₦airaland Forum

[b]‘Government hiding information on subsidy’[b]

Dr Suleiman Sa’ad, a lecturer at the Nigerian Defence Academy, asserts in this interview that the Nigerian National Petroleum Corporation (NNPC), when compared to some other national oil companies, is an underperformer. Dr Sa’ad states that for the NNPC to operate at optimal level and effectively compete with its counterparts in other countries, it has to be free from government interference. Nigeria, the NDA lecturer declares, also suffers from what he calls energy poverty
The Nigerian oil sector has been in crisis for more than three decades. What are the sector’s main challenges?
For over four decades, oil has been playing a pivotal role in the economic well-being of the country. However, for more than two decades, the sector has been facing some daunting challenges that are threatening it. Those challenges include political and bureaucratic corruption, regulatory uncertainties and too much political interference in running the sector.
There are also unfavourable government/ international oil companies (OICs) relationship, competition for oil resource rents among the various tiers of government and regions, as well as the incessant crises in the oil producing areas fuelled by abject poverty and environmental damage. These led to loss of billions of revenues that should have accrued to the states.
There have also been cases of divestment by IOCs. Many times, IOCs had had to declare force majeure on their operations, with the consequent loss of thousands of barrels of oil.   
Despite those challenges, I believe the sector has great potentials to contribute more than what it is contributing today. However, government needs to be more serious. Oil prospecting and operation licences need to be allocated transparently through competitive bidding. All revenues from sales of such licences should be paid directly to the CBN and Nigerians have the right to know how much revenue accrues to the government from the sector.
Investment-friendly policies should be pursued to encourage influx of foreign and local investments into the sector. Government should ensure security and protection of lives of property of both foreign and local entrepreneurs operating in the sector. A programme similar to the USA’s Marshall-plan should be introduced to address environmental crisis in oil producing areas and poverty generally. Finally, oil prospecting in the inland basins should be pursued to a logical conclusion.
 
What are the most promising prospects for the oil and gas sector?
The potentials are huge, as a major income earner for the economy and as clean energy for electricity generation. There is a large and underexploited world oil & gas market which Nigeria can lock into. For example, less than 20 per cent of the world oil reserves are under the control of the IOCs. These companies are ever ready to inject billions of dollars and technical expertise into the Nigerian economy. What they only need is an enabling environment and the security for their investment.
Furthermore, there is a large market for refined petroleum products in the West African sub-region yet to be harnessed; what Nigeria needs is to inject capital into its refining business and work at exporting petroleum products to the neighbouring countries. We may need to have a uniform pricing policy for petroleum products with our neighbours. This would likely eliminate smuggling of the products out of our country.
It may interest you to hear that Saudi Arabia is not only a major exporter of oil globally; it is also the largest exporter of diesel in the Middle East. Recently, Saudi’s Aramco, jointly with ExxonMobil, built a new world-class export refinery with a refining capacity of 400,000 barrels per day. Similarly, the Kuwait Petroleum Company bought many refineries and retail outlets in Europe and developed their own brand, the Q8.
Finally, natural gas is considered as the fuel for the 22nd century. Gas is likely to displace oil in the international energy market. The potential for natural gas is that it is used both directly as a relatively clean substitute for other energies, and indirectly as an input into the electricity industry. But the startling fact is that most (associated) gas is currently flared. Estimates suggest that current levels of gas production, if properly used, could supply more than the whole of Nigeria’s current usage of energy.
 
There have always been allegations of large-scale corruption and inefficiency in the oil sector, particularly in the NNPC. How true can this be?
The NNPC has been performing far below average by all standards. This is a company that was established 40 years ago, but as at today is not capable of providing even 60% of our domestic requirements of light products. We have never seen their profit and loss reports published.  
When you compare the NNPC and other national oil companies like SONATRAC of Algeria or PETRONAS of Malaysia you will find that our case is a nightmare. For example, PETRONAS was established three years after the NNPC was and is today considered as a hybrid national oil company. PETRONAS has since gone international; it is present in more than 30 countries, including some West African countries. According to its chief executive, less than 20 per cent of its revenues is generated from its Malaysian operations. Today, PETRONAS is competing favourably with international oil companies such as Shell and BP in securing market and contracts globally. In some cases they have secured contracts in areas where those IOCs have had less success.
Similarly, Saudi’s Aramco and SONATRAC have also gone international. They can today independently attract foreign investments, and raise capital at the international capital markets for their expansion and new projects. They have outlets in other countries.   
I believe that for the NNPC to be efficient and meet the current challenges facing the industry globally, it has to operate like a private entity, independently attract investments from both within and outside the country and be able to raise capital for its activities at the international capital market. My dream is to see NNPC mega stations in the city of London or, at least, in Cotonou or Niamey; to see the posts of the NNPC Group Managing Director and executive directors advertised in influential international publications like the London Economist or the New York Times; and to see the NNPC publish its balance sheet in both national and international newspapers.
Furthermore, the Minister of Petroleum Resources and the ministry’s Permanent Secretary should have no influence on NNPC’s activities and their offices should be relocated from the NNPC Towers. It is only through partial or complete privatization of its activities that the NNPC can be able to meet the current and future challenges facing the industry. After all, what we have as BP, the third largest private oil company globally, used to be the Anglo-Iranian Oil Company wholly owned by the British government.

Source: http://dailytrust.com.ng/sunday/index.php/business/19707-nnpc-is-a-nightmare-nda-don

Hmmmmm really?




Duly noted

NNPC is a joke

professor you better go learn how to sew grand-nut.
if asari cash you for port harcourt, you go hear am.

Gej if you are not the father of modern day corruption, make that report available for all to see.

tit:
professor you better go learn how to sew grand-nut.
if asari cash you for port harcourt, you go hear am.

dog, how dem de take sew groundnut again?