Challenged, Diezani holds course

THE Ministry of Petroleum Resources oversees the most strategic but maligned sector of the nation’s economic domain.

But even under very challenging environment, the ministry’s arrowhead and Nigeria’s first female Petroleum Minister deploys uncommon strength, focus and vision to transform the nation’s foremost revenue earner.

Over 50 years experience in the oil and gas industry continues to reveal the complex dynamics of balancing global energy security, domestic economic growth, climate, and environmental considerations. This riveting insight was shared recently by the Minister, Mrs. Diezani Allison-Madueke, with journalists. With little question the petroleum sector is the primary driver of Nigeria’s socio-economic development - being the chief foreign exchange earner.

Currently, all alternative revenue generation efforts and options for the country pale in comparison with the sheer size of petroleum revenue in Nigeria. It’s then little wonder why the sector has drawn and continues to attract the lion share of focus, wrangling and debate in the national space. In effect, being the key driver and supervisor of this all-important ministry then poses the most policy-making, operational and structural challenges - more than that experienced by any other Nigerian ministry or minister. This has been the lot of the Ministry of Petroleum Resources and Mrs. Diezani Allison-Madueke, the nation’s first lady petroleum minister. But significantly the Bayelsa-born technocrat has shown surprising strength, focus and vision.

One of her most important achievements is putting together the Petroleum Industry Bill, PIB, now before the National Assembly. Despite the current wrangling in NASS, delaying its expeditious passage, the Bill essentially targets a fundamental restructuring of the petroleum industry to maximize returns on the country’s investment in the oil and gas sector.

Stemming from the Oil and Gas Reform Implementation Committee, OGIC, empanelled to review the subsisting 16 laws that govern the nation’s hydro-carbon resources arena, the PIB represents a one-stop-shop legislation that would guide the sector and effect a pro-Nigeria restructuring of the country’s lop-sided relationship with international oil companies, IOCs.

The initial efforts to push the PIB were scuttled in the sixth National Assembly. No thanks to intense intrigues, thereby provoking business divestment from Nigeria as well as prospective investors heading to nearby countries such as Angola, Ghana and Burkina Faso which boasted more stable policies. Today, for Nigeria, the story appears different.

The PIB cobbled under the watch of Diezani essentially incorporates the legal outline that will delineate and shape the oil sector. The creation of a conducive business environment for petroleum operations, optimisation of domestic gas supplies, especially for power generation and industrial development; establishment of a progressive fiscal framework that encourages further investment in the petroleum industry while optimising revenues accruing to the government; the establishment of commercially oriented and profit-driven oil and gas entities; as well as the deregulation and liberalisation of the downstream petroleum sector form central pegs of the PIB.

Between vision and specific executive action, what remains to give teeth to the painstaking efforts to produce a transformative blue-print to guide operation of the nation’s petroleum sector is consideration and endorsement by the national parliament. As Nigerians wait with bated breath, it will be worthwhile remembering the soft-spoken Amazon who gave life to the script.

As the PIB currently enjoys the limelight, the international oil firms are expressing reservations at the impending passage of the bill. But it could be recalled that the IOCs were also very wary about the passage of the local content law. Today, it is in operation and progressing swiftly to achieve its vision targets.

The Nigerian Oil & Gas Industry Content Development Act 2010 (the “Local Content Act” or “NCA”) received presidential assent on Thursday April 22, 2010. Now in operation, the Act seeks to increase indigenous participation in the Nigerian oil and gas industry (the “Industry”) by prescribing, inter alia, minimum thresholds in relation to the utilization of local services and goods.

The Local Content Act which derives from the Nigerian Content Policy focuses on the promotion of value addition to the Nigeria economy through the utilization of local raw materials, products, and services in order to stimulate growth of indigenous capacity.

The NCA accords certain privileges and preferential treatment to companies that qualify as “Nigerian Companies” pursuant to the Act, including preferential treatment in the award of contracts for projects in the industry. To qualify as a Nigerian company under the NCA, a minimum of 51 per cent of the issued shares must be held by Nigerian shareholder(s), whilst the remaining 49 per cent of its issued shares can be held by foreigners.

According to the Managing Director of the NNPC, the NNPC had achieved over 40 per cent in the area of encouraging local participation in the oil and gas industry. “The participation of Nigerian companies in the oil and gas business, especially the upstream segment has substantially increased from a meager 10 per cent before the enactment of the law to more than 30 per cent even in the deep offshore as recently demonstrated in the just commissioned Usan Deep Offshore Field development.”

Mrs. Alison-Madueke described the signing of the Nigerian Oil and Gas Industry Content Development Act by President Goodluck Jonathan as arguably the most heralded development for the industry in the past few years. “We are at the implementation stage of the local content law. As you know, implementation is key and all is being done to ensure that those whom the law is meant to benefit are carried along. I will ensure that a major sensitisation drive begins in the next few weeks,” she told the leaders of the pan-Ijaw socio-cultural group, Ijaw National Congress, INC, in her office during a recent courtesy visit.

Although some stakeholders want far more speed in meeting vision targets of the local content policy, like Governor Seriake Dickson of Bayelsa State, it cannot be denied that significant grounds are being covered. According to Gov. Seriake: “The top players in the sourcing and lifting of crude from these devastated communities don’t have offices here in the Niger Delta".

BY LEWIS CHUKWUMA, a public affairs analyst, wrote from Abuja.