I admit that we failed to give Nigerians refinery –Kachikwu

Former Minister of State for Petroleum Resources, Dr Ibe Kachikwu, speaks with journalists on a wide range of issues, including challenges he faced while in office. OLUSOLA FABIYI, who was part of the team, reports

Do you think you have set the industry along the right path and is there anything else to be done to take it to what President Muhammadu Buhari called the ‘next level’?

You are absolutely right and that is why if you listened to the video, you would realise that it was talking about continuity and being able to sustain what was ongoing. I think one of the things we have done is to ‘socialise’ the policies. We went to the Federal Executive Council, we passed the Petroleum Industry Bill, we passed the gas policy, and we have submitted the final copies of the fiscal policy. That wasn’t taken unfortunately. The things that we have done around gas specialisation came out from there; the refinery project that we want to kick off came out from there. Infrastructure project and Niger Delta militancy also came out from there. We worked very closely with the National Assembly on the passage of the bills so I strongly believe that the policies are fantastic but the biggest thing is to make them laws. Unfortunately the very first one, which is the mother of legislation, the Petroleum Industry Governance Bill, was not signed by the President because of few amendments, some of which we supported but that is being done by the National Assembly and should probably be ready now.

You were unable to give Nigerians refineries as promised as well?

You are right. It is one area where I think we did not deliver the mandate and I am bold enough to say that. Recently, I think I saw something like ‘Kachikwu failed to deliver on his five promises on refineries’. I think it is a misunderstanding of how the system works. I started within as Group Managing Director and also as Minister of State at that point; most of the powers and work were centered on me. If you look at the refineries, the first problem we had was that they were not functioning when I assumed office in 2015 and because of the huge apparent fuel scarcity; it was a major problem for me if I had to wait for vessels to arrive each time to meet the delivery timeline. These were the problems. So I was focused on how to get them working, at least to start, no matter how little and all they gave me was one million litres a day.

The pipelines that were supplying fuel had all been destroyed and they had entered into a contract before we came in, to supply product by vessels. The cost of those vessels supplied was more than the value of the crude oil that was being supplied. It did not make any financial sense. So I cancelled that and challenged Nigerians who were in this entity to go and use their money to repair the pipelines.

Illegal refineries are still all over the country, why then is the government burning these refineries down?

Let me start with illegal refineries. The problem with illegal refineries is notably the lack of policy deficiency on the product. The business model for illegal refineries is zero cost of crude oil; nobody is doing that and saying, ‘look I am going to steal it and make something out of it’. That is what it is, from breaking of pipelines to all that stuff, so it is not something we can encourage.

Now, is burning and destroying the refineries the best way to go? The answer is no, because it has environmental hazards. What we just need to do is to be more efficient in terms of correction.

What is the latest on Project 100?

Project 100 is not really about 100 companies. It is more than 100 opportunities, and they could run into thousands because there is no limit to it. That is why we engaged one non-governmental organisation to set the parameter. Is the management credible, are you involved in legal business, what kind of funding do you have, how much have you been putting in, have you identified the business track, do you have the right sort of training? Once you satisfy those things, you get into Project 100. So if we find 1,000 companies that are fantastic, we will not limit it to 100. What I have set for them is that in the next 10 years, I like to see this country building most of its oil facilities, so all of them will be working towards that. Some are going to enter into joint ventures with foreign entities.

On the issue of transparency, Nigerians still believe that what is being stated as the number of barrels of crude oil being produced in a day may not be correct. Also, why is it so difficult for us to have metering?

Let me tell you about the transparency issue in the region. This sector has done well between 2015 and now; many of our concepts have saved us huge sums of money and encouraged open-door competition. Now in terms of volume of oil produced; today, I can tell you, using the experience of the Department of Petroleum Resources. You know, the DPR launched its database, which is covering a lot of fields. We can actually tell you online, every minute, what is being produced. We have passed that stage. Metering is fine but once we capture this data, a level of metering is already going on and we are capturing that on a day-to-day basis.

I can say we are producing 2.3 million barrels, using the DPR data. What I like to do, however, is to interrogate the data. We just launched it about two months ago. We are tracking you from when you produce to when you put it in the tank to when you deliver it and to when it is discharged. So in terms of transparency and what we produce, it is not an issue.

Has the President Buhari-led administration given out any oil block?

First, this government has not given out any oil block. The President believes that we should first clean up the sector before having any additional political patronages.

There was a time I issued a warning that we would take back the blocks that people were not working on. We said unless for blocks that people were working on, we were going to take back the blocks and they said, no, we have a 20-year time frame. Yes, they were right because you cannot breach a contract, but there was a loud warning that if you came for renewal and you were working on them, we would take them back and give them to individuals who could work on them because government was losing money.

How many of them?

I don’t have the details of blocks that we give renewal off hand.

How much is actually being spent on subsidy?

Frankly, for any information on subsidy, you have to talk to the Nigerian National Petroleum Corporation because they monitor subsidy and they are the sole importer and supplier.

Are there impediments following the problems you had initially when you assumed office?

There will always be (impediments). Businesses and managers should disagree. One of the things I did in the ministry was to have an open-door policy. When I was there, I never sat in a big chair or at a conference table. So even if there were some disagreements, I think Nigerians should not pay attention to it. Again, managers learn, let me not claim credit for believing that managers don’t make mistakes, I do.

There is so much controversy surrounding Ogoni Cleanup. The government has voted money to clean up the place but nothing seems to be happening there. What exactly is going on?

There is still work to be done. We voted money to clean up (the place) but you know that a lot of money is coming from the private sector. Government is contributing some and Shell is also contributing some. The cleanup has not started fully the way it should because the modalities are being worked out. Shell’s position largely has to do with the position of the Ogoni community. Nigeria and Shell are involved in this blame game and the reason for that is understandable; people lost their lives so it is a very emotive issue. I think the time has come when (the) petroleum minister needs to step in and work with the Ministry of Environment and Niger Delta to meet and have a discussion. From my conversation with the Ogoni community, it is obvious that they want to know if people are being transparent. They are not saying no we will never go back, they are saying let’s sit down and have a memorandum of understanding.