Buhari, politics of sanitising oil ministry

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Inthe build up to the 2015 presidential election, the president, Muhammadu Buhari as candidate of the All Progressives Congress (APC) promised to sanitise the oil sector, which provides Nigeria with 95 percent of its foreign exchange earnings and which invariably is thelifeline of the country’s economy.To demonstrate his willingness and commitment to that promise, he brought in a technocrat, Dr. Ibe Kachikwu, first as the Nigerian National Petroleum Corporation (NNPC) helmsman and later as the minister of state for Petroleum Resources. Kachikwu remained the minister until last month when all the ministers were told to leave at the expiration of Buhari’s first term in office. Although, available records show that Nigeria’s enviable oil and gas and renewable energy reserves have not translated into meaningfuleconomic growth, thereby making itdifficult to optimise the resources for the benefits of Nigerians, industry players are of the view thatKachikwu’s roadmap tagged “Short and Medium Term Priorities also known as 7 Big Wins (2015-2019)” appear to have in no small measurehelped to record some major breakthroughs in the sector.For instance, one of the ministry staff noted that there has been deployment of new organisational structure corporate wide, emplacement of new and workable business models, initiation and consistent publication of NNPC monthly financial and operation report since September 2015, conduct of NNPC outstanding Annual Audit and so on, and these have blocked leakages and put an end to bad contracts.“Also, the NNPC management has replaced Offshore Process Agreement (OPA) with the Direct Sales and Direct Purchase (DSDP) scheme with reputable refineries toensure product availability, a measure reports indicate, resulted in saving about $1bn.“It is worthy of note to say that, withthe implementation committee set up to monitor the implementation of ministerial directives on cost reduction headed by the PermanentSecretary, ministry of Petroleum Resources, the cost of crude oil production has come down from over $32.00 in 2015 to $22.00 in thelast quarter of 2018. This was a quantum leap in achievement,” the ministry staff.Speaking in the same vein, a chieftain of the ruling APC, who also pleaded not to be named, further noted that “on the international scene, Nigeria’s Mohammed Sanusi Barkindo was appointed the Secretary-General, Organisation of Petroleum Exporting Countries (OPEC) in 2016,Nigeria was exempted from oil cuts,and the country successfully reconciled its crude oil data with the OPEC and also spearheaded thetransformation of African Petroleum Producers Organization (APPO). These things didn’t just happen by sheer happenstance. They were a direct result of the efforts of Dr. Kachiukwu in making sure that the oil and gas sector retained its pride of place, without however downplaying the need for afuture without oil. Certainly, in manyways than one, the former minister has proven to be one in a class without peer in the ways and manners he has continued to discharge his responsibility. His big wins have not ceased to happen and all because the former ministerhas remained diligent and ensuring that the right messaging were sent out at the right time, without doing a needless mud fight,” he added.Daily Sun investigations revealed that those in authority too have never feigned ignorance about the state of affairs in the petroleum sector and how it could contribute in no small measure to revamping the country’s economy if properly managed. It was in the light of the above that Kachikwu’s policy programmes, focused on seven thematic areas were embraced.The programmes initiated by the former minister, it was gathered, were designed to grow the oil and gas industry to enable it serve Nigerians better. It came into effecton October 27, 2016 after it was launched by the president.Major aspects of the programmes are: Policy and Regulation, national oil policy, national gas policy, downstream policy, fiscal reform policy, petroleum industry reform bill, business environment and investment drive; Accelerated Income Streams, upstream, midstream, downstream; Gas Revolution, gas infrastructure development, gas revolution projects, promotion of domestic ultilisation of LPG and CNG, reduction of gas flaring, gas commercial framework implementation and gas to power.The objective of the gas revolution agenda, the then minister noted, was to transform Nigeria from an oil-based economy to a gas-based one through the development of robust gas infrastructure that wouldensure improved power availability and drive the establishment of gas-based industries.Under the same strategic policy, theministry also proposed to shift focus from government built infrastructure to investor built one. Particularly, the government is expected to provide incentives for the building of infrastructure to supply gas from the Eastern parts of Nigeria to commercial demand centres in the Western and Northern parts of the country. A key short-term objective was to introduce a regulatory framework for commercial pipeline investmentwith clear tariff methodology.The focus on gas will also involved the development of gas-based industries and the utilisation of gas hubs near central processing facilities (CPF). These CPFs were a key part of the Gas Master plan. They are however yet to be built.On the upstream side, the roadmap proposed a review of the current legal and regulatory framework on gas flaring and implement strandedgas development projects including floating LNG, as well as establish a framework for the use of modular gas processing and utilisation systems to allow third party off-takefrom the wellhead. Under this scheme, the government is also expected encourage the fulfilment of domestic gas obligations (DSO) by moving from a sanction-based model to an incentive-based model.This, it is noted, would require the amendment of the National Gas Supply and Pricing Regulations, which impose fines for failure to fulfil DSOs.