NIGERIA is gradually becoming a sorry case due to the level of corruption and mind-blowing graft in the system. This is a country where the corrupt and those termed to be ‘fantastically corrupt’ according to David Cameron are so powerful that they can take on the government. The oil and gas sector is one of those sectors that harbors a good number of powerful Nigerians who seem to be bigger than the state. Sane and patriotic Nigerians should not be sad if some of our compatriots are now referring to our dear country as a Banana Republic.
One of God’s given resources to this country is crude oil. It exists in the bowel of our soil in large quantities, enough to give all Nigerians meaningful lives if well managed. But the greed of a few has turned the rest into paupers and Almajiris. While we messed up our oil and gas sector in Nigeria, it is the same oil and gas that has turned Saudi Arabia into one of the richest countries on earth. Their oil and gas company – Aramco, is worth $664.780 billion. In 2022 alone, the company declared a profit of $161 billion. Our own NNPC reported an income of N2.5 trillion, about $2.8 billion in the same 2022. That was achieved due to reforms carried out around the country’s oil fortunes after decades of losses.
From its control centre in Dharan, Saudi Arabia, Aramco monitors in real time, what is going on in its crude oil facilities across the country. They know the amount of crude being extracted, those loading and where each truck is headed. If there is any accident or stoppage in any of its stations, it is detected from the control centre and remedial action taken immediately.
But here, it is rocket science to our operators, not because we do not have the technology or the know-how, but because we are more interested in what enters the pockets of the fat cats working in that sector.
As a member of the Organization of Oil Exporting Countries (OPEC), we were given a quota of 1.74 million bpd for 2023, but due to the fact that we could not meet up, it was reduced to 1.38 million barrels per day. And why couldn’t we meet up with our OPEC quota? We could not meet up not because the crude oil under our grounds is drying up, but because the big boys are illegally stealing and selling our crude on international waters. Sad!
Nigeria is the only country on earth that is an oil producing nation but has to rely solely on importing refined petroleum products for local needs. Yet, we have four refineries that the big boys sabotage so that they can continue to import petrol at exorbitant prices from foreign lands. Do not be surprised if you later discover that some of those refineries in other tiny African countries are owned by Nigerians.
As the ‘Giant of Africa’, we also do not know the amount of refined petroleum products we consume daily. The figure is so high that more than 50 per cent of our fuel finds its way to our neigbouring countries. They will collect subsidy for selling the product at cheaper rate to Nigerians but those trucks would find their ways to Benin Republic, Ghana and Cameroon.
As far back as 2017, the Nigeria Extractive Industries Transparency Initiative (NEITI) reported that Nigeria lost over $723 million (about N221.5 billion, at N306.3 to $1) through the Offshore Processing Arrangement, (OPA) adopted by the Federal Government in 2015 to supply refined petroleum products in the country. The controversial arrangement was introduced by the Nigerian National Petroleum Corporation (NNPC) under the supervision of the then Minister of Petroleum Resources, Diezani Alison-Madueke, and was quite popular during the Goodluck Jonathan administration. It was an arrangement that involved the allocation of Nigeria’s crude oil to select indigenous and foreign oil traders under agreed swap contract terms, in exchange for refined products for local consumption. Considered an alternative arrangement for the country’s four dysfunctional refineries in Port Harcourt, Warri and Kaduna, the OPA was criticised by Nigerians as a channel for corruption and waste of the country’s crude oil resources.
Apart from the difficulty in getting commensurate value of petroleum products for the volume of crude oil allocated for refining, the arrangement was identified as one of the ways corrupt government officials funnelled the country’s crude oil abroad for their selfish benefits. The Buhari administration in November 2015, jettisoned the OPA for being “uneconomical and wasteful”. Nobody was prosecuted nor was a kobo recovered. Today, Alison-Madueke has turned fugitive, running from the laws of the land, while several of her property are now listed for auction after several court judgments in that regard.
With the four refineries comatose, we were told that it is not the business of government to own businesses but that it should only provide enabling environment for the private sector to thrive.
Africa’s richest man, Alhaji Aliko Dangote saw an opportunity in the oil and gas sector and decided to established a refinery in the country. He approached a former Governor in Ogun State for land for the project but our greedy Governor was more interested in what would enter his pocket. Dangote took his proposal to Lagos State and was allocated hectares of land in the Lekki-Epe axis of the state. His refinery has the capacity to refine 650,000 litres of fuel per day, more than enough to meet our local needs. The federal government also keyed into the project with a promise to own 20 per cent equity.
Everything was done to ensure that the refinery became a reality until it was time to get crude oil for the same refinery. Now, we are being told that Nigeria does not have enough crude oil to sell to Dangote refinery. Yet, 400,000 litre of crude oil is always set aside for local consumption.
In June, Devakumar Edwin, Vice President, Oil and Gas at Dangote Industries Limited (DIL), accused international oil companies (IOCs) in Nigeria of doing everything to frustrate the survival of Dangote Oil Refinery and Petrochemicals.
Edwin said that the IOCs are deliberately frustrating the refinery’s efforts to buy local crude by jerking up crude oil prices above the market price, thereby forcing it to import crude from countries as far as the United States, with its attendant huge costs. Hear him lament: “The Federal Government issued 25 licences to build refinery and we are the only one that delivered on promise. In effect, we deserve every support from the Government. We are calling on the Federal Government and regulators to give us the necessary support in order to create jobs and prosperity for the nation. While the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) are trying their best to allocate the crude for us, the IOCs are deliberately and willfully frustrating our efforts to buy the local crude. It would be recalled that the NUPRC recently met with crude oil producers as well as refinery owners in Nigeria in a bid to ensure full adherence to Domestic Crude Oil Supply Obligations (DCSO), as enunciated under section 109(2) of the Petroleum Industry Act (PIA)’’.
Just last week, Dangote himself came out to say that Federal Government equity in the refinery has reduced to 7.2 per cent as series of obstacles have been put in place to ensure the failure of the refinery. He also lamented that if he knew that the refinery would face such daunting obstacles, he would not have dabbled into it.
And to confirm that there is a grand design to frustrate Dangote and his refinery out of business, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has said that the 650,000 bpd Dangote refinery is still at the pre-commissioning stage and has not yet been licensed. NMDPRA Chief Executive, Engr. Farouk Ahmed, said that the allegations raised by the refinery that its operations are being scuttled owing to a lack of supply of crude oil by International Oil Companies (IOCs) are untrue. “Well, just like you rightly asked, there are lots of concerns about the supply of petroleum products nationwide and the claims by some media houses that we were trying to scuttle the Dangote refinery; that is not so.
“Dangote refinery is still in the pre-commissioning stage. It has not been licenced yet. I think they are at about 45 per cent completion. So, we cannot rely heavily on one refinery to feed the nation because Dangote is requesting that we should suspend or stop all importation of petroleum products, especially automotive gas oil (AGO) or jet kero and direct all marketers to the refinery”, Engr. Ahmed said.
Is Engr. Ahmed aware that former President Muhammadu Buhari left his cosy Aso Rock office on May 22 last year to commission the Dangote Refinery? Is he indicting the former President for commissioning a project that was at 45 per cent stage of completion? From his utterances, it is quite clear why many private sector companies are leaving the country for good. There are several obstacles mitigating genuine manufacturing from doing business in Nigeria. While many manufacturing companies are haemorrhaging due to high electricity tariff, corruption in both high and low places has forced many out of business. Dangote has resorted to buying crude oil from far countries such as Brazil and United States of America. Could this be in a bid to ensure that he does not sell petrol to Nigerians at reasonable cost?
Just last week, marketers said that the landing cost of petrol has risen to N1,117 per litre and many of their members have been forced to adjust their pump price beyond the N610 fixed by the NNPC Limited. Petrol now cost between N640 and N800 depending on where you are buying the product but even at that, its shows that someone somewhere is picking the differentials. What is going on the oil and gas sector in Nigeria is akin to what one could termed ‘the more you look, the less you see’. In fact, it is enough to make one frustrated and depressed to see what Nigeria has become in the comity of other civilised and well-run nations.
See you next week.
– Akintunde is the Publisher and Editor-in-Chief of Glittersonline newspaper. His syndicated column, Monday Discourse, appears on News Point Nigeria newspaper on Mondays.
