revenues from oil sale to the Federation Account, stressing that the reform of NNPC would be key in his administration so as to bring sanity to the corporation. It would be recalled that the NNPC was unable to remit #25 trillion in ten years.
The political control of the awarding of drilling and exploration rights in the oil and gas sector is another stinker which must be looked into seriously, which of course, the President has vowed to do. This monopoly must be broken if the whole exercise of reforming the industry must succeed.
As another panacea to the problems plaguing the oil and gas sector, the Ijaw Youth Council (IYC) urged President Buhari to go ahead in his fight against oil thieves in the country, adding that the group would not stand against the president’s moves to curb oil theft and other related activities such as pipelines vandalism.
“We want him to go after the big guns, those merchants who bring big vessels to steal oil. They are the people he should go after”, the IYC said.
As part of measures to check malpractices by petrol depot operators and oil marketers in Nigeria’s downstream operations, the Department of Petroleum Resources (DPR) said it has set up a special task force to monitor product sales in the country. The aim is to directly supervise the sale of premium motor spirit (PMS) or petrol and dual purpose kerosene(DPK) from the depots “to prevent further imposition of hardship on the general public”.
It is also meant to ensure that appropriate pricing of the products is strictly adhered to order, while also checking “the unprincipled activities of the Depot Owners and Major Marketers in this regard.” According to the DPR , the measures become necessary following its discovery of unscrupulous activities of some depot owners and major marketers, who are engaged in selling PMS and DPK to various retailers at prices higher than the official ex-depot price of #77.66k and #34.51k respectively.
The DPR had also resolved to sanction any gas plant that fails to comply with the standard safety guidelines on their activities and operations, and it would soon commence facility audit of licenced plants nationwide to ensure compliance with the statutory provision on plant operations.
Shedie Okpara
Business
NASS Engages Agric Minister On Food Crisis
The National Assembly through its joint committee on Agriculture Production Services and Rural Development has engaged the Minister of Agriculture and Food Security, Senator Abubakar Kyari on an urgent solution to food inflation bedeviling the country.
The committee chaired by Senator Saliu Mustapha (APC Kwara Central), at an interface with the Minister, interrogated him on plans being put in place to arrest high cost of food prices in the country and make it affordable and available to the poor masses.
In his response, the Minister said the Federal Government has commenced distribution of 42,000 metric tonnes of grains to some focal points of state capitals nationwide.
“We have received directive and approval from Mr. President to distribute for immediate impact 42,000 metric tons of assorted grains free of charge to the Nigerian population.
“This was received in mid-February, as we are speaking, we have a record of the distribution being carried out, but I will want to plead with the honorable house and distinguished senators that some of the movements can’t be made public but a lot of states have started receiving their grains.
“We are distributing to state capitals in the first instance as you all are aware of the risk involved in the vandalism of foodstuff so we are working with the office of the national security adviser and other national security agencies.
“Furthermore, 58,500 metric tonnes of milled rice from mega rice millers will also be released into the market for stabilisation”, he said.
Speaking with newsmen shortly after the interactive session, Senator Mustapha expressed satisfaction with the steps being taken by the federal government.
He said: “From our interactive session, we are on the other side of the parliament; we are fully in the picture of what is happening, we are convinced that the steps being taken by the federal government are in the right direction.
“All we did again is to further emphasise on the need for certain things to be done on time, I think from this collaborative approach by the grace of God, Nigerians will have a better feel of the government policy on food security”.
Business
Obj Harps On Cheap Credit, Policy Consistency For Food Production
Nigeria’s former President, Olusegun Obasanjo, has called on the government to provide cheap credit and ensure policy consistency to enable farmers increase food production in the country.
The former President made the call as food inflation and nutrition security concerns grow in Africa’s most populous country.
Obasanjo’s made the call at the 9th Agrofood & Plastprintpack conference in Lagos recently, where he said farmers in the country were yearning for consistency in policy and single-digit interest loans to drive growth in the sector and attain food security.
“Policy sustainability and predictability is what farmers want. It helps them to plan. Availability of finance is also what farmers want. They cannot survive on the double digital interest rate”, Obasanjo, who is also a farmer, said at the conference.
According to him, food and nutrition security start with availability, then affordability by ensuring that everyone who needs food can get it.
He noted that food was one of the major imperatives in life, adding that “there cannot be food without agriculture and agribusiness”.
Obasanjo further stressed the importance of agriculture in changing the fortunes of the economy, with attendant exponential gains by way of earnings, employment, food security and other spin-offs.
He noted that agriculture must be made attractive to the country’s teeming youth population, saying this would address the rising unemployment, worsening insecurity and youth migration through the Mediterranean.
“We have to make agriculture attractive to the youths. We have to think within and outside the box to make it attractive to the youths so they are willing to get their hands dirty and feet wet”, he advised.
He continued that “Part of the security issue is owing to our inability to get them engaged. The need for agro-food and agribusiness is for food security, employment, wealth creation and income generation, particularly foreign exchange”.
Speaking also, Wouter Plom, the ambassador of the Kingdom of the Netherlands, said his country had faced challenges similar to those Nigeria confronts – feeding a growing population with limited resources.
He said as partners with a joint vision, the Netherlands and Nigeria recognise that the agricultural sector was one of the prominent drivers for economic growth.
He noted that the Netherlands has further strengthened its partnership with Nigeria to boost the agriculture sector in three main areas- economic growth, improved diets and youth employment.
The ambassador noted that all the challenges in driving growth through the sector, improving diets and tackling unemployment can be addressed when food production is efficient.
Paul Maerz, Managing Director of Fairtrade Messe, said with more investment in agro-food & plastprintpack solutions, products and technologies, brighter days were ahead for Nigeria’s agriculture.
Business
Abuja Farmers, Others Lose N12bn To Ginger Disease
The Federal Government, has confirmed the outbreak of ginger blight epidemic in four States in Nigeria, saying ginger farmers have lost over N12 billion due to the disease.
The government disclosed this at the inauguration of the National Ginger Blight Epidemic Control Taskforce in Abuja, revealing that the fungal disease had inflicted significant damage on ginger farms in Kaduna, Nassarawa Plateau and the Federal Capital Territory.
The Minister of State for Agriculture and Food Security, Aliyu Abdullahi, said the blight had caused billions of naira in losses, impacting not only the livelihoods of farmers, but also Nigeria’s position as the world’s second-largest ginger producer.
“Our preliminary estimates suggested that affected farmers in southern Kaduna lost over N12bn.
“Furthermore, considering that over 85 per cent of Nigeria’s ginger cultivation occurs in this region, we can safely assume a substantial loss of cultivated land, potentially exceeding 70 per cent of total land”, he stated.
Abdullahi, however, stated that the Federal Government through the National Agricultural Development Fund would launch a N1.6bn recovery package for affected farmers in ginger-producing areas.
He said the ginger blight epidemic served as a stark reminder of the importance of preparedness in safeguarding agricultural resources, adding that by investing in research, extension services and farmer support systems, “we can build a more sustainable future for our agricultural sector”.
On his part, the Chairman of the task force committee, Abubakar Abdullahi, said there was no doubt that the blight on ginger had negatively affected the Gross Domestic Product earnings from this subsector.
“It is of necessity and great urgency that various subcommittees are put in place to forestall these negative effects”, he stated.
Abdullahi assured the minister of the commitment of the team to salvage the situation, as he pleaded with the minister to give the committee the power to co-opt members that would add value to the task force to discharge their duties efficiently and effectively.
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