By Bassey Udo
Delays in taking vital decisions in the oil and gas industry are fuelling concerns about Nigeria’s prospect of meeting her targets of increased daily oil production capacity and enhanced national reserve by 2020.
Industry operators blame the Minister of Petroleum, Diezani Alison-Madueke, for an increasingly lethargic style that has slowed major decisions and processes – from board meetings to licence renewals – failings that now threaten the government’s projected expansion of production frontiers and more revenues.
One operator particularly accused Mrs. Alison-Madueke of “micro-managing the entire industry as her personal estate using her personal aides to carry out key policies, rather than designated officials.”
The Federal Government wants to raise daily oil production from the current average of 2.15 million barrels per day, BPD, to four million barrels, and reserves from about 35 billion barrels to 40 billion.
In July, the Governor of the Central Bank of Nigeria [CBN], Godwin Emefiele, said at the end of the Monetary Policy Committee that oil industry performance improved marginally from -9.36 per cent in the 4th quarter of 2013 to -6.60 per cent in the first quarter of 2014.
Overall, the CBN Economic Report for April 2014 showed slow growth, with oil production increasing from 1.86 million barrels per day or 52.08 million barrels per month in February, to 1.90 million barrels per day, or 57 million barrels in April.
But, the marginal growth has failed to suppress mounting concerns among key operators about the consistent failure of the industry to meet its growth projections in virtually all areas of operation.
Most industry operators, particularly major oil companies, who spoke with our reporter on condition of anonymity for fear of victimization, blamed the industry’s woes and its poor turnover on Mrs. Alison-Madueke’s increasingly sluggish style.
The operators criticized the minister’s management style, and one operator particularly blamed her for “micro-managing the entire industry as her personal estate using her personal aides to carry out key policies, rather than designated officials.”
At the NNPC, where she is the Chairman of its Board, a top official, who would not want his name mention to avoid being victimized, accused the Minister of side-lining the management in most important decisions, preferring to use her “powerful aides”.
According to the official, until recently, one Eric Ufo, one of the Minister’s many Personal Assistants/Special Advisers, was charged with the responsibility of interfacing with key industry players. After Mr. Ufo, the Minister appointed Kevin Alonzo and Kelvin Okpere as replacements, with wider powers.
“These assistants are so powerful that whenever they invoke the name of the Minister, industry players cower in fear,” a senior member of the Nigerian Association of Petroleum Explorationists, NAPE, told our reporter. “They have become the middlemen between the Minister and the industry on all issues, including crude oil lifting.”
Consequently, the muddling of the chain of command and the abuse of approval processes through the use of personal aides over key officials has left the industry replete with scores of delayed approvals awaiting the Minister’s attention.
“While the Minister wants to see every memo, she is always never there to see it,” said the NNPC official, who also lamented the inability of the Board of the Company to meet regularly.
The NNPC Act 1977 demands that the Board meets not less than four times each year. But that schedule is hardly met as meetings are often deferred.
How such delays extend to other policy timelines played out in the government’s plan to open up new oil production areas, called acreages.
The minister had in November 2013 announced plans by the Federal Government to hold the second marginal field licensing round to allocate existing marginal oil acreages to new operators. After several postponements, the exercise was rescheduled for March 2014.
While the minister announced that the DPR would publish bid guidelines, no such action has been taken till date.