Ribadu's choice to head the Presidential Task force on
Petroleum Revenue was controversial as some members of the civil society felt
an unpopular President was trying to win popular support on the credibility of
the well-respected former anti-corruption fighter. Ribadu has lived up to his profile with the controversy his report has
generated, first with the way to report was leaked to the media ahead of its
release and the open disagreement among his committee members on Friday when the report
was submitted to the President.
President Goodluck Jonathan.
The leakage of the Ribadu report was actually what forced
President Goodluck Jonathan to personally request that the Ribadu committee
report and two other committees that have had their report ready but have been unable
to submit to the Minister of Petroleum Resources who set up the committees, hand in their reports to him personally.
The three different committees besides The Ribadu Special Task
Force on Petroleum Revenue are the Dotun Sulaiman Committee on good governance
and global best practices in the NNPC and the Kalu Idika Kalu committee on the
nation’s refineries.
The report of the three committees have been hanging in the
Minister’s office for several months
after the committees finished their reports without any clear idea of when they
will be able to submit to her officially.
The Minister was apparently reluctant to receive the
reports of the three different committees set up to probe and make
recommendations on various aspects of the Nigerian petroleum industry.
But the leakage of the Ribadu Task Force report to the media
triggered the President into damage control mode forcing him to accept the
report of the committees which high level intrigues were in process to
undermine their recommendations.
Diezani Allison Madueke, Nigeria's Minister of Petroleum Resources
The expectation is that the recommendations of the
committees if implemented by the President will significantly change the
current power structure in the oil and gas industry forcing out entrenched
interests that have fed fat on the current anomalies in the sector. It is these
entrenched interests in the Ministry and the Nigerian National Petroleum
Corporation (NNPC) that are doing everything in their powers to ensure that the
committees report do not see the light of the day or are discredited.
Though the current uncertainty in the oil and gas sector is
holding back billions of dollars of new investments, entrenched interests in
the sector are basically not bothered since the uncertainty favours their continuous rape of the sector.
The current
challenges in the sector revolve mainly around the desire of the Petroleum
Minister and top executives of the NNPC to remain the power brokers in the
sector despite clear signals that the best way to go for the oil sector is less
of government interference, proper regulation of the oil sector and a clear
business plan for running the Nigerian National Petroleum Corporation (NNPC)
and its various subsidiaries.
The power play has not only stalled the outcome of the various committees
set up by the President and Minister in response to last January’s protest and
call of the reform of the Nigerian oil sector but also the Petroleum Industry Bill
(PIB) currently before the National Assembly may have fallen victim of these
intrigues. The current PIB before the National Assembly is not the same as that
prepared by the Udo Udoma committee set up by the President to draft PIB,
sources familiar with the original recommendations of the committee say. The
final report got to the national assembly without the knowledge of the
committee, sources say.
Critical recommendations of the committee, like a more
independent Department of Petroleum Resources (DPR), which would have seen the
emergence of a strong autonomous regulatory body for the oil industry was
watered down resulting in the recommendation of two weak regulatory bodies, one
for upstream and another for the downstream and stronger control by the
Minister of Petroleum Resources in the draft bill before the National Assembly.
“The boards of the two regulatory bodies have just been
reduced to that of budget proposal and implementation. They have no real
powers” said an oil industry source.
Also recommendations that removed most of the discretionary powers
of the Minister in the Oil and Gas sector were ignored for more discretionary
powers by the Minister. The implication
is the PIB which would have seen the emergence of a more business oriented NNPC
has not materialized in the current PIB.
The second committee, the Kalu Idika Kalu committee has also seen the
Minister acting contrary to its recommendations concerning the refineries. The
committee had recommended that the way forward was for the nation’s refineries
to be sold and that if any Turnaround Maintenance (TAM) were to be done at all
before the sale, it should not cost more than $500 million, sources say. The
Minister of Petroleum Resources has however moved to repair the refineries at a
cost of $1.6 billion well above the committee’s recommendation. It is also
understood that the Minister may have delayed receiving the report of the
committee.
Sources also say the Ribadu Committee was leaked to the
media after several efforts to officially present the report to the Minister
failed. Even after the report was leaked in the media, the Minister came out
questioning sections of the report stating that the government is still
studying the report.
A look through the Ribadu report however shows that the NNPC
and the Ministry were actively contacted throughout the process of preparing
the reports and their reaction to all the issues raised incorporated into the
report.
A third committee, the Dotun Sulaiman Committee charged with
designing a new corporate governance codes for ensuring full transparency, good
governance and global best practices in the NNPC and other oil industry
agencies was completed months ago but
the committee was unable to officially present it to the Minister. The
committee’s recommendation will essentially see a more independent NNPC with
less control from the Minister’s office; say sources that have seen a copy of
the report.
A common thread running through the reports of all the
committees’ set up to probe the power
sector is the needed for transparency and less government interference in the
sector, say sources that have seen the reports. This will significantly reduce
the influence of the Minister and ensure a more properly regulated oil
industry.
“What we envisaged with the current reform in the oil industry
is a more independent regulatory role for the DPR like the National
Communication Commission (NCC) in the Telecoms sector and the Nigeria
Electricity Regulation Commission (NERC) in the electricity sector.
Unfortunately, that is not what we are getting” a second source in the oil
industry said.
The challenge with the current oil industry reforms is that
NNPC and the Ministry has been left to lead the reforms. It is like asking the
Power Holding Company of Nigeria (PHCN) to lead the reforms in the electricity
sector or asking NITEL to lead the reforms of the telecommunications sector.
They would have just used the process to entrench themselves in the sector
rather than pursuing meaningful reforms that will lead to growth of the sector.
That is what the NNPC is doing, said an operator in the oil industry.
