While most of the batch 1 ministerial nominees spent an average of 30 minutes with the senate, Ibe Kachikwu was grilled for well over 90 minutes – understandably so, considering how strategic the petroleum sector is to the country’s revenue. Kachikwu demonstrated remarkable poise, confidence, and eloquence throughout the course of the screening. He also demonstrated deep knowledge and experience on the workings of the oil & gas industry, as well as having a clear plan to drive the petroleum ministry. He was, by far, my standout performer during the batch 1 screening.

Below is a summary of the major highlights from Mr. Ibe Kachikwu’s ministerial screening session with the Nigerian Senate.

Introduction...
Kachikwu stated that he has had a 30-year unblemished career in the oil & gas industry, starting from upstream, downstream and private sector. He went on to state how fortunate and privileged he has been to have enjoyed FG scholarships as well as Harvard University scholarship for his PhD in Law. He said he had learned certain principles from his dad including Humility, Service to Nation, Integrity, etc.

On ensuring consistent availability of refined petroleum products…
Mr Ibe stated that the short answer to ensuring consistent availability of refined petroleum products is getting local refineries to work. He noted that importation of refined products is not just disgraceful to a big country like Nigeria, but it is also a lot more expensive than local refining.

On the state of the refineries…
Kachikwu noted that the refineries are currently operating around 25% capacity contrary to the figures being bandied around in the media (i.e PHRC – 65%, while WRPC and KRPC below 10%). He stated that there will be a review of all refineries by December to ascertain if they can consistently operate above 65% capacity, and any refinery operating at less will be completely shut down for proper maintenance.

On whether he’ll use and promote existing version of PIB…
Kachikwu was of the view that trying to pass a holistic PIB may be a cumbersome process, so he suggests breaking up the PIB into critical aspects and dealing with them individually. He stated that the country looses in the region of $15bn potential investments annually by not passing the PIB.

On the State he met the NNPC…
On the good side, Kachikwu observes that he met a lot of very good and committed staff who were yearning for leadership. Staff who knew exactly what the problems of the NNPC were and the solutions to such problems. On the bad side, he said he met huge corruption, poor contracts and poor structure. He said contracts have been reviewed to ensure that the terms yield the best value for the country. He notes that he met an NNPC whose annual expenditure was more than the aggregate annual budget of 3-5 states.

On whether he’ll honor invitations by the Senate…
Kachikwu says he’ll not just honor invitations from the senate but that he’ll ensure that the NASS receives monthly report on activities of the ministry. He stated that the requirement for knowledge and information is not a privilege given to Nigerians but rather a right the citizens are entitled to, and as long as he has influence at all, he’ll ensure that those rights are respected.

On promoting local content…
The minister-designate stated that the local content will go beyond contract administration and personnel issues, to incentives and investments. He said a Wealth Fund will be created to encourage Nigerians, banks and other financial institutions get into the complicated deep stream sector.

On experiences he brings from the private sector to the public sector…
Transparency – Mr Ibe said that some of the wild news he hears in the public sector are completely alien to the sector he is coming from. To quickly promote transparency, he said that PWC has been engaged to audit management accounts. He said he has also made a commitment to publish monthly reports of the NNPC.
Speed – He stated that speed is time and time cost money. He observed that speed in the oil industry can mean the difference between success and failure of a project.

On why investors with refinery licenses do not invest…
He stated that some of those who acquired licenses did so only for the purpose of crude allocation without any desire to invest in refineries, while some others acquired refinery licenses without any financial and business modeling to understand the refining business. He said that, going forward, all requests and grants of licenses will be reviewed to ensure that only those with business plans and who can deliver on such business plan will be given licenses.

On the continuation of subsidy regime…
kachikwu said that most people coming from the private sector will say an emphatic NO to subsidy, and that the president knows where he stands on the issue. He, however, noted that the president fully understands the need to do away with subsidy but that he is worried about removal of subsidy without first having palliatives in place to cushion the effect of such removal. He said some of the palliatives being discussed include things that affect every Nigerian such NHIS, railway development, power delivery, subsidy of transport tickets, etc.

He also noted that there was a lot of fraud in the previous subsidy regime and so it was important to establish what the true subsidy payment was. For instance, he said that figures available to him suggest that Nigeria does not consume 40m litres/day of PMS as estimated by PPPRA but rather sub 30m litres – thereby reducing subsidy by 25%. He said they are also working to resolve demurrage issues, which constitutes around 25% of subsidy payments. He believes that if the fraud component of subsidy is stripped off completely, then the true subsidy amount will be so small that it will be easy to fund it through other means other than the budget.

On exploration for oil in the Chad Basin…
He said that from recent reports available to him, there are initial indicative geological surveys to show that oil may well be found in the Chad Basin. He said the corporation will apply all energy and resources using modern technologies to ensure that the Basin is developed.

On stopping gas flaring…
He said the country would have to focus on investments to convert flare to money rather than just Penalty. He said that the single most important deterrent to gas development is the absence of policies, statutes, incentives and a masterplan. He said most countries like the UAE, Qatar, Saudi Arabia, etc have left Nigeria far behind and are moving fairly rapidly into gas development. He said he is absolutely committed to gas development both for local consumption and foreign supply, especially in the face of declining oil prices.

Subtle Indictment of previous administrations…
During the course of the screening, Mr Kachikwu noted that:
**(1) Previous subsidy regimes were characterized by fraud
**(2) No shut down maintenance had been carried out in the refineries for more than 10years
**(3) There was and still exist endemic corruption in NNPC
**(4) Previous administrations lacked Executive Will to follow through with reforms in the sector

Senator Akpabio also noted that for 7 months, the NNPC made zero (0) allocation to the Federation Account, leaving the government to only depend on contributions from FIRS, CBN, Customs, and other revenue generating agencies. He also noted that for 3 years, even as a governor of an oil producing state, he could not reach the Minister of Petroleum – a testament of how powerful the former minister was.

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Republlican:
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Sorry to disappoint you dear - the source is 'Yours Truly'. I watched the entire screening session of Ibe Kachikwu, so it is my summary of what transpired. But I can assure you that I have been entirely objective in my review.

You can watch the uploaded videos on Channels TV (Youtube channel).

Nigeria will rise again I believe.