The Nation Newspaper

Tag: Kachikwu

  • Kachikwu: Niger Delta dialogue has not collapsed

    Kachikwu: Niger Delta dialogue has not collapsed

    The  federal government says it is very much at work to achieve a mutual understanding with Niger Delta stakeholders, through an upcoming dialogue, to bring lasting peace and sustainable development to the oil-rich region.

    The Minister of State for Petroleum Resources, Dr Ibe Kachikwu, who debunked rumours that dialogue efforts between the two sides had failed, gave this assurance yesterday in Effurun, Uvwie council area of Delta State, where he was the Visitor at the 2016 Convocation ceremony of the Petroleum Training Institute (PTI).

    The minister, who encouraged citizens not to despair in the face of the prevailing economic challenge facing the country, assured that the federal government is doing all that is needed to end the current suffering through the implementation of sincere policies and programmes. He assured the people of the Niger Delta of President Muhammadu Buhari’s devotion to giving them their fair share as critical contributors to the nation’s sustenance.

    According to him, a lot of works have been going on underground, aimed at stopping the resurging militancy in the oil-rich region, adding that the administration had been taking its time so as not to make the sort of mistakes made by past administrations, when quick-fix solutions were engaged, leading to early failure of such solutions.

    ‘’It has not collapsed, I have led that process and the president is very supportive of it, what  I think the president does not want to do is putting in place same old models that have failed; after four months, the militants are back to the creeks, so we are looking at long term models.”

    Speaking on the popular belief that the Buhari administration has been particularly unfavourable to the people of the region, Kachikwu said ‘’we absolutely believe that the Niger Delta is key to this country; they have contributed so much and the society has failed them in very many ways. I used the word society, not necessarily government. If you look at what has been provided in the last ten years, it is a lot and some of that hasn’t gotten to them for one reason or the other.

    The minister said he had ordered the Petroleum Trust Development Fund (PTDF) to provide scholarship for further studies for the three best graduating Ordinary National Diploma (OND) graduates, just as he said the three best graduating Higher National Diploma (HND) graduates won themselves automatic employments under his ministry.

    The Principal of the PTI, Professor Sunny Iyuke, said the institution was in process of transforming into a digital petroleum training institute, through an e-Platform Application, a project estimated to cost about N120 billion.

  • Kachikwu: $40b down the drain in Niger Delta

    Kachikwu: $40b down the drain in Niger Delta

    Minister of State for Petroleum Resources Emmanuel Ibe Kachikwu yesterday told Niger Delta Coastal State monarchs and stakeholders that there was no infrastructure in the creek to show for the $40 billion released to the Niger Delta in the last 10 years.

    He told the monarchs who visited him in Abuja that he (the minister) went round the creeks and found no infrastructure that reflects the money disbursed to the region through the Niger Delta Development Commission (NDDC) or the 13 per cent derivation from the Federation Accounts Allocation Committee (FAAC).

    The traditional rulers had in their joint presentation read by Bolowei of Gbaramatu Kingdom, Chief Wellington O. Okrika,  demanded a Federal Government dialogue team. This, they said, will give them confidence in the peace moves in the Niger Delta.

    The group demanded the release of the 10 “innocent” school children arrested by the army on May 28 in Oporoza and others on “trumped up charges”.

    The monarchs demanded for the return of the Golden Sword, the symbol of authority of the Gbaramatu traditional institution, and the three traditional council speed boats in the army’s custody.

    They also demanded for cessation of hostilities perpetuated by the military in the Niger Delta.

    The traditional rulers requested the government to make a categorical statement about the opening of the Maritime University-Okerenkoko, Delta State for academic activities in the 2016/2017 session.

     Kachikwu requested the stakeholders to embark on soul searching on the roles of traditional rulers, indigenes of the region and others in the application of the $40billion in 10 years.

    According to him, the Federal Government is interested in releasing money for the development of the Niger Delta, if governance and transparency are addressed.

    Kachikwu told his guests that unless the issue of transparency in the management of funds is solved before further release of cash, there will be no result.

    His words:  “If you look at the amount of money that has been out into the Niger Delta over the last 10 years, in papers it is over $40billion. These have come from NDDC; it has come from derivation, it has come from oil companies’ investments.

    “Over $40billion, but as I go to the creek, I see no single infrastructure that you can point to to say this is the result for these investments. So what it means is that we must begin to do some soul searching ourselves: where did all this money go to. Who to them, what where they applied for ? What were the roles of our own people and others no necessary from the Niger Delta and how this money was applied .

    “Because unless you solve the governance and transparency issue in terms of spending this money it doesn’t matter how much money put into the place you are going to go back to square one.

    “So the first fundamental question we must begin to ask now is how are these institutions run? How are these monies placed and what roles do our traditional rulers play in the decision making process on how these projects are supposed to …

    “And how can we put a sense of responsibility on delivering on the infrastructural imperative ? So there is a lot of home truth that must happen.”

    Continuing, the minister said having seen the demands of the traditional rulers, there must be a developmental process agreement for the Niger Delta community that could be sustainable and to which the government can release money.

    He said : “The second is how do we go forward even if we understand the past ? I have seen the list of demands that you have; they are reasonable but that is just the precursor to the main issue.

    “If any issue is there, there must be a developmental process that is agreed, agreed for the Niger Delta community, which is long serving and to which money can be thrown.”

    This, according to him, is necessary for the government is interested in putting money in the region to ensure peace, stability and to sanction an organised investment agreement structure.

    Kachikwu said: “But that money we will have to find from everybody who is active in the area, whether they be the oil companies, the government, or the international community. There is a lot of interest in trying to put money to the Niger Delta as long as one you can have peace, two you can have stability and three you can have a sanctioned organised investment agreement structure . So that we all know what it is that we are investing in. So that the $40billion that has been spent in the last 10 years, it doesn’t happen again and we find a lot of loss.“

    He also told the monarchs that the military was not withdrawn because some splinter militant groups were still attacking oil facilities in the Niger Delta.

    He told the monarchs that President Muhammadu Buhari is committed to the engagement of the Niger Delta people but he is always looking for data on what happened in the past to know the fundamentals that are necessary for a solution.

    The minister said: “I will obviously take you message back to him. I take obvious position in term of this that this is what is required for us to start this engagement and we will make every effort we can with the authority of Mr. President to set up a team to begin to find out the basis upon which this engagement will take place and see what it is we can do.”

    He explained that Nigeria was facing its worst moments due to falling price of crude oil from about $120 per barrel to about $42 that is not even guaranteed to endure.

    The minister noted that the Federal Government lost over 50 per cent of its income owing to the situation, adding that militancy in the Niger Delta has reduced crude oil production from 2.2million barrels per day to 1.3million barrels per day.

    Kachikwu said consequently both decrease in volume of production and price, have further led to 60 percent drop in Nigeria.

    He, however, posited that the situation has caused governors’ inability to pay salaries and develop infrastructure but the worst loser is the Niger Delta that suffers from pollution and lack of security.

    His words: “We are presently passing through very grave circumstances in Nigeria. Oil, that was at least on average of $120 today is down to about $42 with a lot of threats on whether or not that price can even hold as the OPEC meetings are in the few weeks. But there is need for that $42 to continue to be threatens . At the beginning of the year it was $28 , it came to $50 and now it is $42.

    “So the price continues to struggle . What it means is that even from the price element alone, the federal government has lost over 50% of its income. And so to the states. As if that wasn’t bad enough, the militancy has brought down production from an average of 2.2million barrels to today about 1.4million barrels. If I discount what I am saying here today it might be 1.3m barrels.

    “What it means is that when you take the cumulative effect of both pricing and volume, we are down to more than 60% drop in the income of this country. So, we can’t even fund the 2016 budget. If we don’t fund the budget governors don’t get money, salaries don’t get paid, infrastructure don’t get delivered and governance can happen.

    “So I see that those who pay the biggest price for militancy is the Niger Delta itself. The person who pays the biggest price for pollution is the Niger Delta itself. The person who pays the biggest price for security imperative and lack of security is the Niger Delta itself.”

  • Kachikwu’s fate

    Kachikwu’s fate

    •Questions arise about his new role and the composition  of the new NNPC board

    Oil has been a special part of the Nigerian story in the past few months. Not because of the plummeting prices of crude oil or the defaced environment slick with spills. It is because of the rampaging Niger Delta Avengers who have manifested their disenchantment blowing up pipelines and reducing our capacity to profit from the upsurge in global oil prices.

    But last week a trend that has attracted criticism over President Buhari’s style of government has spilled over to the oil industry. The president appointed a new board for the Nigerian National Petroleum Corporation (NNPC). Highlighting that announcement was the appointment of a new managing director in Dr. Maikanti Kacalla Baru. That decision defrocks Dr. Ibe Kachikwu of that position, which leaves him as the minister of state for petroleum.

    The following names, announced to the board, have raised a question of balance and sensitivity on the part of President Buhari: Mallam Abba Kyari, who is also the president’s chief of staff; Dr. Thomas M.A. John, Dr. Pius O Akinyelure, Dr. Tajudeen Umar, Mallam Mohammed Umar Lawal and Mallam Yusuf Lawal.

    First, Baru’s replacement of Kachikwu implies that Kachikwu would not only not run the NNPC behemoth but will now only act on the behest of the president who doubles as petroleum minister. Some analysts have expressed the worry that since Baru will report to the president, Kachikwu’s position runs the risk of being sinecure. The position of minister of state has tended to be sinecure because it often exists as pork and to satisfy appetites for ethnic, religious and political inclusion rather than need.

    What worried the Nigerian society more was the skewed nature of the board. Of the six names on the board, only one is regarded as belonging to the oil-producing areas of the Niger Delta. That name is Dr. Thomas John. The others are either from the southwest or the north. In fact, if we add the managing director, it is a northern affair.

    For quite some months, the nation has been held captive by the turbulence in the Niger Delta, and efforts to pacify them have had very suspect success. By some accounts, there are efforts to bring the insurgents to a negotiating table, although the rhetoric of the president has been quite ambivalent. But the Avengers are only a part of the narrative of alienation in the region.

    Since the days of Adako Boro, the region has not muted its outcry for its residents to enjoy the oil that comes from the bowel of their earth. Granted that the governments of the region, whether state or local governments or even interventions like the Niger Delta Development Commission, have also sharply fallen short of local expectations, the Federal Government ought not to compound it.

    The region suffers, for most part, from collusion between oil firms and the political elite in Abuja to determine the fates of their citizens. It is in that context that this new raft of NNPC appointees is viewed. It is also curious that the president could appoint Abba Kyari, his chief of staff, as a member of the board. The nation needs to know why. Kyari’s job as the president’s closest staff should not only be enough for one man but compels him look at all departments of government with even judgment.

    The regional tilt of the appointments followed outcry over Buhari’s security appointments, especially in the aftermath of the new posting of the Inspector General of Police, Ibrahim Idris. Against the background of the calls for restructuring and fairness in the country, the presidency ought to be careful not to inflame divisive passions.

     

  • Kachikwu, NNPC and need for continuity

    Proponents of restructuring in the Nigerian National Petroleum Corporation, NNPC, to divest Ibe Kachikwu of his double-barreled position of Minister of State for Petroleum and Group Managing Director (GMD) of the corporation have, at last, had their way. Last Monday, Special Adviser to the President on Media and Publicity, Femi Adesina announced that Maikanti Kacalla Baru had been appointed the new GMD of the corporation with a board headed by Kachikwu who retained his position as Minister of State for Petroleum. May be, that is just as well so that peace will reign within the establishment.

    For far too long, speculation about Kachikwu’s departure from the GMD’s job had ruled the media space with irritating frequency triggering, at times, frantic rebuttals from the agency. But as it goes in the popular Nigerian parlance, there is never a smoke without a fire. Kachikwu’s exit was a secret on everyone’s lips except the man who had the power to make it happen. But many had thought that Buhari would not want to tamper with an arrangement that is working optimally, that the timing of such an action, when it became imperative would allow for the deepening of the winning strategy that is being implemented.

    Many reasons had been advanced to justify it: that one man should not hold the two most powerful positions in the oil industry, conveniently ignoring the fact that the ultimate position was held by President Buhari who, had he not appropriated the position, still would have overriding powers, including that of removal, over Kachikwu. Or any other minister for that matter. The overwhelming feeling is that the President has capitulated to geopolitical pressures. Worse still, allusions have been made to the exclusion of the south-east zone in the NNPC board as further evidence that the Igbo of the South-east have no place in a Nigeria ruled by Buhari.

    This has become a recurring feature of PMB’s appointments since he came to power and this has also become increasingly worrying. May be we should remind our President that Ibe Kachikwu comes from the South-south geopolitical zone. While we ruminate over the political implications of the President’s action, good conscience will demand that we first consider how it affects the dramatis personae in this unfolding saga, Kachikwu himself. Does the President’s action amount to a vote of no confidence on the minister? Or has he discharged the initial mandate that warranted his occupying the two strategic positions at the same time? If Kachikwu were to leave the cabinet today, how will he be remembered? What will be his legacy?

    To answer these questions will require looking at his mandate even against the background of his self-professed benchmarks that revolved around the following fundamental issues: professional restructuring of the NNPC anchored on best practices spearheaded by knowledge based leadership, reversing the loses in the NNPC, enthroning transparency and accountability, steadying fuel supply, restoring confidence in industry stakeholders who were suspicious of the motives of Buhari and restoring stability to the Niger Delta through a win-win proposition.

    Nearly three quarters of a year later, can we attempt an objective scorecard? What will be the highpoints of his performance? Was the NNPC under the minister able to deliver on the key benchmarks? Is it not possible that the President, satisfied that the expectations had been met, therefore decided on a further restructuring to achieve his best intentions? If so, what are those best intentions? Are they best for the country or just for narrow interests, going by the composition of the board which suggests pacification of known political godfathers and gladiators in the party in power?

    However one evaluates the situation, judged by the ministry’s accomplishments within so short a time, it can be argued, without any fear of contradiction, that Kachikwu has been one shinning ministerial performance in a rather opaque canvass of questionable administration deliverables. Under him, accountability and transparency have been restored to the operations of the NNPC. The publication of monthly accounts may not mean much to the ordinary Nigerian who is more concerned with food on his table, electricity and water at home, employment for his or her three graduate children and a sound sleep at night and a trip from Abuja to Lokoja without the fear of being kidnapped on the way. However, to oil industry stakeholders, investors and entrepreneurs, it provides a solid mirror for understanding what goes on behind those tightly guarded dollar-incubating towers, analyzing the Nigerian economy and taking investment decisions.

    Of course, not even Kachikwu’s detractors will deny that by his handling of the fuel crisis, he established himself as a solid professional, a consummate bargainer and a principled patriot not deterred by the prospect of losing his job in so far as the greater national good was achieved. Talking about patriotism, his willingness to negotiate with the militants implied that not only was his job on the line, even his life could be sacrificed in the process. In spite of the predictable dangers including intra-party and inter-governmental distractions, he has forged ahead with the zeal of a patriot and the consuming passion of a martyr. Is this new arrangement a reward for such brilliance and exceptional dedication and performance? Some doubt it.

    Coming immediately after the very successful NNPC road show in Beijing China,where investment MOUs totally over US$50 billion were signed to fast-track the administration’s plans for transforming the oil industry, it will amount to a contradiction to interpret the President’s action as a vote of no confidence on Kachikwu. On the other hand, it may well be that in the President’s calculation,Kachikwu has delivered on the target set for him. I am more inclined to go with the latter view because I sincerely believe that the President cannot reward such performance with a seeming demotion. That being the case, I think there are, at least, three fundamental issues that should be addressed by the President. The first is the timing of the changes especially against the background of the need to have some consistency in driving already initiated platforms to their logical conclusion. Related to the first, we would be naïve to ignore the inevitable power relations that would disrupt the existing order. How this is managed would determine the sustainability of present achievements including relations with external stakeholders. Thirdly, it appears that the President is not bothered by the perception challenges that go with each of his every action as this latest step has oiled the arsenal of those who insist that his government has been grossly unfair to the South-east zone. This point has been made by several unbiased commentators that ignoring the South-east in most of the President’s appointment, except for the ministerial positions mandated by the constitution leaves sour taste in the mouth.

    Let me conclude on the following notes. One: the change has been made; Baru is an industry insider and a member of Kachikwu’s team. Therefore, he can be expected to deliver on the settled goals of the administration. Second, while Kachikwu’s position as chairman of the NNPC Board guarantees that he retains substantial oversight over the activities of the company, the fact that he is a junior minister can circumscribe his authority and render him vulnerable to humiliation. The way out: unless President Buhari no longer has confidence in him which is doubtful, the most strategic thing to do would be to confirm him as substantive oil minister without delay. That not only confers him with the moral authority to prosecute the existing reform template but the confidence of the Niger Delta militants who, at the moment, could see this thinly veiled demotion as a repudiation of Kachikwu’s promotion of dialogue with the Niger Delta militants.

     

    • OhuabunwaOFR, an industrialist writes from Lagos.
  • NNPC after Kachikwu: Will Baru sustain the tempo?

    NNPC after Kachikwu: Will Baru sustain the tempo?

    The dissolution of the Board of Directors of the Nigerian National Petroleum Corporation (NNPC) and the appointment of a new group managing director for the Corporation is the statutory right of the Presidency? But what will the future of the national oil firm be with the exit of Dr. Ibe Kachikwu, who has initiated far-reaching reforms to transform the state oil firm? EMEKA UGWUANYI examines the situation.

    New board, old challenges

    Stakeholders’ concerns are whether members of the newly constituted board are tested and proven Nigerians who will show love, care and commit to the growth of the Corporation to enable it add the expected value to the economy?
    Although Kachikwu is still the Chairman of the Board, he may not have powers to execute policies and decisions. The law establishing the NNPC stipulates that the Minister of Petroleum Resources shall be chairman of the board and the constituents of board shall reflect the geographical diversity of the country. As the Minister of State for Petroleum Resources and Board Chairman, he would only make suggestions at the meeting. Decisions reached at the NNPC’s board meetings are subject to ratifications by President Muhammadu Buhari, who doubles as the substantive Minister of Petroleum Resources.
    The Group Managing Director, Baru is a thoroughbred professional who grew through the ranks in the petroleum industry and the NNPC. However, considering the numerous unresolved issues in the industry such as full deregulation of the downstream sector, access to foreign exchange by oil marketers for fuel importation, huge cash call debts, attacks on NNPC Joint Venture facilities, among others, will he have the will power to tackle them?
    Will he continue with the monthly public presentation of the Corporation’s operations, income, expenditures, among others as started by Kachikwu, which industry players praised? Also Kachikwu’s administration promised to ensure that from the end of this year, NNPC will be producing its full year annual financial reports, operate as an independent company, have the ability to borrow from banks to finance its businesses, will Baru continue with all these?
    To resolve the huge cash calls owed by NNPC to JV operations, Kachikwu mulled zero cash call payment by NNPC from end of this year, which is planned to be achieved through making each of the Joint venture partnership an Incorporated Joint Venture (IJV), the engagement of international oil companies in the country to support their downstream arms with forex to be able to import fuel, these are some of the challenges Baru will face.
    The board acts as a bridge between the NNPC and the presidency. By the Act establishing the corporation, the board should be made up of nine members, consisting of a representative from each of the six geopolitical zones, the group managing director of the NNPC and the permanent secretary of the Ministry of Finance. The ninth member and chairman of board must be the Petroleum Resources minister.
    Where the President is the substantive minister as it was the case under the administration of former President Olusegun Obasanjo and President Buhari, the president either nominates an alternate chairman, or relates directly with the NNPC’s group managing director for regular updates.
    At the end of every meeting between, the board chair meets with the president to brief him and for the ratification of any decision taken. But, not every Nigerians knows that most decisions and actions taken by NNPC are ratified by the President. The presidential approval also extends to employment.
    For instance, employment of senior-cadre officers from the rank of a general manager and above must be approved by the President. But, where a management staff, apart from the GMD, is a nominee from a geo-political zone, the person stands for the two positions.
    For Dr. Austin Nweze, a lecturer at the Pan Atlantic University, the board members are not the ones doing the job.
    “I don’t think the constitution of the board will change much except the incoming board members have the will power. NNPC’s problem goes beyond board. The corporation needs re-engineering in the sense that it should get things done right, block the loopholes through which funds are siphoned. Constituting the board is one thing, bringing in credible people is another thing because many people are on the wings waiting to grab their own ‘national cake.’
    “The calibre of members of the incoming board will be critical to whatever the NNPC will become in future. To me, the appointment of new board members shouldn’t be based on political patronage. But, if political patronage is inevitable, the membership should be a mix of technocrats who understand the oil industry and politicians.
    “The management team should work hard to entrench good governance in the Corporation. Let the board strengthen and reinforce the management, even it entails bringing on board those who will create the change. The NNPC needs to be repositioned to be able to take risks as other national oil companies. It should invest in the country and outside the shores of the land. It shouldn’t remain as a government tool, or be compelled to operate under the stranglehold of government.
    “It’s the government that is holding the NNPC down from taking such risks. The corporation should be encouraged to invest in Africa and other countries of the world and go beyond lifting and selling crude.”
    An analyst and Lead Director, Centre for Social Justice (CSJ), Eze Onyepkere said: “We expect transparency in the NNPC because there is so much money there but with little supervision. The NNPC structure doesn’t allow for some level of transparency.

    GRAPPLING with dwindling oil prices at the international market and festering attacks on pipeline facilities in the Niger Delta by militants, President Muhammadu Buhari on Monday made wide-ranging changes to the leadership of the Nigerian National Petroleum Corporation (NNPC).

    He relieved Dr. Emmanuel Ibe Kachikwu as the Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC) after 11 months in office. Kachikwu, who was named as NNPC chief executive on August 5, last year, yielded the position to Dr Maikanti Kacalla Baru on Monday. His removal by the President was in line with the provision in Section 1(2) of the Nigerian National Petroleum Corporation Act of 1997, as amended.

    No doubt, Kackikwu’s nearly one year as the helmsman was eventful. To some workers on the NNPC payroll, t was a period of uncertainty and an era of one-man show. Not a few saw him as a man on a strange mission and who did not care about due process and team work. But to the oil and gas operators, he was a God-sent messiah to redeem the petroleum industry.

    A NNPC worker told The Nation on the condition of anonymity that members of staff were happy over Kachikwu’s removal.

    Said the official: “He was on a strange mission; his reorganisation agenda was not coordinated. He does one thing today and changes it tomorrow. He didn’t apply the rules. He disregarded the management of the Corporation in decision making, brought in new people to head high positions leaving top NNPC staff that grew through the career path.

    “His removal will cut some excesses, especially running the NNPC as a one-man management show. He doesn’t carry along the management.

    “With the coming on board of Baru and the new board members, all sides of an issue would be looked at, due process properly taken before decisions are taken.

    “With Baru, we think normalcy has returned to the Corporation, he will calm the situation to ensure a level certainty in the company and assurance for the staff.

    “You ought to know that some of the reforms he carried out and some he intended to carry are not workable and many of the staff didn’t believe in them.”

    Expectations were high among those who spoke to The Nation that the new helmsman would reverse some of the restructuring programmes carried out by Kachikwu. Will this happen? Only time will tell.

    Under Kachikwu as the NNPC GMD, the board was largely unheard of and inactive. It is however believed that Baru will continue the NNPC reform and transformation as initiated by Kachikwu.

    “Government is a continuum. The era of business as usual is gone for good. It may not be hook, line and sinker but the reform process would not be jettisoned”, a Kachikwu loyalist told The Nation.

    Corporation’s spokesman Mallam Garba-Deen Mohammed told The Nation that it too early to ask what the new group managing director will do.

    He said: “Let’s wait for the handover. The new Group Managing Director will unfold his agenda for the Corporation and the oil and gas industry after the public holidays, and that will be made public.”

    To the Managing Partner of Lonadek Oil and Gas Consultants, Dr. Lola Amao, the new board constituted for NNPC is disappointing, saying the constitution lacks balance.

    She said: “The new board as constituted is very disappointing. A well constituted board should have diversity from professional to gender. For professionals (engineers, lawyers, economists and finance experts, among others) they have done well. However, the board does not have enough geographical/regional representation and gender diversity. The board is also skewed upward in age.

    “The talent composition of the previously dissolved board comprising of former group executive directors (GEDs) of NNPC has been lost. They could have added more value as the transition from Strategic Business Units to incorporated joint ventures (IJV’s) requires historical knowledge base and an understanding of the intent behind the letter.

    “Those that have the ‘out of the box thinking capacity’ that will follow up strategically on the unbundling of NNPC into IJVs to actualise the repositioning of the Corporation to a competitive national oil company like its contemporaries – Statoil, Qatar Petroleum, Kuwait Oil, among others, are required.

    “I do not see a good representation of the interests of marginal field owners. In terms of real-time online e-savvy and out-of-the-box creative strategists, the newly constituted board needs help.

    “Therefore, the newly constituted board falls short of global standards for Board constitution. The mix requires at least three more members, of which two should be women, to have a better balance.”

    Kachikwu’s right and wrong doings

    What made Kachikwu to receive total acceptance on assumption of office as the NNPC chief was the allegations of huge corruption and mismanagement of public funds by the Corporation.

    As the national oil company, NNPC represents government’s interests in the operation and regulation of the petroleum industry. By law, the NNPC manages the joint venture between the Federal Government and some foreign multinational corporations including Shell, Agip, ExxonMobil, Chevron, and Total and recently some indigenous firms.

    But due to the aforementioned allegations, NNPC lost grip of its supervisory role and degenerated into a rent-collector for the government with less attention to transparency and accountability.

    Some of the corruption allegations showed that between 2007 and 2009, auditors found that the corporation over-deducted funds in subsidy claims to the tune of N28.5 billion.

    In 2008, Willbros Group Inc of United States (U.S.) admitted making ‘suspicious’ payments of over $6.3 million to officials of the corporation and its subsidiary – the National Petroleum Investment Management Services (NAPIMS) for assistance in obtaining and retaining contracts at the Eastern Gas Gathering System (EGGS).

    Also in 2004, ABB Vetco Gray, a U.S. company and its UK subsidiary – ABB Vetco Gray UK Limited – admitted paying over $1 million in bribes to NAPIMS’ officials,  in exchange for obtaining confidential bid information and favourable recommendations from government agencies.

    After the publication of a report in November 2013 by Swiss, a non-governmental advocacy organisation – Erklärung von Bern – allegations of fraud surfaced, placing the NNPC under suspicion of siphoning $6.8 billion crude oil revenues.

    The NNPC has been battling with the allegation of non-remittance of $20 billion into the Federation Account since 2013. These allegations, among others, have been responsible for calls for the sanitisation and repositioning of the corporation.

    So, when Kachikwu came on board, following the dissolution of the former board comprising Dr. Joseph T. Dawha (GMD),  Group Executive Directors (GEDs) Mr. Bernard O.N. Otti (Finance & Accounts), Dr. Dan Efebo (Corporate Services), Ikechukwu Oguine (Coordinator, Legal Services/Secretary to the Corporation), Alhaji Abdullahi Bukar (member), Mr. Danladi Wadzani (member), Prof. Olusegun Okunnu (member), Mr. Danladi Kifasi (member) and Mr. Steven Oronsaye (member), it was considered timely having built very successful career in ExxonMobil, a world-renowned multinational firm.

    Kachikwu unbundled the NNPC into five strategic business units from nine. The new units are: Upstream, Downstream, Gas & Power, Finance & Services and Corporate Services. The former GMD noted that it was in line with the Federal Government’s aspiration to transform the Corporation into a lean, efficient, business-focused, transparent and accountable national oil company in keeping with international best practices.

    He appointed as GEDs Dr. Maikanti Baru (Exploration & Production); Mr. Isiaka Abdulrazaq (Finance & Services); Dennis Nnamdi Ajulu (Refining & Technology) and Dr. Babatunde Victor Adeniran (Commercial & Investment.

    He also appointed a new Company Secretary/Legal Adviser and Managing Directors including Chidi Momah, Group General Manager, Company Secretary & Legal Adviser; Mrs. Esther Nnamdi Ogbue, Managing Director, Pipelines and Products Marketing Company (PPMC); Chinedu Ezeribe, Managing Director, Warri Refining & Petrochemicals Company (WRPC); Mr. Babatunde Bakare, Managing Director, Nigerian Gas Company (NGC); Mr. Inuwa Ibrahim Waya, Managing Director, Hyson; Mr. Abubakar Mai-Bornu, Managing Director, Nigerian Petroleum Development Company (NPDC); and Mr. Ladipo Fagbola, Managing Director, NNPC Retail, Mr. Rowland Ewubare, Managing Director, Integrated Data Services Limited (IDSL); Mr. Modupe Bammeke, Managing Director, NNPC Properties; Mr. Abdulkadir Saidu, Managing Director, Duke Oil; and Mr. Dafe Sejebor, Group General Manager, NAPIMS.

    He retired 38 top management staff and reduced the number from 122 to 83. He also recruited 12 personnel from the private sector into the top management cadre to jump-start a new business outlook geared towards enhancing the operational environment as a profit-driven business.

    Many of the measures did not go down well with the management of the NNPC.

     

     

     

  • Nigeria to end fuel importation in 2019, says Kachikwu

    Nigeria to end fuel importation in 2019, says Kachikwu

    Minister of State for Petreleum Resources Dr Ibe Kachikwu yesterday said Nigeria would end fuel importation by 2019.

    He said it requires $50billion dollars to fill the infrastructural gap in the industry and get it functioning optimally.

    He said by 2019, Nigeria expects to become a net exporter of refined products, adding that an investment drive is ongoing to meet the infrastructure requirement.

    Kachukwu was a guest speaker at the 10th Annual Business Law Conference of the Nigerian Bar Association Section on Business Law (NBA-SBL) in Abuja, with the theme: Law reform and economic development.

    Speaking on the sub-theme: Future prospects for the oil and gas industry, the minister said the refineries are currently working at about 40-50 per cent capacity.

    He said the aim is to get them working at 90 per cent capacity or more and build the needed infrastructure as investors come in.

    On why refineries are working at low capacity, he said: “How does a refineries work if the pipelines supplying them are out most of the year and so they can’t supply crude? You can’t refine an empty space.

    “How does it work when you don’t do your turnaround maintenance or if when monies are budgeted for them they are diverted? How does it work if your contracting process is so long that you never meet the turnaround days you’re supposed to? How does it work when you send the wrong set of people with the wrong set of skills to what should have been very important portfolios in the establishment?” he said.

    The minister said engagements with militants in the Niger Delta has been successful, resulting in a ceaseful and rise in crude production.

    He said he visited the creeks and met with the local chiefs with a view to finding a short, medium and long term solution to the crisis.

    Kachukwu praised President Muhammadu Buhari for not employing force in solving the problem, adding that when he visited the creeks, the militants “never fired a gun” while he was there.

    The minister said oil production has picked up as the Niger Delta crisis is being resolved.

    According to him, 1.89million barrels was produced as at Wednesday. He said he expects it to hit 2.3million barrels by next month.

  • Kachikwu: Govt ‘ll save N1.4t yearly from subsidy removal

    Kachikwu: Govt ‘ll save N1.4t yearly from subsidy removal

    •’NNPC’s monthly losses drop to N3b’ 

    The Federal Government will save over N1.4 trillion yearly from the removal of oil subsidy, Minister of State for Petroleum Resources Dr. Ibe Kachikwu,has said.

    He spoke when he visited the headquarters of the Nigerian Content Development and Monitoring Board (NCDMB) in Yenagoa, the Bayelsa State capital.

    Kachikwu said the deregulation policy had reawakened the downstream sector and would help the nation become a net exporter of petroleum products in a few years.

    “We have a lot of people interested in investing in our refineries and building more refineries and we will remain committed to the goal which is to reduce importation of petroleum products by 60 per cent by the end of 2018 and become a net exporter of petroleum products by 2019,” he said.

    He described NCDMB as a critical agency in the petroleum industry and expressed delight that the Board had the right personnel to deliver on its mandate. He recalled the Board’s lofty achievements in the last six years of existence, noting that every Nigerian appreciated the good work that it has achieved. He further pledged to provide the right support and encouragement for the Board to deliver on its targets.

    With the fall in crude oil prices and reduced investment in the sector, the Minister charged the NCDMB to restrategise and transit from its role of just propagating local content and local participation to one of finding commonality with industry stakeholders to encourage investment.

    The new focus of the Board, he said, “affects how quickly you process things, it affects the rigidity of some of the terms you ask for as people enter into transactions and the need for increased collaborative relationships”.

    Kachikwu also stated that the corporate restructuring initiated in the Nigerian National Petroleum Corporation (NNPC) has reduced the average monthly loss recorded by the corporation from N40billion in the recent past to N3billion while efforts remained on target to achieve profitability before the end of the year, a feat that had not been recorded in 20 years. He said the achievements were being recorded by staff of the NNPC who had previously given up hope in the system.

    Responding to comments from staff of the NCDMB, the Minister hailed the contributions of various trade unions in the oil and gas industry to the introduction of the deregulation policy, stressing that “the success of the policy was only possible because of the unity that was provided by PENGASSAN, NUPENG, NARTO and every active participant in the oil sector. My role was to be the professor, explaining why we had to do it.”

    He also announced plans to carry out infrastructural re-graphing of Nigeria’s petroleum sector, adding that plans were afoot to review Nigeria’s aging pipelines, depots and gas infrastructure and begin the process of replacing them.

    With regards to gas flaring, the Minister stated that the new thinking was to move away from a penalty based gas regulation which had largely failed over the years to a zero tolerance gas flaring regulation with year 2020 as the new target deadline.

    Admitting that the entire spectrum of petroleum industry required strategic intervention, Kachikwu harped on the need to see the challenges as opportunities to transform the sub sectors into income earners for the populace. According to him, “anywhere you look, you see that the oil and gas sector is populated by a need. We have to translate those needs to economic models that are beneficial to the citizenry. The drop in oil price should motivate us into going into parallel income streams.”

  • Avengers: Lawmaker cautions Kachikwu on dialogue with governors

    A Bayelsa State lawmaker, Israel Sunny-Goli, has urged the Minister of State for Petroleum, Dr. Ibe Kachukwu, to be cautious in his consultations with Niger Delta governors in a bid to end attacks on oil and gas facilities by members of the Niger Delta Avengers (NDA).

    Sunny-Goli, who is the only All Progressives Congress (APC) member in the Bayelsa State House of Assembly, noted that to have an enduring peace in the region, political stakeholders must be included in the dialogue.

    The lawmaker said it would be unproductive to engage only the region’s governors, who are mainly members of the Peoples Democratic Party (PDP) in the dialogue, while excluding APC leaders in the discussions.

    Acknowledging that security matters should not politicised, Sunny-Goli, who represents Brass Constituency I, said the new militant group had been partisan in its demands.

    The lawmaker said the destruction of the pipelines and other oil installations in the region was a ploy by a particular party to win pipeline surveillance contracts for its members to enable them have enough funds to prosecute future elections.

    He warned that Kachukwu would aggravate the problems, if he excluded APC leaders in the current negotiation.

    Sunny-Goli said: “Kachikwu could find himself aggravating the problem, unless he proceeds with the utmost caution. He must make a conscious effort to carry all critical stakeholders and leaders of the people along in the attempt to secure the pipelines through surveillance, using the communities and locals.

    “The surveillance strategy is commendable and it is in line with what we have always advised for the security of the oil pipelines. But we have discovered that the approach being pursued by the minister and the Niger Delta governors may be programmed to exclude the APC family in the region.

    “While security should not be politicised, it is important to make the process inclusive and create a sense of joint ownership among critical stakeholders.

    “In the particular case of the current pipeline surveillance effort in the Niger Delta, it is important to actively involve leaders of the people, like Chief Timipre Sylva, Bayelsa State APC leader; Rt. Hon. Chibuike Amaechi, who is the Minister of Transport, Chief Umana Umana of Akwa Ibom State, among others.

    “Such deliberate inclusiveness is particularly necessary, considering the bizarrely partisan colours of the present-day militants’ demands.”

  • Niger Delta talk will include fishermen, others – Kachukwu

    The Federal Government on Tuesday said the ongoing peace talk in the Niger Delta region would involve all stakeholders including fishermen and community representatives.

    The Minister of State for Petroleum Resources, Dr. Ibe Kachukwu and the Coordinator, Presidential Amnesty Programme, Gen. Paul Boro (rtd), said all stakeholders would participate in the dialogue.

    A statement signed by Mr. Daniel Iworiso-Markson, the Chief Press Secretary to the Bayelsa State Governor, Mr. Seriake Dickson, said the two presidential aides spoke in Yenagoa when they paid a courtesy visit to the governor.

    The duo assured the people of the region that the ongoing efforts aimed at addressing insecurity were intended to achieve enduring peace and stability in the region.

    Kachikwu said the federal government was committed to “a financially-driven and economically-motivated pattern” of resolving security concerns and development in Bayelsa and the entire region.

    He appealed to the Niger Delta agitators to embrace dialogue for the common good of all stakeholders, saying oil as a God-given resource was endowed in the region to unify the people of the country.

    Boroh was also quoted as describing the peace initiative as all-encompassing, saying it was designed to engage all stakeholders including fishermen in the creeks.

  • Fed Govt okays $7b investment in Akwa Ibom, says Kachikwu

    Fed Govt okays $7b investment in Akwa Ibom, says Kachikwu

    •Ministers meet stakeholders at town hall meeting

    The Minister of State for Petroleum Resources, Dr Ibe Kachikwu, yesterday said the Federal Government has approved an investment portfolio of over $7 billion in the Petroleum sector in Akwa Ibom State.

    The minister noted that the approval followed what he called the relative peace the state enjoyed.

    He said: “Let me say that some of the biggest investments coming in the Petroleum sector are in fact coming to Akwa Ibom State. Right now, we are finalising the Independent Power Project (IPP) with Mobil, which will produce 500 megawatt (MW) of power.

    “A major investment is also coming, working with the Nigerian National Petroleum Corporation (NNPC) to develop some facilities, including an ethanol plant. The total value of this investment is over $7 billion. It has been approved by the President. There are major investments coming your way as a result of the peace we enjoy here.”

    The Minister of Transport, Mr. Rotimi Amaechi, urged the Minister of Niger Delta, Usani Uguru, to ensure the completion of the East-West Road for the development of Niger Delta.

    The minister reiterated the commitment of President Muhammadu Buhari to the development of Niger Delta through the award of contract for the development of railway from Lagos-Calabar.

    He said: “I met on my table a contract awarded for $12 billion and it was not implemented. That contract was called the Lagos-Calabar railway. The Federal Government has agreed to do the Lagos-Calabar and Lagos-Kano railways.”

    On the development of Maritime Academy of Nigeria at Oron, Amaechi said the policy of the Federal Government was to upgrade the institution to an international standard.

    On the establishment of Maritime University in Okerenkoko in Warri South Local Government Area of Delta State, Amaechi said he was not against the establishment of the institution but the Ministry of Transport did not have money to fund for the project.

    He said: “What I am saying is that government does not have funds for it now. The Ministry of Transport does not have money to fund a new university in Okerenkoko. Other ministries can fund it but not Ministry of Transport.”

    The Minister of Niger Delta, Usani Uguru, noted that sections 4 and 5 of the East-West Road had not been abandoned because of diversion.

    He said: “Section 4 of the East-West Road, which passes through Eket, is not abandoned. We are working on it. Let nobody be deceived by the delay as a result of the diversion. It doesn’t mean abandonment. “Also the section 5, Oron to Calabar, this delay is worth more than starting what you cannot finish. If this contract was awarded in 2013, why has it not started until now?”

    Condemning the rowdiness caused by some youths during the town hall meeting, Uguru said: “We have all seen what goes on in the town hall meetings in other regions; none has been so shameful. It is unfortunate. In the midst of that, we begin to complain about how much resources have not got to the region.

    “Why don’t you allow me apply the little we have and have a reason to complain to get more?

    “But in this circumstance, who would you convince to come and put more into it? All we keep crying to insinuate is regional discrepancies on the basis of political alignment. Have we forgotten that in the 17 years of democratic rule, people of the South took 14 years? If you see nothing wrong in the lack of development of the South, why would you see something wrong in the peace and advancement of that region? It is shameful to portray us as people who are not sensible.”