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