For the Nigeria’s oil and energy sector, the year 2017 will remain contentious in the annals of its activities. A cursory look at the sector during the year under review indicates that it went through one of its most challenging moments in the nation’s history.
Apart from the most glaring challenge of contending with the constant rise of the price of crude oil at the international market, the sector faced a lot of internal tussles and schisms on the local stage, with key stakeholders as actors in the evolving conflicts and the Nigerian masses as victims.
The Nigeria National, Petroleum Corporation, (NNPC) was caught in a crisis of interest as the Group Managing Director (GMD) of the corporation, Maikanti Baru and the Minister of State for Petroleum, Dr Ibe Kachikwu, traded blames, accusations and counter-accusations over alleged contract scam and lack of due process in the running of the (NNPC). The conflict of interest in the NNPC dominated the public domain for a while, with shocking revelations of overloaded contract figures and skewed appointment.
The tension was however, subsumed by the Presidency on a note considered by pundits as “partisan compromise” at the disadvantage of the Nigerian masses, who needed proper explanation of the real issues in contention.
Shortly, after the Baru/Kachikwu debacle, came the escalating fuel scarcity across the entire country. In the face of the biting fuel scarcity across the country, the major opposition party, at the centre, the Peoples Democratic Party (PDP), accused the Federal Government of covering up huge sleazes directly involving the ruling All Progressives Congress (APC), especially in the alleged diversion of fund in oil subsidy payouts, resulting in massive fraud in the oil regime.
The PDP, in a press statement said, the Jonathan’s administration ensured a domestic production of 5 million litres out of the 25 million litres daily domestic consumption in the country, but the present administration had failed to make any remarkable impact in the sector.
According to the PDP, the APC paid itself N1.4b daily for fuel importation through the NNPC, which is the sole importer and price moderator in the oil sector.
The development was said to have dimmed the expectations of private importers and market forces to leverage on the scrapping of subsidy and ushering in of a regime of partial deregulation of the downstream sector.
Vice President of Nigeria, Prof Yemi Osinbajo however justified the removal of subsidy saying, “The Central Bank of Nigeria (CBN) did not have enough,” with oil earnings dipping to $550m in April, while the amount required for oil importation alone gulped about $225m.
During the year under review, critical stakeholders affirmed that oil and gas sector in the country went through great turbulence and inflicted panic on Nigerians. Commenting on the fuel crisis in the country, President of the Nigeria Association of Petroleum Explorations (NAPE) faulted the Federal Government’s pegging of the foreign exchange rate and the pump price of petrol.
He pointed out that the lack of flow of foreign exchange, denied private marketers access to fund and called for total removal of subsidy on petroleum. The Depot and Products Marketers Association (DAPPMA), also accused NNPC of denying its members adequate supply and allocation of products, thereby causing the scarcity of petroleum products across the country.
Executive Secretary of DAPPMA Olufemi Adewole, disclosed in a media report that the NNPC and its subsidiaries were into some shady deals which has resulted into acute scarcity of products and inflicted pains on Nigerians. He urged the corporation to ensure adequate supply of products to its members to save Nigerians from further sufferings.
NNPC, however denied the allegations that it denied DAPPMA members and the Independent Petroleum Marketers Association (IPMAN) of the supply of product, especially PMS. The NNPC said members of DAPPMA have taken receipt of products from the Pipeline Products Marketing Company (PPMC) in substantial volumes and currently owed the company N26.7b as at December 21st, 2017.
NNPC further promised to improve on the glaring shortcomings in the supply of products by providing 1.2b litres in January 2018, translating to about 40 million litres per day. The general consumption rate of Nigerian is however estimated at 700 trucks, which is about 27 to 30 million litres per day.
The alleged increase of petroleum pump price was also dismissed by the corporation, as it insisted that the ex-depot price of N133.28 per litre would be maintained to stabilise the government’s official price of N145 per litre.
In 2017, the federal government also commenced the implementation of the Nigeria Gas Master Plan (NGMP), as it awarded the $2.8bn gas pipeline contract designed to run from Ajaokuta to Kano. The 614 kilometre 40-inch pipeline contract was presented by the Minister of State for Petroleum, Dr Ibe Kachikwu to the Federal Executive Council, for approval in the last quarter of 2017.
The award of the gas pipeline contract marked the beginning of the implementation of the first phase of the master plan that was approved in 2016. The project is designed to transport additional gas supply from upstream producers to various demand points at the cost of N7.7bn.
In its bid to improve the Nigeria power sector, the federal government also launched the power sector reforms recovery programme, an action plan designed for sweeping restructuring of the 11 Electricity Distribution Companies (DISCOS) for effective service delivery. The power sector reforms recovery programme was launched by the Minister of Works, Power and Housing, Babatunde Fashola at a stakeholder’s meeting held in Abuja also in the last quarter of 2017.
In the action plan, the Nigerian Electricity Regulatory Commission (NERC) is to engage the DISCOS on revised business plan to meet up their responsibilities in the country’s privatised electricity market. Stakeholders also canvassed for the full liberalisation of electricity to improve service delivery.
The Nigeria Society of Engineers in a stakeholders’ conference on the diversification of the Nigerian economy held in Port Harcourt in the later part of the year, urged the government to consider technocrats in the allocation of DISCOS, noting that such initiative would enhance service delivery in the sector.
During the year under review, the Nigeria Content Development and Monitoring Board (NCDMB) also made moves to consolidate content development in the oil and gas industry.
Executive Director of the (NCDMB), Engineer Simbi Wabote, engaged key stakeholders across the country through workshop and seminars organised by the board on the need for strict implementation of the Nigeria Oil and Gas Industry Content Development (NOGICD) act.

Taneh Beemene